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Transport - The movement of goods and people from one destination to another for a variety of personal and business purposes

Extracts from this document...

Introduction

TRANSPORT * The movement of goods and people from one destination to another for a variety of personal and business purposes * Measured in tonne/passenger kilometres or number of journeys. * Derived Demand = not demanded for its own sake but for the need to transfer goods or passengers - dependent on the demand for these * Can't be stored or transferred * Affected by peak & off-peak demand (daily & seasonal) * Supply/capital is indivisible - public transport can be at full capacity into an urban area at peak time, but empty on return journey = over supply at off-peak times. * Continuously changing (passengers & freight) * Generates negative externalities * Accounts for 15% of GNP Demand influenced by- * Own price (buying and running) * Price and quality of substitutes * Price of complements * Output * Income (transport in general & particular mode of transport chosen) - travel expenditure increases with income, yet bus & coach fare expenditure decreases with income (inferior goods). * Journey requirements (e.g. employment & personal needs) * Leisure time (increasing = more holidays & further afield) * Changing urban structure (e.g. places of entertainment built out-of-town) * Personal preferences Forecasting Demand for Future Traffic * difficult process as it depends on how the variables affecting demand change over time, & economic growth. * essential for the government who has to decide on the allocation of funds for future development. * important in assessing whether the benefits from an improvement, over its life-time, justify the initial cost - enable a balance to be struck between providing extra capacity before it is needed & the cost of adding to capacity at a later stage. * to predict the environmental impacts of traffic 1952 - 27% of passenger km travelled were by car, taxi, van, & 60% public transport (bus & rail) 2000 - 86% of passenger km travel by car, taxi, van; & only 12% public transport Car Transport Dominates passenger transport (86%) ...read more.

Middle

Profits are driven down & this could lead to operators reducing their costs, affecting safety standards. Quantity Licensing - to ensure existing capacity was fully utilized. Cross-subsidization of bus services - off-peak journeys are socially worthwhile but unprofitable, but supported by profits made at peak times. - only possible as long as operators have monopolies (less likely with a deregulated bus industry). Ownership Railways, parts of road haulage & bus sector are under public ownership as it would be easier for the government rather than private companies to subsidise & co-ordinate them. Contestable markets Privatise & deregulate transport markets Increased competition = decrease in price No supernormal profits Must be efficient to keep franchise e.g. only one train company may operate a route but the market can be made contestable by selling it a short-term franchise which will only be renewed if the service it provides is of a better quality and lower price than that which could be offered by other companies. e.g. bus service - if profits rise on a particular route bus companies operating on other routes may switch some of their fleet to the profitable route. Consumers may reap double benefits from contestable markets. They may be able to benefit from the lower costs which a sole firm can gain because of economies of scale while also benefiting from the absence of supernormal profits because of the possibility of entry of competitors into the market. Mergers may reduce the number of potential competitors, restrictive practices may occur & consumers may not benefit if there are significant negative externalities. Sustainable Transport Policy * Meets the current needs of people & firms without threatening the environment & the ability to meet the transport needs of future generations. * Takes into account social costs & benefits (wants to make the social costs of transport equal to private costs) * Discourages the use of the car & promotes other environmentally friendly modes of transport * Co-ordinated with a range of other policies, including health, education, environment & land use planning. ...read more.

Conclusion

Inefficient - leads to higher costs & fares in some areas, yet lower costs in other area, though not passed onto passengers through lower fares. VED is an annual charge that has to be paid by all vehicles using the public highway. Historically it has been set at a flat rate for private cars & at a variable rate for commercial vehicles, depending on their weight. A more sustainable outcome would be to vary the rate of VED depending on the vehicle's engine. Mode Comparison Passengers Freight Mode Advantages Disadvantages Advantages Disadvantages Rail � Fast � Work while travel � Carry a lot of people � Environmentally acceptable � Expensive � Delays � Not door to door � Frequency � Direct � Large capacity � Fast � Additional method needed Private car � Flexible & convenient � Comfort � Door to door � Cheaper than trains � Congestion � Pollution � Fuel prices � Safety Possibly van � Convenient � Door to door � Not much room to carry large amounts � Not environmentally friendly Public bus � Cheap on average cost � Bus lanes � No parking � Not always reliable & comfortable � Congestion � Not necessarily direct � Connection � � Inland waterways � No congestion � Cheap � Environmentally friendly � No tax � SLOW � Large loads � Lower production costs � Cheap � Not a network of canals � SLOW � Additional modes needed Air � Long distances fast � Comfort � Carry reasonable amount � Opportunity cost � Expensive � Limited airports � Time delays � Congestion � Not environmentally friendly � Quick - good for perishables � Expensive � Can't carry huge load � Additional transport needed Sea � Large people carrying � Relatively cheap � Environmentally friendly � Slow � Weather � Large quantity � Fairly cheap � Extra cost via port � Slow 1 ...read more.

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