Transport economics is one of the most interesting courses I underwent as a university undergraduate in the department of Transport Planning and Management. It is a comprehensive economic knowledge that focuses on efficient transport operation with less expenditure in order to strengthen the nation’s economy.
Transport history reveals that transport, as it were, is as old as the existence of man’s creation on earth. Then, the personal and biological responsibility of man to search for his needs, mostly his daily food, could not be fully realized without an element of transport for his mobility; and the only relevant means of transport then was walking. Till now, walking still remains an indispensable and unique means of mobility. Truly speaking, it is difficult, if not impossible, to see a man who would engage in any activity without walking or without the use of any transport element.
However, a report of the economic activities of any given country is not complete without notable reference to the impact of transportation on the nation at large. The various demands for transport and the supply of transport facilities or resources such as road transportation network, rail tracks, ports as well as vehicle and vessels to meet such demands play a notable part in building and strengthening both rural and urban economy. It is also a notable factor in the development of other resources. These explain the need for transport economics.
In addition, the activities through which goods and services are produced, sold and bought within and outside a country cannot be possible without the element of transportation. Transportation gives undeniable support to production and trade in any region of a nation; therefore, the significance of transport economics cannot be overlooked in building a nation’s economy.
What is Transport Economics?
In economics, there are various areas of knowledge developed to solve various economic problems in different disciplines with the main focus to strengthen the national economy. For better understanding, these developed areas of economic knowledge are worthy of mention, and they include Industrial Economics, Agricultural Economics, National Economic Planning, Public Finance Economics, International Economics, Behavioural Economics, Ecological Economics, Environmental Economics, Health Economics, Information Economics, Monetary Economics, Population Economics, Urban Economics, among others. However, the question still remains: What is Transport Economics?
Transportation is concerned with the movement of people, goods and services from one place to another; while economics on the other hand is concerned with resources allocation. Therefore, transport economics is concerned with the careful allotment and efficient use of transport resources to meet various specific transport demands in the society or within an organization.
Transport economics aims to find maximum-value-use and less expenditure of all transport resources and infrastructure such as roads, vehicles, rail tracks, vessels, ports, railway stations, rail yards, signal systems, ships, airports, traffic control systems, etc., to meet particular or various transport demands.
The transport sector is faced with various factors that could affect its growth such as congestion, competition, shortage and poor infrastructure, political barrier, to mention a few. Hence, the need to apply economics as an effective means to tackle the various factors that can inhibit the growth of the transport sector becomes inevitable.
In essence, transport economics is a mechanism or tool that can be used to ensure the efficient use of different modes of transport so as to have better advantage from transportation and to strengthen the economy of a nation at local, regional, national and international levels.
In the world today, the transport sector remains the largest employer of labour as well as the largest industrial sector in the world, yet there are various problems that the transport industries and the transport consumers encounter during transport operations such as: high cost of freight transportation, rise and fall of air transport fares, keen competition and struggle to survive among transport industries of the same mode, high cost of aircraft fuel, undue cargo delay at seaport, undue passenger queue and delay at airport, bus stop and train station, high cost of running transport industry, to mention but few. However, it is noteworthy that transport economics is that branch of economics that provides strategic solution to these problems.
In order to gain maximum benefits from the transport sector and its operations, transport economics provide optimal economic management techniques to transport operations, organizational decision making, freight and passenger transportation, scientific organization of labour and wages, economic methods for measuring expenditures and economic impact or results in transport operation, etc. to the operation of all transport modes. These include rail transport, air transport, maritime transport, river transport, road transport and pipelines transport.
Transport economics is the area of economic knowledge designed to improve transportation. Transport economics experts develop scientific transport recommendations that can be extensively used to solve important transport problems and also help to relieve the transport system or sector of excessive work with little impact.
Importance of Transport Economics and Skills
- Transport economics experts acquire the ability to collect, analyze, organize and critically evaluate information pertaining to the transport industry.
- Experts in transport economics also acquire the ability to identify and solve transport issues through creative thinking.
- Transport economics experts are trained to evaluate economic policies that affect the transport sector.
- Transport economics helps to understand political barriers that can inhibit transport operations.
- Transport economics also contribute to economic development of a nation through job creation.
- Transport economics makes economic activities possible through the efficient use of transport and also serves as a branch of economic knowledge to boost transport operations.
- Transport economics can be used to support full multimodal transport operations and to also enhance transport capital development projects such as ports, rail track network, railway stations, among others.
- Transport economics experts are equipped with training, skills and experience which enable them to identify the best measures to achieve certain transport goals or targets.
- Transport economics ensures that the comprehensive benefits of transport investment accrues to all transport users rather than only direct users which has been the common practice in some transport sectors with a limited focus that ignores many potential benefits for transport users or transport service consumers at large.
- It is important to stress that transport economics as a branch of knowledge in the field of economics is also designed to provide transport support to other economic branches of knowledge like Industrial Economics, Agricultural Economics, Health Economics, Labour Economics, etc. Hence the saying, ‘The thumb is a little finger that touches the other fingers’. Indeed, transport economics is a thumb that touches other areas of economic knowledge for efficiency.
- Transport economics unit in any organization may also be concerned with providing reliable measures supported by quality data gathered to provide a sound basis for decision-making.
- Transport economics unit can also undertake the task of combining and comparing results from different economic evaluation and estimation techniques so as to use as a tool for proper transport operation planning and management.
- Transport economics unit can be saddled with the responsibility of conducting economic analysis of transport impacts and cost benefits assessment from types of investments made on transportation as well as measuring the effects on transport users.
In conclusion, transport infrastructure and transport providers are two key important factors for the transport sector to function. However, due to the increase in demand for transport services, there is also an increase in problems associated with transport services such as congestion, pollution, road accident, rail collision, rail derailment, cargo delay, etc. Therefore, the need to understand and to satisfy the high demand for transport services while reducing the expenditures and its associated risks to the barest minimum makes transport economics to remain most crucial.