4 Transportation modes
Transportation modes are an essential component of transport systems since they are the means by which mobility is supported. Geographers consider a wide range of modes that may be grouped into three broad categories based on the medium they exploit: land, water and air. Each mode has its own requirements and features, and is adapted to serve the speciﬁc demands of freight and passenger trafﬁc. This gives rise to marked differences in the ways the modes are deployed and utilized in different parts of the world. Recently, there is a trend towards integrating the modes through intermodality and linking the modes ever more closely into production and distribution activities. At the same time, however, passenger and freight activity is becoming increasingly separated across most modes.
Concept 1 – A diversity of modes
Transport modes are the means by which people and freight achieve mobility. They fall into one of three basic types, depending on what surface they travel over: land (road, rail and pipelines), water (shipping), and air. Each mode is characterized by a set of technical, operational and commercial characteristics (see Figure 4.1).
This has become the dominant land transport system today. Automobiles, buses and trucks require a road bed. Such infrastructures are moderately expensive to provide, but there is
1 Barge Equivalency
15 barges on tow
100 car train unit
Figure 4.1 Performance comparison for selected freight modes
a wide divergence of costs, from a gravel road to a multi-lane urban expressway. Because vehicles have the means to climb moderate slopes, physical obstacles are less important than for some other land modes. Most roads are provided as a public good by governments, while the vast majority of vehicles are owned privately. The capital costs, therefore, are shared, and do not fall as heavily on one source as is the case for other modes.
All road transport modes have limited abilities to achieve scale economies. This is due to the size constraints imposed by governments and also by the technical and economic limits of the power sources. In most jurisdictions, trucks and buses have speciﬁc weight and length restrictions which are imposed for safety reasons. In addition, there are serious limits on the traction capacities of cars, buses and trucks because of the considerable increases in energy consumption that accompany increases in the weight of the unit. For these reasons the carrying capacities of individual road vehicles are limited.
Road transport, however, possesses signiﬁcant advantages over other modes. The capital cost of vehicles is relatively small. This produces several key characteristics of road transport. Low vehicle costs make it comparatively easy for new users to gain entry, which helps ensure that the trucking industry, for example, is highly competitive. Low capital costs also ensure that innovations and new technologies can diffuse quickly through the industry. Another advantage of road transport is the high relative speed of vehicles, the major constraint being government-imposed speed limits. One of its most important attributes is the ﬂexibility of route choice, once a network of roads is provided. Road transport has the unique opportunity of providing door-to-door service for both passengers and freight. These multiple advantages have made cars and trucks the modes of choice for a great number of trip purposes, and have led to the market dominance of cars and trucks for short-distance trips.
The success of cars and trucks has given rise to a number of serious problems. Road congestion has become a feature of most urban areas around the world (see Chapters 7 and 10). In addition, the mode is behind many of the major environmental externalities linked to transportation (see Chapter 8). Addressing these issues is becoming an important policy challenge at all levels of jurisdiction, from the local to the global (see Chapter 9).
Railways require tracks along which the locomotives and rail cars move. The initial capital costs are high because the construction of rail tracks and the provision of rolling stock are expensive. Historically, the investments have been made by the same source (either governments or the private sector). These expenditures have to be made before any revenues are realized and thus represent important entry barriers that tend to limit the number of operators. It also serves to delay innovation, compared with road transport, since rail rolling stock has a service life of at least twenty years.
Railway routing is affected by topography because locomotives have limited capacities to mount gradients. As a result, railways either avoid important natural barriers or overcome them by expensive engineering solutions. An important feature of rail systems is the width of the rails. The standard gauge of 1.4351 meters has been adopted in many parts of the world, across North America and most of Western Europe for example. But other gauges have been adopted in other areas. This makes integration of rail services very difﬁcult, since both freight and passengers are required to change from one railway system to the other. As attempts are being made to extend rail services across continents and regions, this is an important obstacle, as for example between France and Spain, Eastern and Western Europe, and between Russia and China. The
potential of the Eurasian land bridge is limited in part by these gauge differences. Other factors that inhibit the movement of trains between different countries include signaling and electriﬁcation standards. These are particular problems for the European Union where the lack of “interoperability” of the rail systems between the member states is a factor limiting the wider use of the rail mode.
The ability of trains to haul large quantities of goods and signiﬁcant numbers of people over long distances is the mode’s primary asset. Once the cars have been assembled or the passengers have boarded, trains can offer a high speed – high capacity service. It was this feature that led to the train’s pre-eminence in opening the interior of the continents in the nineteenth century, and is still its major asset. Passenger service is effective where population densities are high. Freight trafﬁc is dominated by bulk cargo shipments, agricultural and industrial raw materials in particular. Rail transport is a “green” system, in that its consumption of energy per unit load per km is lower than road modes.
Although sometimes identiﬁed as a mode that enjoyed its heyday during the nineteenth century, rail transport is enjoying a resurgence because of technological advances in the latter part of the twentieth century. In passenger transport this has come about through signiﬁcant breakthroughs in speed. For instance, in Europe and Japan high-speed rail systems reach speeds up to 515 km/hr. This gives rail a competitive advantage over road transport and even with air transport over short and medium distances (see Figure 4.2). Japan saw the ﬁrst comprehensive development of a high-speed train system, notably used along the Tokyo–Osaka corridor in 1964. By the 1990s, the usage of the system had peaked, in part because of competition from air transport. Europe has been the region where the adoption of the high-speed train has been the most signiﬁcant since the
1990s. Close to a half of all the world’s high-speed passengers-km are now occurring in Europe. South Korea is the latest country to build a high-speed rail system along the Seoul–Pusan corridor, which was inaugurated in 2004.
Unit trains, where trains are made up of wagons carrying one commodity-type only, allow scale economies and efﬁciencies in bulk shipments, and double stacking has greatly promoted the advantages of rail for container shipments. Rail transport is also enjoying a resurgence as a mode for commuters in many large cities.
Pipelines are an extremely important and extensive mode of land transport, although very rarely appreciated or recognized by the general public, mainly because they are
Figure 4.2 Development of high-speed train trafﬁc, Europe and Japan, 1965–2000
buried underground (or under the sea as in the case of gas pipelines from North Africa to Europe). In the USA, for example, there are 409,000 miles of pipelines that carry 17 percent of all ton/miles of freight. The longest oil pipeline is the TransSiberian, extending over 9,344 km to Western Europe from the Russian arctic oilﬁelds in eastern Siberia. Two main products dominate pipeline trafﬁc: oil and gas, although locally pipelines are signiﬁcant for the transport of water, and in some rare cases for the shipment of dry bulk commodities, such as coal in the form of slurry.
Pipelines are almost everywhere designed for a speciﬁc purpose only, to carry one commodity from one location to another. They are built largely with private capital and because the system has to be in place before any revenues are generated, represent a signiﬁcant capital commitment. They are effective in transporting large quantities of products where no other feasible means of transport (usually water) is available. Pipeline routes tend to link isolated areas of production with major centers of reﬁning and manufacture in the case of oil, or major populated areas, as in the case of natural gas.
The routing of pipelines is largely indifferent to terrain, although environmental concerns frequently delay approval for construction. In sensitive areas, particularly in arctic/sub-arctic areas where the pipes cannot be buried because of permafrost, the impacts on migratory wildlife may be severe, and be sufﬁcient to deny approval, as was the case of the proposed McKenzie Valley pipeline in Canada in the 1970s. The
1,300 km long Trans Alaskan pipeline was built under difﬁcult conditions and is above the ground for most of its path. Geo-political factors play a very important role in the routing of pipelines that cross international boundaries. Pipelines from the Middle East to the Mediterranean have been routed to avoid Israel, and new pipelines linking Central Asia with the Mediterranean are being routed in response to the ethnic and religious mosaic of the republics in the Caucasus.
Pipeline construction costs vary according to the diameter of the pipe and increase proportionally with the distance and with the viscosity of the ﬂuid (need for pumping stations). Operating costs are very low, however, and as mentioned above, pipelines represent a very important mode for the transport of liquid and gaseous products. One major disadvantage of pipelines is the inherent inﬂexibility of the mode. Once built (usually at great expense), expansion of demand is not easily adjusted to. There exist speciﬁc limits to the carrying capacity. Conversely, a lessening of supply or demand will produce a lowering of revenues that may affect the viability of the system. A further limit arises out of geographical shifts in production or consumption, in which a pipeline having been built from one location to another may not be able to easily adjust to changes. For example, the reﬁneries in Montreal, Canada, were served by a pipeline from Portland, Maine in order to receive shipments year-round because of ice on the St. Lawrence River. In the 1980s a pipeline from western Canada was built to provide domestic crude oil at a time when the price of the international supply was escalating. Since then the Portland pipeline has been lying idle.
Shipping exploits the water routes that cross oceans as well as rivers and lakes. Many of the oceanic routes are in international waters and are provided at no cost to the users. In many coastal and inland waters too shipping lanes are “free”, although national regulations may exclude foreign vessels from cabotage trade. Physical barriers represent a particular problem for shipping in two areas. First are the sections of inland waterways where water depths and/or rapids preclude navigation. The second is where land barriers separate seas. In both cases canals can provide access for shipping, but they may be
tolled. An example of the ﬁrst type is the St. Lawrence Seaway, while the Suez and Panama canals are examples of the latter. Thus, except for canals, shipping enjoys rights of way that are at no cost to the users. Complementing this advantage are the relatively low operating costs of ships. Ships have the ability to carry large volumes with small energy consumption and limited manpower requirements. Shipping, therefore, is a mode that can offer very low rates compared with other modes.
Even if maritime transportation has experienced remarkable improvements in safety and reliability, maritime routes are still hindered by dominant winds, currents and general weather patterns. The North Atlantic and the North Paciﬁc (50 to 60 degrees north) are subject to heavy wave activity during the winter that sometimes impairs navigation, and may cause ships to follow routes at lower latitudes, thereby increasing the route lengths (see Figure 4.3). During the summer monsoon season (April to October), navigation may become more hazardous on the Indian Ocean and the South China Sea.
Rivers may not be useful for commercial navigation if their orientations do not correspond to the directions of transport demand. Thus, many of the major rivers of Russia ﬂow north–south, while the main trade and passenger ﬂows are east–west. Shallow draught and extensive obstacles, such as rapids, may also limit navigation. However, many rivers, such as the Rhine or the Chang Jiang, are signiﬁcant arteries for water transport because they provide access from the oceans to inland markets (see Figure 4.3).
Shipping has traditionally faced two drawbacks. It is slow, with speeds at sea averaging 15 knots (26 km/h). Secondly, delays are encountered in ports where loading and unloading takes place. The latter may involve several days of handling. These drawbacks are particularly constraining where goods have to be moved over short distances or where shippers require rapid service deliveries. There are four broad types of ships employed around the world.
• Passenger vessels can be further divided into two categories: passenger ferries, where people are carried across relatively short bodies of water in a shuttle-type
service, and cruise ships, where passengers are taken on vacation trips of various durations, usually over several days. The former tend to be smaller and faster vessels, the latter are usually very large capacity ships.
• Bulk carriers are ships designed to carry speciﬁc commodities, and are differentiated
into liquid bulk and dry bulk vessels. They include the largest vessels aﬂoat. The
largest tankers, the Ultra Large Crude Carriers (ULCC) are up to 500,000 deadweight
St. Lawrence / Great Lakes
Rhine / Ruhr / Danube
Yangtze Chang Jiang Perl
Figure 4.3 Domains of maritime transport
tons (dwt), with the more typical size being between 250,000 and 350,000 dwt; the largest dry bulk carriers are around 350,000 dwt, while the more typical size is between 100,000 and 150,000 dwt.
• General cargo ships are vessels designed to carry non-bulk cargoes. The traditional
ships were less than 10,000 dwt, because of extremely slow loading and off-loading.
More recently these vessels have been replaced by container ships that because they can be loaded more efﬁciently are becoming much larger, with 80,000 dwt being the largest today.
• Roll on – roll off (RORO) vessels, which are designed to allow cars, trucks and
trains to be loaded directly on board. Originally appearing as ferries, these vessels
are used on deep-sea trades and are much larger than the typical ferry. The largest are the car carriers that transport vehicles from assembly plants to the main markets.
The distinctions in vessel types are further differentiated by the kinds of services on which they are deployed. Bulk ships tend to operate either on a regular schedule between two ports or on voyage basis. In the latter case the ship may haul cargoes between different ports based on demand. General cargo vessels operate on liner services, in which the vessels are employed on a regular scheduled service between ﬁxed ports of call, or as tramp ships, where the vessels have no schedule and move between ports based on cargo availability.
An important feature of the economics of shipping is the capital costs. Because of their size, ships represent a signiﬁcant capital outlay. Cruise ships represent the most expensive class of vessels, with the Queen Mary 2 costing $800 million, but even container ships represent initial capital outlays of $75 million. The annual cost of servicing the purchase of these vessels represents the largest single item of operating expenditures, typically accounting for over half of the annual operating costs. Container shipping requires the deployment of many vessels to maintain a regular service (14 ships in the case of a typical Far East – Europe service), which is a severe constraint on the entry of new players. On the other hand, older second-hand vessels may be purchased for much smaller amounts, and sometimes the purchase price can be easily covered by a few successful voyages. In some regards, therefore, the shipping industry is quite open and historically has provided opportunities for entrepreneurs to accumulate large fortunes. Many of the largest ﬂeets are in private hands, owned by individuals or by family groups.
The shipping industry has a very international character. This is reﬂected particularly in terms of ownership and ﬂagging. The ownership of ships is very broad. While a ship may be owned by a Greek family or a US corporation, it may be ﬂagged under another nationality. Flags of convenience are means by which ship owners can obtain lower registration fees, lower operating costs and fewer restrictions.
The share of open registry ships operated under a ﬂag of convenience grew substantially after World War II. They accounted for 5 percent of world shipping tonnage in 1950, 25 percent in 1980, and 45 percent in 1995. The usage of a ﬂag of convenience refers to a national owner choosing to register one or more vessels in another nation in order to avoid higher regulatory and manning costs. This enables three types of advantages for the ship owners:
• Regulation. Under maritime law, the owner is bound to the rules and regulations of the country of registration, which also involves requisitions in situation of emergency
(war, humanitarian crisis, etc.). Being subject to less stringent regulations commonly confers considerable savings in operating costs.
• Registry costs. The state offering a ﬂag of convenience is compensated according to the ship’s tonnage. Registry costs are on average between 30 and 50 percent lower
than those of North America and Western Europe.
• Operating costs. Operating costs for open registry ships are from 12 to 27 percent
lower than for traditional registry ﬂeets. Most of the savings come from lower
manning expenses. Flags of convenience have much lower standards in terms of salary and beneﬁts.
The countries with the largest registered ﬂeets offer ﬂags of convenience (Panama, Liberia, Greece, Malta, Cyprus and the Bahamas) and have very lax regulations (see Figure 4.4). Ship registry is a source of additional income for these governments. Even the landlocked country of Mongolia offers ship registry services.
An important historic feature of oceanic liner transport is the operation of conferences. These are formal agreements between companies engaged on particular trading routes. They ﬁx the rates charged by the individual lines, operating for example between Northern Europe and the East Coast of North America, or eastbound between Northern Asia and the West Coast of North America. Over the years in excess of 100 such conference arrangements have been established. While they may be seen as anti-competitive, the conference system has always escaped prosecution from national anti-trust agencies. This is because they are seen as a mechanism to stabilize rates in an industry that is inherently unstable, with signiﬁcant variations in supply of ship capacity and market demand. By ﬁxing rates, exporters are given protection from swings in prices, and are guaranteed a regular level of service provision (Brooks, 2000). Firms compete on the basis of service provision rather than price. A new form of inter-ﬁrm organization has emerged in the container shipping industry since the mid-1990s. Because the costs of providing ship capacity to more and more markets are escalating beyond the means of many carriers, many of the largest shipping lines have come together by forming strategic alliances with erstwhile competitors. They offer joint services by pooling vessels on the main commercial routes. In this way they are each able to commit fewer ships to a particular service route, and deploy the extra ships on other routes that are maintained outside the alliance. The alliance services are marketed separately, but operationally involve close cooperation in selecting ports of call and in establishing schedules. The alliance structure has led to signiﬁcant developments in route alignments and economies of scale of container shipping (Slack, 2004).
Hong Kong Norway (NIS) Singapore
Cyprus Malta Bahamas
Dry Bulk Container Other
0 20,000 40,000 60,000 80,000 100,000 120,000 140,000 160,000 180,000 200,000
Figure 4.4 Tonnage by country of registry, 2003
Air transport, compared with other modes, has the obvious advantage of speed. This feature has served to offset many of its limitations, among which operating costs, fuel consumption and limited carrying capacities are the most signiﬁcant. Technology has worked to overcome some of the constraints, most notably the growth of capacity, in which aircraft will soon be capable of transporting 500 passengers or 100 tons of freight. Technology has also signiﬁcantly extended the range of aircraft, so that while 40 years ago aircraft were just beginning to be capable of crossing the Atlantic without stopping at intermediate places such as Newfoundland, they are now capable of making trips of up to 18 hours duration. Surprisingly, the speed of commercial aircraft has not progressed since the 1960s, when the prospect of supersonic speed was being anticipated with the development of the Anglo-French Concorde, which was removed from service in 2003. Figure 4.5 shows the ranges of three major categories of jet planes:
• Regional. The airbus A320, with a range of 3,700 km, was designed to service destina- tions within a continent. From New York, most of North America can be reached.
This range can be applied to the European continent, South America, East Asia and Africa. This type of aircraft is also used for high demand regional services needing several ﬂights a day, enabling to improve the quality of service.
• International. The Boeing 777-100, with a range of 7,400 km, can link one continent
to another. From New York, it is possible to reach Western Europe and most of South
• Intercontinental. The Boeing 747-400, with a range of 11,400 km, can reach from
New York any destination around the world except Australia, South and Southeast
Asia. Japan is within range.
Air transport makes use of air space that theoretically gives it great freedom of route choice. While the mode is less restricted than land transport to speciﬁc rights of way, it is nevertheless much more constrained than might be supposed. In part this is due to physical conditions, in which aircraft seek to exploit (or avoid) upper atmospheric
Figure 4.5 Range from New York of different modern commercial jet planes
winds, in particular the jet stream, to enhance speed and reduce fuel consumption. In addition, speciﬁc corridors have been established in order to facilitate navigation and safety. Strategic and political factors also inﬂuence route choice. For example, the ﬂights of South African Airways were not allowed to over-ﬂy many African nations during the apartheid period, and Cubana Airlines has been routinely prohibited from over-ﬂying the USA.
Like maritime transport, the airline industry is highly capital intensive. For instance, a new Boeing 747-400, used for high-volume and long-distance travel, costs approximately $200 million, depending on the conﬁguration, and a new Boeing 737-800, used for regional ﬂights, costs about $60 million. However, unlike the maritime sector, air transportation is labor intensive, with limited room to lower labor requirements, although many airlines are now trying to reduce labor costs by cutting salaries and beneﬁts. The industry has become a powerful factor of development, generating globally more than $700 billion in added value and creating more than 21 million jobs.
The initial development of air transportation took place in the 1920s and 1930s, not always for commercial reasons (Graham, 1995). It was seen as a means of providing a national air mail service (US) and of establishing long-haul air services to colonies and dependencies (UK and France). Airline companies were set up to provide these national goals, a trend that continued in the post-colonial period of the 1950s to the 1970s, as many African, Asian and Caribbean nations created their own airline companies while reserving them for speciﬁc markets and for speciﬁc routes. By convention, an air space exclusively belongs to the country under it, and this has led to signiﬁcant government control over the industry.
Traditionally, an airline needs the approval of the governments of the various countries involved before it can ﬂy in or out of a country, or even across another country without landing. Prior to World War II, this did not present too many difﬁculties since the range of commercial planes was limited and air transport networks were in their infancy and nationally oriented. In 1944, an International Convention was held in Chicago to establish the framework for all future bilateral and multilateral agreements for the use of international air spaces. Five freedom rights were designed, but a multilateral agreement went only as far as the ﬁrst two freedoms (right to over-ﬂy and right to make a technical stop).
Freedoms are not automatically granted to an airline as a right, they are privileges that have to be negotiated. All other freedoms have to be negotiated by bilateral agreements, such as the 1946 agreement between the United States and the UK, which permitted limited “ﬁfth freedom” rights. The 1944 Convention has been extended since then, and as shown in Figure 4.6 there are currently nine different freedoms:
• First Freedom. The right to ﬂy from a home country over another country (A) en- route to another (B) without landing. Also called the transit freedom.
• Second Freedom. The right for a ﬂight from a home country to land in another country
(A) for purposes other than carrying passengers, such as refueling, maintenance or
emergencies. The ﬁnal destination is country B.
• Third Freedom. The right to carry passengers from a home country to another
country (A) for purpose of commercial services.
• Fourth Freedom. The right to ﬂy from another country (A) to a home country for
purpose of commercial services.
The Third and Fourth Freedoms are the basis for direct commercial services, providing the rights to load and unload passengers, mail and freight in another country.
Figure 4.6 Air freedom rights
• Fifth Freedom. This freedom enables airlines to carry passengers from a home country to another intermediate country (A), and then ﬂy on to a third country (B)
with the right to pick up passengers in the intermediate country. Also referred to as “beyond right”. This freedom is divided into two categories: Intermediate Fifth Freedom Type is the right to carry from the third country to the second country. Beyond Fifth Freedom Type is the right to carry from the second country to the third country.
• Sixth Freedom. Not formally part of the original 1944 convention, it refers to the
right to carry passengers between two countries (A and B) through an airport in
the home country. With the hubbing function of most air transport networks, this freedom has become more common, notably in Europe (London, Amsterdam).
• Seventh Freedom. Covers the right to operate a passenger service between two
countries (A and B) outside the home country.
• Eighth Freedom. Also referred to as “cabotage” privileges. It involves the right to
move passengers on a route from a home country to a destination country (A) that
uses more than one stop along which passengers may be loaded and unloaded.
• Ninth Freedom. Also referred to as “full cabotage” or “open-skies” privileges. It
involves the right of a home country to move passengers within another country
In the 1970s, the perspective changed and air transport was increasingly seen as just another transport service. Market forces were considered to be the mechanism for ﬁxing prices and it became widely accepted that airline companies should be given freedom within national markets to decide the nature and extent of their services, while the role of governments should be limited to operational and safety regulations. In the United States, the Air Deregulation Act of 1978 put an end to ﬁxed markets and opened the
industry to competition. This liberalization process has spread to many other countries, although with important local distinctions. Many of the former private ﬁrms in the USA and many former state-owned airlines elsewhere that were heavily protected and subsidized, went bankrupt or have been absorbed by larger ones. Many new carriers have emerged, with several low-cost carriers such as Ryan Air and South-West Air, having achieved industry leadership. Internationally, air transport is still dominated by bi-lateral agreements between nations (Graham, 1995).
As in the case of ocean shipping, there has been a signiﬁcant development of alliances in the international airline industry. The alliances are voluntary agreements to enhance the competitive positions of the partners. Members beneﬁt from greater scale economies, a lowering of transaction costs and a sharing of risks, while remaining commercially independent. The ﬁrst major alliance was established in 1989 between KLM and North West Airlines. The “Star” alliance was initiated in 1993 between Lufthansa and United Airlines. In 1996, British Airlines and American Airlines formed the “One World” alliance. Other national carriers have joined different alliance groupings. They cooperate on scheduling, code sharing, equipment maintenance and schedule integration. It permits airlines that may be constrained by bi-lateral regulations to offer a global coverage (Agusdinata and de Klein, 2002).
Prior to deregulation movements (end of 1970s–early 1980s), many airline services were taking place on a point-to-point basis. Figure 4.7 shows two airline companies servicing a network of major cities. A fair amount of direct connections exists, but mainly at the expense of the frequency of services and high costs (if not subsidized). Also, many cities are serviced, although differently, by the two airlines and connections are likely to be inconvenient. With deregulation, a system of hub-and-spoke networks emerges as airlines rationalize the efﬁciency of their services. A common consequence is that each airline assumes dominance over a hub and services are modiﬁed so the two hubs are connected to several spokes. Both airlines tend to compete for ﬂights between their hubs and may do so for speciﬁc spokes, if demand warrants it. However, as this network matures, it becomes increasingly difﬁcult to compete at hubs as well as at spokes, mainly because of economies of agglomeration. As an airline assumes
Figure 4.7 Airline deregulation and hub-and-spoke networks
dominance of a hub, it reaches oligopolistic (if not monopolistic) control and may increase airfares for speciﬁc segments. The advantage of such a system for airlines is the achievement of a regional market dominance and higher plane loads, while passengers beneﬁt from better connectivity (although delays for connections and changing planes are more frequent) and lower costs.
Air transport is extremely important for both passenger and freight trafﬁc. In 2000, 1.4 billion passengers traveled by air transport, representing the equivalent of 23 percent of the global population. Passenger trafﬁc is made up of business travelers and the general public, many of whom are holiday-makers. Air transport is a very signiﬁcant factor in the growth of international tourism. Figure 4.8 indicates the continued domination of US carriers in passenger transport.
In 2000, 30 million tons of freight was transported, a ﬁgure that represents one third of the value of all international trade. This freight trafﬁc is made up of electronics, parcels and parts with a high value-to-weight ratio that are at the heart of contemporary just-in-time and of ﬂexible production systems. Freight is carried in the belly-hold of passenger airplanes, and provides supplementary income for airline companies. However, with the growth of the freight trafﬁc an increasing share is being accounted for by all-cargo planes and specialized air freight carriers, either as independent companies or as separate ventures by conventional passenger carriers (see Figure 4.9).
A general analysis of transport modes reveals that they each possess key operational and commercial advantages and properties. Modes can compete or complement each other in terms of cost, speed, reliability, frequency, safety, comfort, etc. Cost is one of the most important considerations in the choice of mode. Because each mode has its own price/performance proﬁle, the actual competition between the modes depends primarily upon the distance traveled, the quantities that have to be shipped and the value of the goods. Thus, while maritime transport might offer the lowest variable costs, over short distances and for small bundles of goods, road transport tends to be most competitive. A critical factor is the terminal cost structure for each mode, where the costs (and delays) of loading and unloading the unit impose ﬁxed costs that are incurred independent of
Air France All Nippon Airways Continental Airlines Lufthansa
US Airways Northwest Airlines United Airlines American Airlines
Delta Air Lines
0 20,000 40,000 60,000 80,000 100,000 120,000
Figure 4.8 World’s 10 largest passenger airlines, 2000 (in 1,000 passengers) (Source: IATA, World
Air Transport Statistics)
Air France British Airways Northwest Airlines Cathay Pacific Singapore Airlines Japan Airlines Lufthansa
Korean Air Lines
United Parcel Service
0 1,000 2,000 3,000 4,000 5,000
Figure 4.9 World’s 10 largest freight airlines, 2000 (in 1,000 tonnes)
the distance traveled (see Chapter 5). As shown in Figure 4.10, different transportation modes have different cost functions. Road, rail and maritime transport have respectively C1, C2, and C3 cost functions. While road has a lower cost function for short distances, its cost function climbs faster than rail and maritime cost functions. At a distance D1, it becomes more proﬁtable to use railway transport than road transport while from a distance D2, maritime transport becomes more advantageous. Point D1 is generally located between 500 and 750 km of the point of departure while D2 is near 1,500 km.
With increasing levels of income the propensity for people to travel rises. At the same time, international trade in manufactured goods and parts has increased. These trends in travel demand act differentially upon the modes. The modes that offer faster and more reliable services gain over modes that offer a lower cost, but slower, alternative. For passenger services, rail has difﬁculty in meeting the competition of road transport over short distances and aircraft for longer trips. For freight, rail and shipping have suffered from competition from road and air modes for high value shipments. While shipping, pipelines and rail still perform well for bulkier shipments, intense competition over the last thirty years has seen road and air modes capture an important market share of the high revenue-generating goods. Figure 4.11 shows the modal split in one major market region, where trucks dominate, particularly in terms of value of shipments.
Ro a d
Ra il Ma ritime
Figure 4.10 Distance, modal choice and transport cost
6.9 5 4.5
Truck Rail Pipeline Air Water Other and unknown
Figure 4.11 Modal shares of US–NAFTA-partner merchandise trade, 2000
There are important geographical variations in modal competition. The availability of transport infrastructures and networks varies enormously. Some regions possess many different modes that in combination provide a range of transport services that ensure an efﬁcient commercial environment. In many parts of the world, however, there are only limited services, and some important modes may be absent altogether. This limits the choices for people and shippers, and acts to limit accessibility. People and freight are forced to use the only available modes that may not be the most economic for the nature of the demand. Goods may not be able to ﬁnd a market, and people’s mobility may be impaired.
For these reasons, transport provision is seen as a major factor in economic development (see Chapter 3). Areas with limited modal choices tend to be among the least developed. The developed world, on the other hand, possesses a wide range of modes that can provide services to meet the needs of society and the economy.
Concept 2 – Intermodal transportation
The nature of intermodalism
Competition between the modes has tended to produce a transport system that is segmented and un-integrated. Each mode has sought to exploit its own advantages in terms of cost, service, reliability and safety. Carriers try to retain business by maximizing the line- haul under their control. All the modes saw the other modes as competitors, and were viewed with suspicion and mistrust. The lack of integration between the modes was also accentuated by public policy that has frequently barred companies from owning ﬁrms in other modes (as in the United States before deregulation), or has placed a mode under direct state monopoly control (as in Europe). Modalism was also favored because of the difﬁculties of transferring goods from one mode to another, thereby incurring additional terminal costs and delays.
The use of several modes of transport has frequently occurred as goods are shipped from the producer to the consumer. When several modes are used this is referred to as multimodal transport. Within the last forty years efforts have been made to integrate separate transport systems through intermodalism. What distinguishes intermodal from multimodal transport is that the former involves the use of at least two different
modes in a trip from origin to destination under a single transport rate. Intermodality enhances the economic performance of a transport chain by using the modes in the most productive manner. Thus, the line-haul economies of rail may be exploited for long distances, with the efﬁciencies of trucks providing local pick up and delivery. The key is that the entire trip is seen as a whole, rather than as a series of legs, each marked by an individual operation with separate sets of documentation and rates.
Figure 4.12 illustrates two alternatives to freight distribution. The ﬁrst is a conventional point-to-point multimodal network where origins (A, B and C) are independently linked to destinations (D, E and F). In this case, two modes (road and rail) are used. The second alternative involves the development of an integrated intermodal transport network. Trafﬁc converges at two transshipment points, rail terminals, where loads are consolidated. This can result in higher load factors and/or higher transport frequency, especially between terminals. Under such circumstances, the efﬁciency of such a network mainly resides in the transshipment capabilities of transport terminals.
The emergence of intermodalism has been brought about in part by technology (Muller, 1995). Techniques for transferring freight from one mode to another have facilitated intermodal transfers. Early examples include piggyback (TOFC: trailers on ﬂat cars), where truck trailers are placed on rail cars, and LASH (lighter aboard ship), where river barges are placed directly on board sea-going ships. The major development undoubtedly has been the container, which permits easy handling between modal systems. Containers have become the most important component for rail and maritime intermodal transportation.
While handling technology has inﬂuenced the development of intermodalism, another important factor has been the changes in public policy. Deregulation in the United States in the early 1980s liberated ﬁrms from government control. Companies were no longer prohibited from owning across modal types, and there developed a strong impetus towards intermodal cooperation. Shipping lines, in particular, began to offer integrated rail and road service to customers. The advantages of each mode could be exploited in a seamless system. Customers could purchase the service to ship their products from door to door, without having to concern themselves about modal barriers. With one bill of lading clients can obtain one through rate, despite the transfer of goods from one mode to another (Hayuth, 1987).
The provision of through bills of lading in turn necessitated a revolution in organization and information control. At the heart of modern intermodalism are data handling, processing and distribution systems that are essential to ensure the safe, reliable and cost-effective control of freight movements across several modes. Electronic Data
Multimodal point -to -point network
Intermodal integrated network
B B Transshipment
Figure 4.12 Multimodal and intermodal transportation
Interchange (EDI) is an evolving technology that is helping companies and government agencies (customs documentation) to cope with an increasingly complex global transport system.
Intermodalism, the container and maritime transport
Intermodalism originated in maritime space, with the development of the container in the late 1960s and has since spread to integrate other modes. It is not surprising that the maritime sector should have been the ﬁrst mode to pursue containerization. It was the mode most constrained by the time taken to load and unload the vessels. Containerization permits the mechanized handling of cargoes of diverse types and dimensions that are placed into boxes of standard dimensions. In this way, goods that might have taken days to be loaded or unloaded from a ship can now be handled in a matter of minutes (Slack,
One of the keys to the success of the container is that the International Standards
Organization (ISO) very early on established base dimensions. The reference size is the
20-foot box, 20 feet long, 8 feet high and 8 feet wide, or 1 Twenty-foot Equivalent Unit
(TEU). The other major size is the 40-foot box, which has the capacity to carry 4,400
VCRs or 267,000 video games or 10,000 pairs of shoes. Containers are either made of steel or aluminum and their structure confers ﬂexibility and hardiness. Each year, about 1.5 million TEU worth of containers are manufactured. The global inventory of containers was estimated to be around 15.9 million TEU by 2002. The standard 20-foot container costs about $2,000 and a 40-footer about $4,000.
Among the numerous advantages related to the success of containers in international transport, it is possible to note several elements:
• Standard transport product. A container can be manipulated anywhere in the world as its dimensions are an ISO standard. Indeed, transfer infrastructures allow
all elements (vehicles) of a transport chain to handle it with relative ease. The rapid diffusion of containerization was facilitated by the fact that its initiator, Malcolm McLean, purposely did not patent his invention. Consequently all segments of the industry, competitors alike, had access to the standard. It necessitated the construction of specialized ships and of lifting equipment.
• Flexibility of usage. A container can transport a wide variety of goods, ranging from
raw materials (coal, wheat), manufactured goods, and cars to frozen products. There
are specialized containers for transporting liquids (oil and chemical products) and perishable food items in refrigerated containers or reefers. About 1 million TEUs of reefers were being used by 2002.
• Management. The container, as an indivisible unit, carries a unique identiﬁcation
number and a size type code, enabling transport management not only in terms
of loads, but in terms of unit. Computerized management reduces waiting times considerably and allows the position of containers to be traced at any time. It enables containers to be assigned according to the priority, destination and available transport capacities.
• Costs. Containerization of shipping has reduced costs signiﬁcantly. Before container-
ization, maritime transport costs could account for between 5 and 10 percent of the
retail price of manufactured products; this share has been reduced to 1.5 percent. The main factors behind costs reductions reside in the speed and ﬂexibility incurred by containerization. It has permitted shipping to achieve ever greater economies of scale through the introduction of larger ships. A 5,000 TEU containership has operating costs per container that are 50 percent lower than a 2,500 TEU vessel.
• Speed. Transshipment operations are minimal and rapid. A modern containership has a monthly capacity of three to six times more than a conventional cargo ship.
This is notably attributable to gains in transshipment time as a crane can handle roughly 30 movements (loading or unloading) per hour. Port turnaround times have thus been reduced from 3 weeks to about 24 hours. It takes on average between 10 and 20 hours to unload 1,000 TEUs compared with between 70 and 100 hours for a similar quantity of general cargo. A regular freighter can spend between half and two-thirds of its useful life in port. With less time in port, containerships can spend more time at sea, and thus be more proﬁtable to operators. Further, containerships are on average 35 percent (19 knots versus 14 knots) faster than regular freighter ships. System-wide, the outcome has been a reduction of costs by about 30 percent because of containerization.
• Warehousing. The container limits the risks for goods it transports because it is
resistant to shocks and weather conditions. The packaging of goods it contains is
therefore simpler and less expensive. Containers ﬁt together, permitting stacking on ships and on the ground. The container is consequently its own warehouse.
• Security. The contents of the container are anonymous to outsiders as it can only be
opened at the origin, at customs and at the destination. Thefts, especially those of
valued commodities, are therefore considerably reduced.
In spite of numerous advantages in the usage of containers, some drawbacks are evident:
• Consumption of space. A containership of 25,000 tons requires a minimum of 12 hectares of unloading space. Conventional port areas are not adequate for container
handling. Consequently, containers have modiﬁed the local geography of ports (see
• Infrastructure costs. Container handling infrastructures, such as gantry cranes, yard
equipment, road and rail access, represent important investments for port authorities
and load centers. Several developing countries cannot afford these infrastructures and so cannot participate in international trade.
• Management logistics. The management logistics of containers is very complex.
This requires high levels of information technology for the recording, positioning
and ordering of containers handled.
• Empty travel. At the global scale, it is rare for the origins and destinations of
containers to be in equilibrium. Most container trade is imbalanced, and thus
containers “accumulate” in some places and must be shipped back to locations where there are deﬁcits. Many containers are moved empty. Either full or empty, a container takes the same amount of space on the ship or in a storage yard and takes the same amount of time to be transshipped. As a result, shipping lines waste substantial amounts of time and money in repositioning empty containers.
• Illicit trade. By its conﬁdential character, the container is a common instrument used
in the illicit trade of drug and weapons, as well as for illegal immigrants. Concerns
have also been raised about containers being used for terrorism. Electronic scanning systems are being implemented to remotely inspect the contents of containers at major gateways.
Intermodalism and other modes
With the deregulation and privatization trends begun in the 1980s, containerization, which was already well established in the maritime sector, could spread inland. The
shipping lines were among the ﬁrst to exploit the intermodal opportunities that US deregulation permitted. They could offer door-to-door rates to customers by integrating rail services and local truck pick up and delivery in a seamless network. To achieve this they leased trains, managed rail terminals, and in some cases purchased trucking ﬁrms. In this way, they could serve customers across the country by offering door-to-door service from suppliers located around the world. The move inland also led to some signiﬁcant developments, most notably the double-stacking of containers on rail cars. This produced important competitive advantages for intermodal rail transport (Muller,
Other parts of the world have not developed the same degree of synergies between rail and shipping as is found in North America. However, there appears to be a trend towards closer integration in many regions. In Europe, rail intermodal services are becoming well established between the major ports, such as Rotterdam, and southern Germany, and between Hamburg and Eastern Europe (van Klink and van den Berg, 1998). Rail shuttles are also making their appearance in China.
While rail intermodal transport has been relatively slow to develop in Europe, there are extensive interconnections between barge services and ocean shipping, particularly on the Rhine (Notteboom and Konings, 2004). Barge shipping offers a low-cost solution to inland distribution where navigable waterways penetrate to interior markets. This solution is being tested in North America, where the Port Authority of New York and New Jersey is sponsoring barge services to Albany and several other destinations.
While it is true that the maritime container has become the work horse of international trade, other types of containers are found in certain modes, most notably in the airline industry. High labor costs and the slowness of loading planes, which require a very rapid turnaround, made the industry very receptive to the concept of a loading unit of standard dimensions. The maritime container was too heavy and did not ﬁt the rounded conﬁguration of a plane’s fuselage, and thus a box speciﬁc to the needs of the airlines was required. The major breakthrough came with the introduction of wide-bodied aircraft in the late 1970s. Lightweight aluminum boxes could be ﬁlled with passengers’ baggage or parcels and freight, and loaded into the holds of the planes using tracking that requires little human assistance.
A unique form of intermodal unit has been developed in the rail industry, particularly in the USA. Roadrailer is essentially a road trailer that can also roll on rail tracks. It is unlike the TOFC (piggyback) system that requires the trailer be lifted onto a rail ﬂat car. Here the rail bogies may be part of the trailer unit, or be attached in the railway yard. The road unit becomes a rail car, and vice versa. It is used extensively by a major US rail company, Norfolk Southern, whose “Triple Crown” service provides just-in-time deliveries between the automobile parts manufacturers located in Michigan, and the assembly plants located in Georgia, Texas and Mexico and Canada.
Intermodalism and production systems
NS’s Triple Crown Service is but one example of how transport chains are being integrated into production systems. As manufacturers spread their production facilities and assembly plants around the globe to take advantage of local factors of production, transportation becomes an ever more important issue. The integrated transport chain is itself being integrated into the production and distribution processes. Transport can no longer be considered as a separate service that is required only as a response to supply and demand conditions. It has to be built into the entire supply chain system, from multi- source procurement, to processing, assembly and ﬁnal distribution (Robinson, 2002).
While many manufacturing corporations may have in-house transportation departments, increasingly the complex needs of the supply chain are being contracted out to third parties. Third party logistics providers (3PL) have emerged from traditional intermediaries such as forwarders, or from transport providers such as FEDEX or Maersk-SeaLand. Because the latter are transporters themselves, they are referred to as fourth party logistics providers (4PL). Both groups have been at the forefront of the intermodal revolution that is now assuming more complex organizational forms and importance. In offering door-to-door services, the customer is no longer aware or necessarily concerned with how the shipment gets to its destination. The modes used and the routing selected are no longer of immediate concern. The preoccupation is with cost and level of service. This produces a paradox, that for the customer of intermodal services geographic space becomes meaningless; but for the intermodal providers routing and modal choice assume an ever greater importance.
Concept 3 – Passengers or freight?
Advantages and disadvantages
With some exceptions, such as buses and pipelines, most transport modes have developed to handle both freight and passenger trafﬁc. In some cases both are carried in the same vehicle, as for example in the airlines where freight is transported in the cargo holds of passenger aircraft. In others, different types of vehicle have been developed for freight and passenger trafﬁc, but they both share the same road bed, as for example in rail and road trafﬁc. In shipping, passengers and freight used to share the same vessel, but since the 1950s specialization has occurred, and the two are now quite distinct, except for ferries and some RORO services.
The sharing by freight and passengers of a mode is not without difﬁculties, and indeed some of the major problems confronting transportation occur where the two seek to co-inhabit. For example, trucks in urban areas are seen as a nuisance and a cause of congestion by passenger transport users. The poor performance of some modes, such as rail, is seen as the outcome of freight and passengers having to share routes. This raises the question as to whether freight and passengers are compatible. The main advantages of joint operations are:
• High capital costs can be justiﬁed more easily with a diverse revenue stream (rail, airlines, ferries).
• Maintenance costs can be spread over a wider base (rail, airlines).
• The same traction sources can be used for both freight and passengers, particularly
The main disadvantages of joint operations are:
• Locations of demand rarely match – origin/destination of freight is usually quite distinct spatially from passenger trafﬁc.
• Frequency of demand is different – for passengers the need is for high frequency
service, for freight it tends to be somewhat less critical.
• Timing of service – demand for passenger services has speciﬁc peaks during the day,
for freight it tends to be more evenly spread throughout the day.
• Trafﬁc balance – on a daily basis passenger ﬂows tend to be in equilibrium, for
freight, market imbalances produce empty ﬂows.
• Reliability – although freight trafﬁc increasingly demands quality service, for passengers delays are unacceptable.
• Sharing routes favors passenger trafﬁc – passenger trains are given priority; trucks
may be excluded from areas at certain times of the day.
• Different operational speeds – passengers demand faster service.
• Security screening measures for passengers and freight require totally different
A growing divergence
In several modes and across many regions passenger and freight transport is being unbundled.
• Shipping. It has already been mentioned that in the maritime sector passenger services have become divorced from freight operations, the exception being some
ferry services where the use of RORO ships on high frequency services adapt to the needs of both market segments. Deep sea passenger travel is now dominated by cruise shipping which has no freight-handling capabilities, and bulk and general cargo ships rarely have an interest or the ability to transport passengers.
• Rail. Most rail systems still operate passenger and freight business. Where both
segments are maintained, the railways give priority to passengers, since rail persists as
the dominant mode for inter-city transport in India, China and much of the developing world. In Europe, the national rail systems and various levels of government have prioritized passenger service as a means of checking the growth of the automobile, with its resultant problems of congestion and environmental degradation (see Chapter
8). Signiﬁcant investments have occurred in improving the comfort of trains and in passenger rail stations, but most notable have been the upgrading of track and equipment in order to achieve higher operational speeds. Freight transport has tended to lose out because of the emphasis on passengers. Because of their lower operational speeds, freight trains are frequently excluded from daytime slots, when passenger trains are most in demand. Overnight journeys may not meet the needs of freight customers. This incompatibility is a factor in the loss of freight business by most rail systems still trying to operate both freight and passenger operations. In Europe, there are signs that the two markets are being separated. First, it is occurring at the management level. The liberalization of the railway system that is being forced by the European Commission is resulting in the separation of passenger and freight operations. This had already taken place in the UK when British Rail was privatized. Second, the move towards high-speed passenger rail service necessitated the construction of separate rights of way for the TGV trains. This has tended to move passenger train services from the existing tracks, thereby opening up more daytime slots for freight trains. Third, the Dutch are building a freight only track, the Betuwe Line, from the port of Rotterdam to the German border, having already sold the freight business of the Netherlands railway (NS) to DB (Deutsche Bahn), and having opened up the freight business to other ﬁrms. In North America, the divorce between freight and passenger rail business is most complete. The private railway companies could not compete against the automobile and airline industry for passenger trafﬁc, and consequently withdrew from the passenger business in the 1970s. They were left to operate a freight only system, which has generally been successful, especially with the introduction of intermodality. The passenger business has been taken over by public agencies, AMTRAK in the USA, and VIA Rail in Canada. Both are struggling
0 50 100 150 200 250 300
Passenger-kms (billions) Ton-kms (billions)
Figure 4.13 Domestic rail passenger travel and freight activity, G7 Countries, 1996 (Source: US Department of Transportation, BTS, G–7 Countries: Transportation Highlights)
to survive. A major problem is that they have to lease trackage from the freight railways, and thus slower freight trains have priority (Figure 4.13).
• Roads. Freight and passenger vehicles still share the roads. The growth of freight
trafﬁc is helping increase road congestion and in many cities concerns are being
raised about the presence of trucks (see Chapters 7 and 9). Already, restrictions are in place on truck dimensions and weights in certain parts of cities, and there are growing pressures to limiting truck access to non-daylight hours. Certain highways exclude truck trafﬁc – the parkways in the USA for example. These are examples of what is likely to become a growing trend – the need to separate truck from passenger vehicle trafﬁc. Facing chronic congestion around the access points to the port of Rotterdam and at the freight terminals at Schiphol airport, Dutch engineers have worked on feasibility studies of developing separate underground road networks for freight vehicles.
• Air transport. Air transport is the mode where freight and passengers are most
integrated. Yet even here a divergence is being noted. The growth of all-freight airlines
and the freight-only planes operated by some of the major carriers, such as Singapore Airlines, are heralding a trend. The interests of the shippers, including the timing of the shipments and the destinations, are sometimes better served than in passenger aircraft. The divergence between passengers and freight is also being accentuated by the growing importance of charter and “no frills” carriers. Their interest in freight is very limited, especially when their business is oriented towards tourism, since tourist destinations tend to be lean freight generating locations.
Method 1 – Technical performance indicators
Multimodal transportation networks rest upon the combinatory costs and performance of transport modes, or what is referred to as economies of scope. For instance, a single container shipped overseas at the lowest cost from its origin can go from road, to seaway, to railway and to road again before reaching its destination. Freight shippers and carriers therefore require quantitative tools for decision-making in order to compare performances of various transport modes and transport networks. Time-efﬁciency
becomes a set imperative for both freight and passenger transit in private as well as in public sector activities.
Performance indicators are widely used by geographers and economists to empirically assess the technical performance (not to be confused with economic performance, for there can exist a lag between the two) of differing transport modes, in other words their capacity to move goods or passengers around. Hence, basic technical performance calculations can be particularly useful for networks’ global performance analysis as well as for modal comparison, analysis, and evaluation by bridging both physical attributes (length, distance, conﬁguration, etc.) and time-based attributes (punctuality, regularity, reliance, etc.) of networks. Some indicators are currently used to measure freight and passenger transport. Table 4.1 gives a few of the most common ones.
Passenger-km or ton-km are standard units for measuring travel that consider the number of people traveling or ton output and distance traveled. For example,
120 passenger-km represents 10 passengers traveling 12 kilometers or 2 passengers traveling 60 kilometers, and so on. More speciﬁcally, such indicators are of great utility by allowing cross-temporal analysis of a transport nexus or given transport modes.
Economic impact indicators
Undoubtedly, transportation plays a considerable role in the economy with its omni- presence throughout the production chain, at all geographic scales. It is an integral constituent of the production–consumption cycle. Economic impact indicators help to appreciate the relationship between transport systems and the economy as well as to inform on the economic weight of this type of activity. Geographers should be familiar with basic econometric impact indexes (see Table 4.2).
Efﬁciency is usually deﬁned as the ratio of input to output, or the output per each unit of input. Modal variations in efﬁciency will depend heavily on what is to be carried, the distance traveled, the degree and complexity of logistics required as well as economies of scale. Freight transport chains rest upon the complementarity of cost-efﬁcient and
Table 4.1 Commonly used performance indicators
|Passenger/freight density||passenger-km/km||ton-km/km||A standard measure of|
|Mean distance traveled||passenger-km/passenger||ton-km/ton||A measure of the|
|capacity of networks|
|and different transport|
|Mean per capita
ton output (freight) Mean number of trips
|passengers/population||tons/population||Used to measure the
relative performance of transport modes.
|per capita (passenger)
number of passengers
actual load (ton)/
Especially useful with
|overall load capacity
of logistics associated
|of freight (i.e. the|
|problem of empty|
|returns). Can also be|
|used to measure transit|
Table 4.2 Measures of efﬁciency
Efﬁciency indicators Scale-speciﬁc indicators
(Factors of production) Micro Meso-macro
output/capital transport sector income/ output/GDP
local income output/labor output/local income
time-efﬁcient modes, seeking most of the time a balanced compromise rather than an ideal or perfect equilibrium.
Maritime transport is still the most cost-efﬁcient way to transport bulk merchandise over long distances. On the other hand, while air transport is recognized for its unsurpassed time-efﬁciency versus other modes over long distances, it remains an expensive option. Thus, vertical integration, or the absorption of transportation activities by producers, illustrates the search for these two efﬁciency attributes by gaining direct control over inputs.
Transportation and economic impacts
The relationship between transport systems and their larger economic frame becomes clear when looking at restructuring patterns which carriers and ﬁrms are currently undergoing. Structural mutations, best illustrated by the popularity of just-in-time practices, are fuelled by two opposing yet effective forces: transporters seek to achieve economies of scale while having to conform to an increasingly “customized” demand.
Factor substitution is a commonly adopted path in order to reduce costs of production and attain greater efﬁciency. Containerization of freight by substituting labor for capital and technology is a good illustration of the phenomenon. Measures of capital productivity for such capital-intensive transport means are of central importance; an output/capital ratio is then commonly used. While the output/labor ratio performs the same productivity measurement but for the labor input (this form of indicator can be used for each factor of production in the system), a capital/labor ratio aims at measuring which factor predominates within the relationship between capital and labor productivity. The above set of indicators therefore provides insights on the relative weight of factors within the production process.
More scale-speciﬁc indicators can also be used to appreciate the role of transport within the economy. Knowing freight transport both contributes to and is fuelled by a larger economic context, freight output can be confronted against macro-economic indicators: an output/GDP ratio measures the relationship between economic activity and trafﬁc freight, in other words the trafﬁc intensity. At the local level, the status of the transport industry within the local economy is given by a transport sector income / local income ratio. Still at a micro-scale, ﬁnally, a measure of the relative production value of freight output is provided by an output/local income ratio.
Underlying objectives of application of such indicators are as varied as they are numerous. Efﬁciency indicators constitute valuable tools to tackle project viability questions as well as to measure investment returns and cost/subsidy recovery of transport systems. Input–output analyses making use of some of the above indicators are also instrumental to the development of global economic impact indexes and productivity assessment concepts such as the Total Factor Productivity (TFP) and to identify sources of productivity gains.
In transport, to ﬁnd out if a terminal is specialized in the transshipment and/or handling of a particular kind of merchandise or if, inversely, it transfers a wide variety of merchandise, we can calculate a specialization index. For example, the index can be used to know if a port is specialized in the handling of a certain type of product (e.g. containers) or if it handles a wide range of merchandise. As a consequence, such an index is quite versatile and has a variety of applications; it informs geographers on the activities of any type of terminal (port, train and airport). In the case of an airport terminal, one could ask if a given airport deals with only a single type of ﬂights/passengers (local, national, international, etc.) or if it welcomes several. The specialization index (SI) is calculated using the following formula:
SI = i ⎛ 2
⎝ i ⎠
which is the total of squares of tonnage (or monetary value) of each type of merchandise i (t ) handled at a terminal over the square of the total volume tonnage (or monetary value) of merchandise handled at the terminal.
So, if the specialization index tends toward 1, such a result indicates that the terminal is highly specialized. If, inversely, the index tends toward 0, it means that the terminal’s activity is diversiﬁed. Thus, the specialization index is called upon to appreciate the degree of specialization/diversiﬁcation of a port, an airport, a train station or any type of terminal.
Certain kinds of merchandise are often transshipped at particular terminals rather than at others. Thus, the degree of concentration of a certain type of trafﬁc in a terminal (port, airport, train station) compared with the average for all the terminals, can be measured by using the location coefﬁcient.
The location coefﬁcient is the share of trafﬁc occupied by a type of merchandise at a terminal over the share of trafﬁc of the same type of merchandise among the total trafﬁc of all terminals of the same type.
In the ﬁeld of transportation, the location coefﬁcient (LC) is calculated by using the following formula:
⎜ M ti ⎟
⎜ ∑Mti ⎟
⎛ ∑Mt ⎞
⎜ t ⎟
⎜ ∑M ⎟
is the trafﬁc of a merchandise t at a terminal i, M
is the total of all
merchandises of type t for all terminals and M is the total of all types of merchandises for all terminals.
The greater the value of the index, the greater is the degree of trafﬁc of a certain type of merchandise. Possible outcomes are of three types:
• A ﬁgure lower than 1 indicates that the trafﬁc of the chosen merchandise in the terminal is under-represented compared with the same merchandise in all the
• A ﬁgure equal to 1 indicates that the quantity of trafﬁc of the chosen merchandise in
a terminal is proportional to its participation in total trafﬁc.
• Finally, a coefﬁcient above 1 indicates that the trafﬁc of the chosen merchandise in a
given terminal is preponderant in total trafﬁc.
Beside using the location coefﬁcient to evaluate the relative weight of a type of trafﬁc in a terminal, the location coefﬁcient can be used to appreciate the importance of an economic activity for a community compared with the importance of the same activity within a deﬁned larger area (e.g. province, country, world, etc.). The larger geographic entity is also known as the benchmark and is critical in the calculation of the location coefﬁcient.
Agusdinata, B. and W. de Klein (2002) “The Dynamics of Airline Alliances”, Journal of Air Transport
Management, 8, 201–11.
Brooks, M. (2000) Sea Change in Liner Shipping, New York: Pergamon. Graham, B. (1995) Geography and Air Transport, Chichester: Wiley. Hayuth, Y. (1987) Intermodality, Essex: Lloyds of London Press.
Muller, G. (1995) Intermodal Transport, Westport, CT: Eno Foundation.
Notteboom, T. and R. Konings (2004) “Network Dynamics in Container Transport by Barge”, Belgeo,
Robinson, R. (2002) “Ports as Elements in Value-driven Chain Systems: The New Paradigm”, Maritime
Policy and Management, 29, 241–55.
Slack, B. (1998) “Intermodal Transportation” in B.S. Hoyle and R. Knowles (eds) Modern Transport
Geography, 2nd edn, Chichester: Wiley, pp. 263–90.
Slack, B. (2004) “Corporate Realignment and the Global Imperatives of Container Shipping” in D.
Pinder and B. Slack (eds) Transport in the Twenty-First Century, London: Routledge, pp. 25–39.
van Klink, A. and G.C. van den Berg (1998) “Gateways and Intermodalism”, Journal of Transport
Geography, 6, 1–9.
5 Transport terminals
All spatial ﬂows, with the exception of personal vehicular and pedestrian trips, involve movements between terminals. With these two exceptions, all transport modes require assembly and distribution of their trafﬁc, both passenger and freight. For example, passengers have to go to bus terminals and airports ﬁrst in order to reach their ﬁnal destinations, and freight has to be consolidated at a port or a rail yard before onward shipment. Terminals are, therefore, essential links in transportation chains. The goal of this chapter is to examine the strong spatial and functional character of transport terminals. They occupy speciﬁc locations and they exert a strong inﬂuence over their surroundings. At the same time they perform speciﬁc economic functions and serve as foci for clusters of specialized services.
Concept 1 – The function of transport terminals
The nature of transport terminals
A terminal may be deﬁned as any facility where freight and passengers are assembled or dispersed. They may be points of interchange involving the same mode of transport. Thus, a passenger wishing to travel by train from Paris to Antwerp may have to change in Brussels, or an air passenger wishing to ﬂy between Montreal and Winnipeg may have to change planes in Toronto. They may also be points of interchange between different modes of transport, so that goods being shipped from the US Mid-West to the Ruhr in Germany may travel by rail from Cincinnati to the port of New York, be put on a ship to Rotterdam, and then placed on a barge for delivery to Duisberg. Transport terminals, therefore, are central and intermediate locations in the movements of passengers and freight.
In order to carry out the transfer and bundling of freight and passengers, speciﬁc equipment and infrastructures are required. Differences in the nature, composition and timing of transfer activities give rise to signiﬁcant differentiations in the form and function between terminals. A basic distinction is between passenger and freight transfers, because in order to carry out the transfer and bundling of each type, speciﬁc equipment and infrastructures are required.
With one exception, passenger terminals require relatively little speciﬁc equipment. This is because individual mobility is the means by which passengers access buses, ferries or trains. Certainly, services such as information, shelter, food and security are required, but the layouts and activities taking place in passenger terminals tend to be simple and require relatively little equipment. They may appear congested at certain
times of the day, but the ﬂows of people can be managed successfully with good design of platforms and access points, and with appropriate scheduling of arrivals and departures. The amount of time passengers spend in such terminals tends to be brief. As a result bus termini and railway stations tend to be made up of simple components, from ticket ofﬁces and waiting areas to limited amounts of retailing.
Airports are of a different order. They are among the most complex of terminals functionally (Caves and Gosling, 1999). Moving people through an airport has become a very signiﬁcant problem, not least because of security concerns. Passengers may spend several hours in transit, with check-in and security checks on departure, and baggage pick up and in many cases customs and immigration on arrival. Planes may be delayed for a multitude of reasons. The result is that a wide range of services have to be provided for passengers not directly related to the transfer function, including restaurants, bars, stores, hotels, in addition to the activities directly related to operations such as check- in halls, passenger loading ramps and baggage handling facilities. At the same time, airports have to provide for the very speciﬁc needs of the aircraft, from runways to maintenance facilities, from ﬁre protection to air trafﬁc control.
Measurement of activities in passenger terminals is generally straightforward. The most common indicator is the number of passengers handled, sometimes differentiated according to arrivals and departures (see Figure 5.1). Transfer passengers are counted twice (once on arrival, once on departure), and so airports that serve as major transfer facilities inevitably record high passenger totals. This is evident in Figure 5.1 where in-transit passengers at the two leading airports, ATL and ORD, account for over 50 percent of the total passenger movements. A further measure of airport activity is number of aircraft movements, a ﬁgure that must be used with some caution because it pays no regard to the capacity of planes. High numbers of aircraft movements may not be correlated with passenger trafﬁc totals.
Las Vegas (LAS)
Dalas/Ft Worth (DFW)
Los Angeles (LAX)
0 10 20 30 40 50 60 70 80
Figure 5.1 World’s largest passenger airports, 2003 (in millions) (Source: Airports Council
Freight handling requires speciﬁc loading and unloading equipment. In addition to the facilities required to accommodate ships, trucks and trains (berths, loading bays and freight yards respectively), a very wide range of handling gear is required that is determined by the kinds of cargoes handled. The result is that terminals are differentiated functionally both by the mode involved and the commodities transferred. A basic distinction is that between bulk and general cargo:
• Bulk refers to goods that are handled in large quantities that are unpackaged and are available in uniform dimensions. Liquid bulk goods include crude oil and reﬁned
products that can be handled using pumps to move the product along hoses and pipes. Relatively limited handling equipment is needed, but signiﬁcant storage facilities may be required. Dry bulk includes a wide range of products, such as ores, coal and cereals. More equipment for dry bulk handling is required, because the material may have to utilize specialized grabs and cranes and conveyer-belt systems.
• General cargo refers to goods that are of many shapes, dimensions and weights, such
as machinery and parts. Because the goods are so uneven and irregular, handling is
difﬁcult to mechanize. General cargo handling usually requires a lot of labor.
A feature of most freight activity is the need for storage. Assembling the individual bundles of goods may be time-consuming and thus some storage may be required. This produces the need for terminals to be equipped with specialized infrastructures such as grain silos, storage tanks, and refrigerated warehouses, or simply space to stockpile.
Measurement of freight trafﬁc through terminals is more complicated than for passengers. Because freight is so diverse, standard measures of weight and value are difﬁcult to compare and combine. Because bulk cargoes are inevitably weighty, terminals specialized in such cargoes will inevitably record higher throughputs measured in tons than others more specialized in general cargoes. This is evident from Figure 5.2, where the trafﬁc of the two leading ports, Singapore and Rotterdam, is dominated by petroleum. The reverse may be true if the value of commodities handled is the measure employed. The problem of measurement involving weight or volume becomes very difﬁcult when many types of freight are handled, because one is adding together goods
Marseilles Yokohama Pusan Antwerp
Hong Kong Shanghai Singapore
0 50 100 150 200 250 300 350
Figure 5.2 Throughput of the world’s major ports, 1997–2000 (in millions of metric tons)
that are inherently unequal. Care must be taken in interpreting the signiﬁcance of freight trafﬁc totals, therefore.
The difﬁculty of comparing trafﬁc totals of different commodities has led to attempts to “weight” cargoes based upon some indication of the value added they contribute to the terminal. The most famous is the so-called “Bremen” rule. This was developed in 1982 by the port of Bremen and was based on a survey of the labor cost incurred in the handling of one ton of different cargoes. The results found that handling one ton of general cargo equals three tons of dry bulk and 12 tons of liquid bulk. Although this is the most widely used method, other “rules” have been developed by individual ports, such as Rotterdam, and more recently by the port of Antwerp. The “Antwerp rule” indicates that the highest value added is the handling of fruit. Using this as a benchmark, forest products handling requires 3.0 tons to provide the same value added as fruit, cars 1.5 tons, containers 7 tons, cereals 12 tons, and crude oil 47 tons (Haezendonck, 2001).
Because they jointly perform transfer and consolidation functions, terminals are important economically because of the costs incurred in carrying out these activities. The trafﬁc they handle is a source of employment and beneﬁts regional economic activities, notably by providing accessibility to suppliers and customers. Terminal costs represent an important component of total transport costs. They are ﬁxed costs that are incurred regardless of the length of the eventual trip, and vary signiﬁcantly between the modes. They can be considered as:
• Infrastructure costs. Include construction and maintenance costs of facilities such as piers, runways, cranes and structures (warehouses, ofﬁces, etc.).
• Transshipment costs. The costs of loading and unloading passengers or freight.
• Administration costs. Many terminal facilities are managed by institutions such as
port or airport authorities or by private companies. In both cases administration costs
Because ships have the largest carrying capacities, they incur the largest terminal costs, since it may take many days to load or unload a vessel. Conversely, a truck or a passenger bus can be loaded much more quickly, and hence the terminal costs for road transport are the lowest. Terminal costs play an important role in determining the competitive position between the modes. Because of their high freight terminal costs, ships and rail are unsuitable for short-haul trips.
Figure 5.3 represents a simpliﬁed assumption concerning transport costs for three modes. It should be noticed that the cost curves all begin at some point up the cost axis. This represents terminal costs, and as can be seen, shipping (T3) and rail (T2) start with a signiﬁcant disadvantage compared with road (T1).
Competition between the modes is frequently measured by cost comparisons. Efforts to reduce transport costs can be achieved by using more fuel-efﬁcient vehicles, increasing the size of ships, and reducing the labor employed on trains. However, unless terminal costs are reduced as well, the beneﬁts would not be realized. For example, in water transportation, potential economies of scale realized by ever larger and more fuel-efﬁcient vessels would be negated if it took longer to load and off-load the jumbo ships.
Over the last forty years, very signiﬁcant steps to reduce terminal costs have been made. These have included introducing information management systems such as EDI
Figure 5.3 Terminal costs
(electronic data interchange) that have greatly speeded up the processing of information, removing delays typical of paper transactions. The most signiﬁcant development has been the mechanization of loading and unloading activities. Mechanization has been facilitated by the use of units of standard dimensions such as the pallet and most importantly, the container. The container, in particular, has revolutionized terminal operations (see Chapter 4). For the mode most affected by high terminal costs, ocean transport, ships used to spend as much as three weeks in a port undergoing loading and loading. The much larger ships of today spend less than a couple of days in port. A modern container ship requires approximately 750 man-hours to be loaded and unloaded. Prior to containerization it would have required 24,000 man-hours to handle the same volume of cargo. The rail industry too has beneﬁted from the container, which permits trains to be assembled in freight yards in a matter of hours instead of days.
Reduced terminal costs have had a major impact on transportation and international trade. Not only have they reduced over-all freight rates, thereby reshaping competition between the modes, but they have also had a profound effect on transport systems. Ships spend far less time in port, enabling ships to make many more revenue-generating trips per year. Efﬁciency in the airports, rail facilities and ports greatly improves the effectiveness of transportation as a whole.
Activities in transport terminals represent not just exchanges of goods and people, but constitute an important economic activity. Employment of people in various terminal operations represents an advantage to the local economy. Dockers, baggage handlers, crane operators, and air trafﬁc controllers are example of jobs generated directly by terminals. In addition there are a wide range of activities that are linked to transportation activity at the terminals. These include the actual carriers (airlines, shipping lines, etc.) and intermediate agents (customs brokers, forwarders) required to carry out the transfers. It is no accident that centers that perform major airport, port and rail functions are also important economic locales.
Terminals favor the agglomeration of related activities in their proximity and often adjacent to them (see Figure 5.4). This terminal–client link mainly involves warehousing and distribution (A). The contribution of transport terminals to regional economic growth can often be substantial. As the regional demand grows, so does the trafﬁc handled by the related terminal. This in turn can spur further investments to expand the capabilities of the terminal and the creation of a new terminal altogether (B).
Economists have identiﬁed clusters as a critical element in shaping competition between countries, regions and industries (Porter, 1990). Clusters are deﬁned as a population of interdependent organizations that operate in the same value chain and are geographically concentrated. This concept has been recently applied to seaports (de
Terminal-dependent activities Agglomeration
A Terminal-client link
Cluster Structure (Dis)agglomeration forces
Internal competition Cluster barriers Heterogeneity
Cluster governance Intermediaries Trust
Collective action regimes
Figure 5.4 Terminals as clusters and growth poles
Langen, 2004). The seaport cluster is made up of ﬁrms engaged in the transfer of goods in the port and their onward distribution. It also includes logistics activities as well as processing ﬁrms and administrative bodies. The performance of the seaport cluster is deﬁned as the value added generated by the cluster, and is shaped by the interrelationships between the structure of the cluster and its governance. Cluster structure refers to the agglomeration effects and the degree of internal cohesion and competition. Cluster governance relates to the mix of, and relations between, organizations and institutions that foster coordination and pursue projects that improve the cluster as a whole. When applied to the port of Rotterdam, it was suggested that a key role was played by the intermediary ﬁrms, those that operated services and activities for core transport ﬁrms. High levels of trust between ﬁrms led to lower transaction costs, and leader ﬁrms were very signiﬁcant because they helped strengthen the agglomeration.
Presented as a new approach, cluster theory is extending what others, including geographers, have recognized for some time, that port activity, historically at least, generates strong agglomeration economies that produce strong spatially distinct port communities (Slack, 1989). Despite similarities in results from economic impact studies, airports and rail terminals have not yet received the attention of cluster theorists.
Concept 2 – Terminals and location
Location and spatial relations play a signiﬁcant role in the performance and development of transport terminals. As in all locational phenomena there are two dimensions involved. First is the issue of site, or absolute location. Terminals occupy very speciﬁc sites, usually with stringent requirements. Their site determinants may play an important role in shaping performance. The second component is relative location, or location relative to other terminals in the network. The spatial relations of terminals are an extremely important factor in shaping competition. Together, absolute and relative locations provide justiﬁcation for the fundamental signiﬁcance of geography in understanding transport terminals.
The nature of the function of the terminal is critical to understand its site features. Locations are determined according to the mode and the types of activities carried on.
As will be explained below, the period of time when site development took place is also a factor in site selection and elaboration.
Ports are bound by the need to serve ships, and so access to navigable water has been historically the most important site consideration. Before the industrial revolution, ships were the most efﬁcient means of transporting goods, and thus port sites were frequently chosen at the head of water navigation, the most upstream site (Bird, 1963). Many major cities owed their early pre-eminence to this fact: London on the Thames and Montreal on the St. Lawrence River. Sites on tidal waterways created a particular problem for shipping because of the twice-daily rise and fall of water levels at the berths, and there developed by the eighteenth century the technology of enclosed docks, with lock gates. Because ship transfers were slow, and vessels typically spent weeks in port, a large number of berths were required. This frequently gave rise to the construction of piers and jetties to increase the number of berths per given length of shoreline.
Over time, changes in ships and handling gave rise to new site requirements. By the post-World War II period a growing specialization of vessels emerged, especially the development of bulk carriers. These ships were the ﬁrst to achieve signiﬁcant economies of scale, and their size grew very quickly. For example the world’s largest oil tanker in
1947 was only 27,000 dwt, by the mid-1970s it was in excess of 500,000 dwt. There was thus a growing vessel specialization and increase in size which resulted in new site requirements, especially the need for dock space and greater depths of water. These site changes and developments in port infrastructure were captured in the Anyport model of port evolution developed by Bird. Based on evidence of the evolution of British ports, Bird (1963) originally proposed a ﬁve-stage model to demonstrate how facilities in a typical port develop. Starting from the initial port site with small lateral quays adjacent to the town center, the elaboration of wharfs is the product of evolving maritime technologies and improvements in cargo handling.
Figure 5.5 summarizes the stages in three phases:
• Setting. The initial setting of a port is strongly dependent on geographical consider- ations. On the example in Figure 5.5, the setting is related to the furthest point of
inland navigation by sailing ships. The port evolves from the original site close to the city center, and is characterized by several simple quays (1). For many centuries until the industrial revolution, ports remained rather rudimentary in terms of their
Setting Expansion Specialization
1 2 5
2 3 4 4
Water depth Highway
Figure 5.5 The evolution of a port (based on the Anyport model)
terminal facilities. Port-related activities were mainly focused on warehousing and wholesaling, located on sites directly adjacent to the port.
• Expansion. The industrial revolution triggered several changes that impacted on port
activities. Quays were expanded, and jetties were constructed to handle the growing
amounts of freight and passengers as well as larger ships (2). As the size of ships expanded, shipbuilding became an activity that required the construction of docks (3). Further, the integration of rail lines with port terminals enabled access to vast hinterlands with a proportional growth in maritime trafﬁc. Port-related activities also expanded to include industrial activities. This expansion mainly occurred downstream.
• Specialization. The next phase involved the construction of specialized piers
to handle freight such as containers, ores, grain, petroleum and coal (4), which
expanded warehousing needs signiﬁcantly. Larger high-capacity ships often required dredging or the construction of long jetties, granting access to greater depths. This evolution implied for several ports a migration of their activities away from their original setting and an increase of their handling capacities. In turn, original port sites, commonly located adjacent to downtown areas, became obsolete and were abandoned. Numerous reconversion opportunities of port facilities to other uses (waterfront parks, housing and commercial developments) were created (5).
Bird suggested that Anyport was intended not to display a pattern into which all ports must be forced, but to provide a base with which to compare the development of actual ports. The model has been tested in a variety of different conditions. While local conditions do produce differences in detail, there are sufﬁcient similarities to make the Anyport concept a useful description of port morphological development. The emergence of new container terminals continues the trend towards specialization and the search for sites adjacent to deeper water. A number of authors have amended the original Anyport model to include more recent developments (Charlier, 1992; McCalla,
One of the features that Anyport brings out is the changing relation between ports and their host cities. The model describes the growing repulsion by the rest of the urban milieu. This aspect has been worked upon over the last two decades by a number of geographers investigating the redevelopment of harbor land. Hoyle (1988) proposed an Anyport-type model, which instead of stressing the port infrastructure development, emphasizes the changing linkages between the port and the city. One of these urban linkages is the redevelopment of old port sites for other urban uses, such as Docklands in London and Harborfront in Baltimore.
Airports require very large sites. They need space for runways, terminal buildings, maintenance hangars and parking. While there are considerable variations in the scale of different airports, minimum sizes in excess of 500 hectares represent enormous commitments of urban land. Thus, airports are sited at the periphery of urban areas, because it is only there that sufﬁcient quantities of land are available. Many airports built in the 1940s and 1950s on the periphery now ﬁnd themselves surrounded by subsequent metropolitan development. Pearson Airport (Toronto) and O’Hare Airport (Chicago) are examples. These airports have served as growth poles, drawing commercial, industrial as well as residential developments to those sectors of the city (McCalla et al., 2001).
New site development today, in North America and Europe at least, is becoming very difﬁcult because available sites are frequently so far from the urban core that even if
planning permission could be obtained, it would lead to very signiﬁcant diseconomies because of the distance from business and demographic cores. It is signiﬁcant that there have been few new large-scale airport developments in North America over the last 30 years, and the examples of Denver and Montreal illustrate how difﬁcult and contentious development has been (Goetz and Szyliowicz, 1997). The result has been that most airports have to adjust to their existing sites, by reconﬁguring runways and renovating existing terminal facilities, as for example Chicago and Toronto.
Rail terminal sites
Rail terminals, because they are not as space-extensive as airports and ports, suffer somewhat less from site constraints. Many rail terminals were established in the nineteenth century during the heyday of rail development, and while the sites may have been on the edge of urban areas at the time, they now ﬁnd themselves surrounded by urban development. Individually, rail terminals may not be as extensive as airports or ports, but cumulatively the area of all the rail sites in a city may exceed those of the other modes. For example, in Chicago the combined area of rail freight yards exceeds that of the airports.
Passenger rail terminals are typically in the heart of downtown cores. At one time their sites may have been on the edge of the pre-industrial city, as is the case for London and Paris but today they are very much part of the CBD. The stations are typically imposing buildings reﬂecting the power and importance represented by the railway in the nineteenth and early twentieth centuries. Grand Central Station in New York or St. Pancras station in London are impressive architectural achievements unmatched in any other type of transportation terminal. As rail passenger trafﬁc has declined, the need for many of these stations has diminished, and a rationalization has resulted in the conversion of many stations to other uses, sometimes with striking effects, such as the Musée d’Orsay in Paris and Windsor Station in Montreal.
Rail freight yards did not have to be quite so centrally located, and because they required a great deal of space for multiple tracks for marshalling they were more likely located on entirely greenﬁeld sites than the passenger terminals. However, rail yards tended to attract manufacturing activities, and thus became important industrial zones.
By the end of the twentieth century many of the industries around rail freight yards had relocated or disappeared, and in many cities these former industrial parks have been targets of urban revitalization. This has been accompanied by closure of some of the rail yards, either because they were too small for contemporary operating activities, or because of shrinkage of trafﬁc base. However, in North America many older rail freight yards have been converted into intermodal facilities because of the burgeoning trafﬁc involving containers and road trailers. The ideal conﬁguration for these terminals, however, is different from the typical general freight facility with their need for multiple spurs to permit the assembling of wagons to form train blocks. Intermodal trains tend to serve a more limited number of cities and are more likely to be dedicated to one destination. The need here is for long but fewer rail spurs. The conﬁguration typically requires a site over three kilometers in length and over 100 hectares in area. In addition, good access to the highway system is a requisite as well as a degree of automation to handle the transshipment demands of modern intermodal rail operations.
In some cases, the existing stock of terminals has been found to be wanting in terms of conﬁguration or location with regards to expressways. Thus, new rail yards have been built on the fringe of metropolitan areas, such as Canadian Paciﬁc’s Vaughan terminal or Canadian National’s Brampton facilities in Toronto.
Geographers have long recognized situation, or relative location, as an important component of location. It refers to the position of places with regard to other places. Accessibility is relative, because the situation of places changes over time. For example, ports in the Mediterranean were in the heart of the western world during the Greek and Roman eras, and Genoa and Venice prospered during the Middle Ages. The exploitation of the Americas changed the location of these places, since the Mediterranean now became a backwater. The opening of the Suez Canal in the nineteenth century refocused the relative location of the Mediterranean again.
Spatial relationships between terminals are a vital element in competition, particularly for ports and rail terminals, and geographers have developed a number of concepts to explore these locational features (Fleming and Hayuth, 1994).
• Centrality. One of the most enduring concepts in urban geography is central place theory, with its emphasis on centrality as a feature of the urban hierarchy. Cities more
centrally located to markets are larger with a wider range of functions. Transport accessibility is equated with size, and thus many large terminals arise out of centrality. Examples include Heathrow Airport, London, whose trafﬁc pre-eminence is related to the city’s location in the heart of the most developed part of Britain, as well as Britain’s functional centrality to its former empire. The port of New York owes its pre-eminence in part to the fact that it is at the heart of the largest market area in the USA.
• Intermediacy. This term is applied to the frequent occurrence of places gaining
advantage because they are between other places. The ability to exploit transshipment
has been an important feature of many terminals. Anchorage, for example, was a convenient airport located on the great circle air routes between Asia, Europe and Continental USA. For many years passengers alighted here while the planes refueled. The growth of long-haul jets has made this activity diminish considerably, and Anchorage now joins the list of once important airports, such as Gander, Newfoundland, that have seen their relative locations change because of technological improvements. It should be noted, however, that Anchorage continues to fulﬁll its intermediacy role for air freight trafﬁc. Other examples include Chicago, the dominant US rail hub, that is not only a major market area in its own right (centrality) but also lies at the junction of the major eastern and western railroad networks. Ports too can exploit advantages of intermediate locations. The largest container port in the Mediterranean is Giaoa Tauro, located on the toe of Italy. A few years ago the port did not exist, but because of its location close to the main East–West shipping lanes through the Mediterranean it has been selected as a hub, where the large mother ships can transfer containers to smaller vessels for distribution to the established markets in the northern Mediterranean, a classic hub-and-spoke network.
Hinterland and foreland
One of the most enduring concepts in transport geography, especially applied to ports, is the hinterland. It refers to the market area of ports, the land areas from which the port draws and distributes trafﬁc. Two types of hinterland are sometimes noted. The term natural or primary hinterland refers to the market area for which the port is the closest terminal. It is assumed that this zone’s trafﬁc will normally pass through the port, because of proximity. The competitive hinterland is used to describe the market areas over which the port has to compete with other terminals for business (see Figure 5.6).
A D C
Figure 5.6 Port foreland and hinterland
The hinterland is a land space over which a transport terminal, such as a port, sells its services and interacts with its clients. It accounts for the regional market share that a terminal has relative to a set of other terminals servicing this region. It regroups all the customers directly bounded to the terminal. The terminal, depending on its nature, serves as a place of convergence for the trafﬁc coming by roads, railways or by sea/ﬂuvial feeders.
In recent years, the validity of the hinterland concept has been questioned, especially in the context of contemporary containerization (Slack, 1993). The mobility provided by the container has greatly facilitated market penetration, so that many ports compete over the same market areas for business. The notion of discrete hinterlands with well-deﬁned boundaries is questionable therefore. Nevertheless, the concept is still widely employed, and port authorities continue to emphasize their port’s centrality to hinterland areas in their promotional literature.
The term foreland is the oceanward mirror of hinterland, referring to the ports and overseas markets linked by shipping services from the port. It is above all a maritime space with which a port performs commercial relationships. It includes overseas customers with which the port undertakes commercial exchanges. The provision of services to a wide range of markets around the world is considered to be an advantage.
In academic studies there have been far fewer assessments of foreland than hinterland, yet in port publicity documents the foreland is usually one of the elements stressed. Geographers have long criticized the distinction, arguing that foreland and hinterland should be seen as a continuum, rather than separate and distinct elements. This point has achieved greater weight recently, with the emergence of door-to-door services and networks, where the port is seen as one link in through transport chains (Notteboom and Winkelmans, 2001; Robinson, 2002).
Concept 3 – Terminals and security
A new context in transport security
As locations where passengers and freight are assembled and dispersed, terminals have always been a focus of concern about security and safety. Because railway stations and airports are some of the most densely populated sites anywhere, crowd control and safety have been issues that have preoccupied managers for a long time. Access is monitored and controlled, and movements are channeled along pathways that provide
safe access to and from platforms and gates. In the freight industry, security concerns have been directed in two areas: worker safety and theft. Traditionally, freight terminals have been dangerous work places. With heavy goods being moved around yards and loaded onto vehicles using large mobile machines, accidents are systemic. Signiﬁcant improvements have been made over the years, through worker education and better organization of operations, but freight terminals are still comparatively hazardous. The issue of theft has been one of the most severe problems confronting all types of freight terminals, especially where high value goods are being handled. Docks, in particular, have been seen as places where organized crime has established control over local labor unions. Over the years access to freight terminals has been increasingly restricted, and the deployment of security personnel has helped control theft somewhat.
While issues of safety and security have concerned terminal planners and managers for many years, it is only recently that this has become an over-riding issue. Concerns were already being raised before the Millennium, but the tragic events of 9/11 thrust the issue of terminal security into the public domain as never before and set in motion responses that are reshaping transportation in unforeseen ways (Rodrigue and Slack,
Airports have been the focus of security concerns for many decades. Hijacking aircraft came to the fore in the 1970s, when terrorist groups in the Middle East exploited the lack of security to commandeer planes for ransom and publicity. Refugees ﬂeeing dictatorships also found taking over aircraft a possible route to freedom. In response, the airline industry and the international regulatory body, ICAO, established screening procedures for passengers and bags. This process seems to have worked in the short run at least, with reductions in hijackings, although terrorists changed their tactics by placing bombs in unaccompanied luggage and packages, as for example in the Air India crash off Ireland in 1985 and the Lockerbie, Scotland, crash of Pan Am 103 in 1988.
The growth in passenger trafﬁc and the development of hub-and-spoke networks placed a great deal of strain on the security process. There were wide disparities in the effectiveness of passenger screening at different airports, and because passengers were being routed by hubs, the numbers of passengers in transit through the hub airports grew signiﬁcantly. Concerns were being raised by some security experts, but the costs of improving screening and the need to process ever larger numbers of passengers and maintain ﬂight schedules caused most carriers to oppose tighter security measures.
The situation was changed irrevocably by the events of September 11, 2001. The US government created the Department of Homeland Security which in turn established a Transportation Security Authority to oversee the imposition of strict new security measures on the industry. Security involves many steps, from restricting access to airport facilities, fortifying cockpits, to the more extensive security screening of passengers. Screening now involves more rigorous inspections of passengers and their baggage at airports. For foreign nationals, inspection employs biometric identiﬁcation, which at present involves checking ﬁngerprints, but in the future may include retinal scans and facial pattern recognition. A new system, the Computer Assisted Passenger Prescreening System (CAPPS II), is proposed that will require more personal information from travelers when they book their ﬂights, which will lead to a risk assessment of each passenger. Passengers considered as high risk will be further screened.
The imposition of these measures has come at a considerable cost. In the USA alone, it is estimated that the expense of additional airport security is $6 billion. A signiﬁcant factor has been the integration of screeners into the federal workforce, with important
increases in salaries and training costs. The purchase of improved screening machines, and the redesigning of airport security procedures have been important cost additions. These measures have also had a major inﬂuence on passenger throughputs. Clearing security has become the most important source of delays in the passenger boarding process. Passengers are now expected to arrive 2 hours before departure at the terminal in order to clear security.
The security issues have had a very negative effect on the air transport industry. As reviewed above, not only have costs increased, but also delays and inconveniences to passengers have produced a downturn in demand. Coming on top of a slowdown in the business cycle after the stock market downturns in the ﬁrst decade of the new century, most airlines have suffered considerable ﬁnancial reversals, with many of the largest seeking court protection from bankruptcy. Business travel, the most lucrative sub- market for the airlines, has suffered a particularly sharp decline. Anecdotal evidence suggests that passengers are switching to other modes for shorter trips so as to avoid the time delays and aggravation caused by the security process.
Security in the freight industry has always been a major problem. Illegal immigrants, drug smuggling, piracy, and the deployment of sub-standard vessels have been some of the most important concerns. However, as in the air passenger business, the events of 9/11 highlighted a new set of security issues. The scale and scope of these problems in freight is of an even greater magnitude. The less regulated and greater international dimensions of the shipping industry, in particular, have made it a vulnerable target in an era of global terrorism. The number of ports, the vast ﬂeet of global shipping and the range of products carried in vessels, and the difﬁculty of detection has made the issue of security in shipping an extremely difﬁcult one to address. The container, which has greatly facilitated globalization, makes it extremely difﬁcult to identify illicit and/or dangerous cargoes. In the absence of scanners that can X-ray the entire box, manual inspection becomes a time consuming and virtually impossible task. Hubbing compounds the problem, as large numbers of containers are required to be handled with minimum delays and inconvenience.
In the USA, the response was to enact the Maritime Transportation and Security Act in 2002. The basic elements of this legislation were adopted by the International Maritime Organization (IMO) in December 2002 as the International Ship and Port Security code (ISPS). There are three important features of these interventions. First, is the requirement of an automated identity system (AIS) for all vessels between 300 and 50,000 dwt. AIS requires vessels to have a permanently marked and visible identity number, and there must be a record maintained of its ﬂag, port of registry and address of the registered owner. Second, each port must undertake a security assessment. This involves an assessment of its assets and facilities and of the effects of damage that might be caused. The port must then evaluate the risks, and identify weaknesses to its physical security, communication systems, utilities, etc. Third, is that all cargoes destined for the USA must receive customs clearance prior to the departure of the ship. In addition, it is proposed that biometric identiﬁcation for seafarers will be implemented and that national databases of sailors will be maintained.
The ISPS code is being implemented in ports around the world. Without certiﬁcation, a port would have difﬁculty in trading with the USA. Security is thus becoming a factor in a port’s competitiveness. The need to comply with ISPS has become an urgent issue in ports large and small around the world. The costs of securing sites, of undertaking risk assessments, and of monitoring ships all represent an additional cost of doing
business, without any commercial return. US ports have been able to tap funding from the Department of Homeland Security, but foreign ports have to comply or risk the loss of business. Security has become an additional element in determining competitive advantage.
Method 1 – The Gini coefﬁcient
The Gini coefﬁcient was developed to measure the degree of concentration (inequality) of a variable in a distribution of its elements. It compares the Lorenz curve of a ranked empirical distribution with the line of perfect equality. This line assumes that each element has the same contribution to the total summation of the values of a variable. The Gini coefﬁcient ranges between 0, where there is no concentration (perfect equality), and 1, where there is total concentration (perfect inequality).
Figure 5.7 is a graphical representation of the proportionality of a distribution (the cumulative percentage of the values). To build the Lorenz curve, all the elements of a distribution must be ordered, from the most important to the least important. Then, each element is plotted according to their cumulative percentage of X and Y, X being the cumulative percentage of elements. For instance, out of a distribution of 10 elements (N), the ﬁrst element would represent 10 percent of X and whatever percentage of Y it represents (this percentage must be the highest in the distribution). The second element would cumulatively represent 20 percent of X (its 10 percent plus the 10 percent of the ﬁrst element) and its percentage of Y plus the percentage of Y of the ﬁrst element.
The Lorenz curve is compared with the perfect equality line, which is a linear relationship that plots a distribution where each element has an equal value in its shares of X and Y. For instance, in a distribution of 10 elements, if there is perfect equality, the
5th element would have a cumulative percentage of 50 percent for X and Y. The perfect equality line forms an angle of 45 degrees with a slope of 100/N. The perfect inequality line represents a distribution where one element has the total cumulative percentage of Y while the others have none.
The Gini coefﬁcient is deﬁned graphically as a ratio of two surfaces involving the summation of all vertical deviations between the Lorenz curve and the perfect equality line (A) divided by the difference between the perfect equality and perfect inequality lines (A + B).
Perfect inequality line
Gini = A/(A+B)
Figure 5.7 The Lorenz curve
Cumulative % of X
No concentration Some concentration
A B C
Figure 5.8 Trafﬁc concentration and Lorenz curves
Figure 5.8 shows a simple system of ﬁve ports along a coast. In case A, the trafﬁc for each port is the same, so there is no concentration and thus no inequality. The Lorenz curve of this distribution is the same as the perfect equality line; they overlap. In case B, there is some concentration of the trafﬁc in two ports and this concentration is reﬂected in the Lorenz curve. Case C represents a high level of concentration in two ports and the Lorenz curve is signiﬁcantly different to the perfect equality line.
Calculating the Gini coefﬁcient (G)
The coefﬁcient represents the area of concentration between the Lorenz curve and the line of perfect equality as it expresses a proportion of the area enclosed by the triangle deﬁned by the line of perfect equality and the line of perfect inequality. The closer the coefﬁcient is to 1, the more unequal the distribution.
G =1−∑(σYi−1 + σYi )(σX i−1 − σX i )
Table 5.1 shows a hypothetical set of terminals with varying amounts of trafﬁc. X refers to the trafﬁc proportion if the trafﬁc was distributed evenly throughout all the terminals. Y refers to the actual proportion of trafﬁc at each terminal. σX and σY are cumulative percentages of Xs and Ys (in fractions) and N is the number of elements (observations).
The Gini coefﬁcient for this distribution is 0.427 (|1 – 1.427|).
Table 5.1 Calculating the Gini coefﬁcient
|Terminal||Trafﬁc||X||Y||σX||σY||σXi–1 – σXi (B)||σYi–1 + σYi (A)||A*B|
Geographers have used the Gini coefﬁcient in numerous instances, such as assessing income distribution among a set of contiguous regions (or countries) or to measure other spatial phenomena such as racial segregation and industrial location. Its major purpose as a method in transport geography has been related to measuring the concentration of trafﬁc, mainly at terminals, such as assessing changes in port system concentration. Economies of scale in transportation favor the concentration of trafﬁc at transport hubs, so the Gini coefﬁcient of maritime trafﬁc has tended to increase over recent decades, although perhaps not to the degree that has been expected (McCalla, 1999).
Method 2 – Delphi forecasting
Delphi forecasting is a non-quantitative technique for forecasting. Unlike many other methods that use so-called objective predictions involving quantitative analysis, the Delphi method is based on expert opinions. It has been demonstrated that predictions obtained in this way can be at least as accurate as other procedures. The essence of the procedure is to use the assessment of opinions and predictions by a number of experts over a number of rounds in carefully managed sequences.
One of the most important factors in Delphi forecasting is the selection of experts. The persons invited to participate must be knowledgeable about the issue, and represent a variety of backgrounds. The number must not be too small to make the assessment too narrowly based, nor too large to be difﬁcult to coordinate. It is widely considered that
10 to 15 experts can provide a good base for the forecast.
The procedure begins with the planner/researcher preparing a questionnaire about the issue at hand, its character, causes and future shape. These are distributed to the respondents separately who are asked to rate and respond. The results are then tabulated and the issues raised are identiﬁed.
The results are then returned to the experts in a second round. They are asked to rank or assess the factors, and justify why they made their choices. During a third or subsequent rounds their ratings along with the group averages, and lists of comments are provided, and the experts are asked to re-evaluate the factors. The rounds continue until an agreed level of consensus is reached. The literature suggests that by the third round a sufﬁcient consensus is usually obtained.
The procedure may take place in many ways. The ﬁrst step is usually undertaken by mail. After the initial results are obtained the subsequent round could be undertaken at a meeting of experts, assuming it would be possible to bring them together physically. Or, the subsequent rounds could be conducted again by mail. E-mail has greatly facilitated the procedure. The basic steps are as follows:
• Identiﬁcation of the problem. A researcher identiﬁes the problem for which some predictions are required, e.g. what is the trafﬁc of port X likely to be in 10 years time?
The researcher prepares documentation regarding past and present trafﬁc activity. A questionnaire is formulated concerning future trafﬁc estimates and factors that might inﬂuence such developments. A level of agreement between the responses is selected, e.g. if 80 percent of the experts can agree on a particular trafﬁc prediction.
• Selection of experts. In the case of a port scenario this might include terminal managers, shipping line representatives, land transport company representatives,
intermediaries such as freight forwarders, and academics. It is important to have a balance, so that no one group is overly represented.
• Administration of questionnaire. Experts are provided with background
documentation and the questionnaire. Responses are submitted to the researcher
within a narrow time frame.
• Researcher summarizes responses. Actual trafﬁc predictions are tabulated and
means and standard deviations calculated for each category of cargo as in the case of
a port trafﬁc prediction exercise. Key factors suggested by experts are compiled and listed.
• Feedback. The tabulations are returned to the experts, either by mail or in a meeting
convened to discuss ﬁrst round results. The advantage of a meeting is that participants
can confront each other to debate areas of disagreement over actual trafﬁc predictions or key factors identiﬁed. The drawback is that a few individuals might exert personal inﬂuence over the discussion and thereby sway outcomes, a trend that the researcher must be alert to and seek to mitigate. Experts are invited to review their original estimates and choices of key factors in light of the results presented, and submit a new round of predictions.
• These new predictions are tabulated and returned to the experts either by mail or
immediately to the meeting, if the level of agreement does not meet the pre-determined
level of acceptance. The speciﬁc areas of disagreement are highlighted, and the experts are again requested to consider their predictions in light of the panel’s overall views.
• The process is continued until the level of agreement has reached the pre-
determined value. If agreement is not possible after several rounds, the researcher
must terminate the process and try to pinpoint where the disagreements occur, and utilize the results to indicate speciﬁc problems in the trafﬁc prediction process in this case.
This method could be applied in a classroom setting, with students serving as “experts” for a particular case study. The trafﬁc at the local airport or port might be an appropriate example. On the basis of careful examination of trafﬁc trends and factors inﬂuencing business activity, the class could be consulted to come up with predictions that could then be compared with those of some alternative method such as trend extrapolation.
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