Transportation is the movement of freight or passengers, by land (rail or road), air, or water. Though important to trade throughout history, since the Industrial Revolution, transportation concerns have become crucial to the operation of any business, whether the company ships its own goods or simply depends on transportation to receive its raw materials and inventory. Transport strikes and fluctuations in fuel prices have had a serious impact on local and national economies at various times in the last century and a half.
In the 21st century, human-powered and animal powered transport have become essentially irrelevant from a business standpoint, though in some parts of the world they remain in use for special circumstances. The majority of the time, they both constitute recreational transport, such as the picturesque horse drawn carriage tours offered in many touristed cities.
The modes of commercial transportation, then, are aviation, rail and road overland transport, and ship transport.
For purposes of transport, aviation relies primarily on fixed-wing aircraft, though because of their vertical takeoffs and landings, rotorcraft (helicopters) are sometimes used for private passenger transport to destinations that can’t accommodate an airplane landing strip; the primary examples are military transport, and private helicopters used by businesses for rooftop landings.
The benefit of air transport is the speed, which is unequaled by anything else available to the general public. On the other hand, aircraft and aircraft fuel are expensive, and they depart from fixed locations; transport is still required to and from the airstrip, and costs are high. Passenger transport costs are kept down by sharing vehicles—booking many passengers on the same flight between two airports, often with stops in between, a system that is in a sense inefficient for any flight that isn’t to or from a “hub” (an airport where most of the airline’s flights originate). This spreads the cost of the flight out among so many parties that the additional cost of such inefficiency and the inconvenience of lengthy layovers or odd departure and arrival times is outweighed by the overall savings. For passenger transport, commercial aviation is at its most efficient and cost-effective when the distance is at its greatest. A flight between neighboring cities will often save little time and less money relative to ground transport, because of delays and check-in time, especially with the security concerns of the 21st century.
In Europe, the 1990s deregulation of European Union airspace has had a significant impact on commercial airlines. More and more national airlines, like British Airways and Ireland’s Aer Lingus, have privatized, while suffering in competition with deregulation era budget airlines that focus on short flights at low prices. In the United States, deregulation came much earlier, in 1978; the United States has led the world in air travel in number of flights ever since, despite a series of challenges to the industry, including bankruptcy (of the pre-1978 airlines still in operation, only American Airlines has never declared bankruptcy), “air rage” and other passenger problems, the hijackings of the late 1970s and early 1980s, post-9/11 fear of flying, customer dissatisfaction over more stringent security precautions, and unstable fuel prices.
In addition to using measures such as overbooking and reducing the size of seats in order to fit more passengers on a flight, one solution to the financial travails of travel has been the rise of low-cost airlines. In that niche, Southwest Airlines has prospered, but Skybus and AirTran Airways have ceased operations, while the nonunion discount airline JetBlue—one of the few airlines to increase its profits after 9/11—has faced a series of scandals, lawsuits, and unfavorable headlines.
The air travel industry depends heavily on government assistance. In fact, once government subsidies are factored in, the entire industry has been operating at a loss over the whole of its history, despite steady growth. Business polymath Warren Buffett has called the airline industry one of the hardest to make money in—despite the vast amount of money accumulated, little of it is profit. Government funds are used to build airports to foster economic development, and to subsidize the development of aircraft for both military and commercial purposes. Government grant money is often used in the research and development of aircraft design. This level of government involvement is sometimes less obvious in the United States, where there is a long history of privately owned airlines, than in Europe, where until recently most airlines were nationalized.
Rail And Road Transportation
Rail transport relies on railroads, and, along with steam-powered water transport, was the hallmark of the Industrial Revolution. The use of rails (which minimize friction, compared to driving surfaces, and distribute weight more efficiently than other overland travel) and engine-driven trains allowed for much faster overland transport than before, and in particular allowed for a great deal more freight to be carried, rather than loading up covered wagons pulled by horses and other draft animals. Train travel is slower than air travel and suffers from the same indirectness with regard to target destinations; travel to and from the train station is required, and it is less popular than it once was for passenger transport. But freight trains continue to operate day and night around the world, and passenger transport remains popular in Asia, Europe, and to some degree in the northeastern United States, where distances between cities are relatively short. The diesel-electric locomotive succeeded the steam engine in the 1930s and 1940s and remains in use throughout most of the world.
Passenger rail travel is frequently brought up when the issue of public transportation reform is on the table. Often the discussion includes monorails and magnetic levitation (maglev) trains, the second of which can potentially move extremely fast because of the lack of friction, and which are cheap to operate once built, but which require expensive new infrastructure.
Road transportation is the most popular form of transportation, with hundreds of millions of automobiles worldwide and a well-established trucking industry in most industrialized nations. The building of roads has a long history, and along with aqueducts constituted the principal infrastructure built by civilizations like Rome. Because of the vast numbers of roads and the presumption that nearly every domicile and business is accessible by road, road travel offers the greatest flexibility—door-to-door travel. Nearly all freight transport involves transport by road on at least one leg of the journey.
Sea transport is the slowest form, but because of the extraordinary tonnage that can be transported over the seas, it remains an efficient mode of freight transport for nonperishable goods, especially those which are delivered at regular intervals and for which thus the length of travel is essentially irrelevant. Water transport is generally cheaper than air transport over comparable distances, though air transport has the obvious advantage of being able to depart from landlocked locations.
Intermodal transport is simply a transport route involving multiple modes. Most passenger travel is either exclusively road travel or intermodal, for the simple reason that road travel is necessary to reach the airport, train station, or harbor. This may be provided by shuttle buses, by taxis, by the passenger’s own vehicle, or by public transportation.
Intermodal freight transport is extremely common. Containerization is a popular system of intermodal freight transport, using ISO (International Organization for Standardization) containers that can be transported by plane, ship, truck, or train without opening the container and handling the freight. The use of containerization has greatly increased the efficiency of ports and of freight handling at airports and train stations. Roughly similar boxes were in use from the early days of railroads in order to make it easier to shift freight from train cars to other forms of transport, and for reasons of practicality various railroads began using containers that were more and more alike.
When the first railroads standardized their containers in the 1920s, others soon followed, and American military transport needs further encouraged standardization throughout the 1940s and 1950s.
The first purpose-built container ships, designed expressly to transport freight in standardized containers, launched in the 1950s. Intermodal freight transport took advantage of standardized containers at the same time, using trains, ships, and trucks to ship freight in the Yukon and Alaska. The deregulation of American transportation industries in the 1970s and 1980s made containerization more practical; prior to deregulation, special permissions were needed if a single transport vehicle carried multiple types of freight, an impediment to many of the benefits of containerization.
In the 21st century, 90 percent of nonbulk cargo travels by standardized container, on ships carrying thousands of shipping containers in five standard sizes, most of them roughly the size of rental storage units or small apartments. Special trucks and train cars have been designed to accommodate standard containers with a minimum of wasted space. Containerization has revolutionized freight security: knowing what is in the containers requires a level of knowledge that the casual criminal simply doesn’t have, usually requiring illicit cooperation with someone directly involved with the transport.
A branch of civil engineering, transport economics analyzes the distribution of resources in transportation systems. It is crucial for transportation providers to understand the supply and demand in their field, the effects of competition, and potential externalities—in no small part because the costs of infrastructure are so high, and it can be time-consuming and expensive to adjust to circumstances that haven’t been properly planned for. Transport economics examines not only the business applications of transportation, but urban planning issues such as traffic congestion, road space, and the impact and costs of public transportation.
- Edward Bardi, John Coyle, and Robert Novack, Management of Transportation (Thomson SouthWestern, 2006);
- Maxwell Lay, Ways of the World: A History of the World’s Roads and of the Vehicles That Used Them (Rutgers, 1992);
- Paul Roberts, The End of Oil: On the Edge of a Perilous New World (Houghton Mifflin, 2004);
- Kenneth Small and Erik T. Verhoef, The Economics of Urban Transportation (Routledge, 2007);
- Daniel Yergin, The Prize: The Epic Quest for Oil, Money, and Power (Free Press, 1993)
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