Logistics. Transport Economics and Its Politics

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Table of Contents

Introduction
Transport System in the United Kingdom
Government Policies
Economic Impact of Transportation
Issues and Challenges
Conclusion
References

Introduction

Transport economics is a branch of Economics that deals with resources distribution within a dynamic transport industry. This economic segment is often linked to some concepts of civil engineering. Most of the economic theories also apply in transport economics. But it assumes a different point of view wherein the economy is considered as indirect. There are several aspects that operate within transport economics. These include government policies and the economic forces within an economy. Transport economics also consider other economic entities such as the consumers and finance.

The emergence of transport economics is traced from the revolution of transportation systems. The growth of the transportation industry is also a major contributor to the emphasis on transport economics. As economies expand, transportation becomes a pressing necessity (Hibbs, 2003). Transport routes are needed to distribute goods and services. Moreover, transportation closes the gap between domestic and international locations. Transport systems provide order that is imperative in a state. These processes and mechanisms contribute in the overall development of countries.

The discussion on transport economics provides a wide scope. But there are vital elements that can be ascertained to arrive at a more comprehensive understanding. It is important to note that government participation in the transport system is a given circumstance. Moreover, the economic dynamics in the transportation industry also give interesting discussions. These two aspects will be applied in the current system being implemented in the United Kingdom.

Transport System in the United Kingdom

United Kingdom (UK) has one of the most advanced transport system. It houses road networks and rail networks that are the most advanced in the world. UK also has one of the busiest ports in Europe. In addition, the Heathrow Airport in London is the busiest in the world. The shift from public transport use to private transport use has been evident in UK. In 2003, it was recorded that 85% of passengers used cars and taxis whereas both rail and bus were used by 12% of total passengers. Long journeys are all covered by busses, both main and underground trains, and domestic airplanes (UK DT, 2007).

In 2004, the Department of Transportation has recorded almost 800 billion in passenger miles. This figure almost doubled the passenger miles recorded in 1970. The freight transport in UK has also undergone significant changes. The most common observation is that passengers have started to move from railroads to the streets. This illustrates the influx of private vehicles and taxis in the roads of UK. As of 2002, 62% of the total volume of freight was accounted to movement by road (UK DT, 2007).

The railway system in UK is composed of the networks that run through Britain and Northern Ireland (Wolmar, 2005). These two networks are operated independently. UK has also developed an underground railway which connects the country to mainland Europe. UK was also known to invent the rapid transit. This transport scheme is available in 3 UK cities. The most famous and used is located in London. There are also trams and light rail still operating. But these have been gradually replaced by private vehicles.

UK has an extensive road network, which covers nearly 400,000 miles (Porter and Bridle, 2002, pp.3). There are high-speed motorway systems, major motorways, and trunk roads. In UK, the Highways Agency is responsible for the maintenance of the roads. Local governments are also tasked to contribute to the development to road networks. There are road classifications that the government has established. This is done to identify roads that will likely have high vehicle volume. In Great Britain, the road numbering scheme is used. The system is used to provide more order in the entire transport system.

The geographic structure of UK suggests that port systems are needed. Most water freights are being handled by major ports in Felixstowe, Tilbury, and Southampton. Merchant marine is also one of the most important activities in UK ports. UK used to rank as the largest merchant marine fleet in the world. But UK still considers merchant marine as staple source of economic activities. Aside from the cargoes, the port is also open to passenger ferries. These ferries mostly come from France and Ireland. Further, water transportation inland is being supported by canals.

At present, there are 471 airports and 11 heliports that operate in UK. Among these airports, Heathrow in London is the biggest in busiest. The extent of passenger volume in this airport shows the demand for airlines (UK CAA, 2007). The Gatwick Airport and Manchester Airport also have significant records of passenger volume. Overall, the entire air transport system is considered as the busiest in Europe. The development of the air transport system is being supported by several big airline firms.

Government Policies

The role of the government in the transport system of UK is assumed by the Department of Transportation. The government is the key in ensuring that the system contributes to the development of the country. UK’s Central Government is focused on five main transport issues. These include environment, safety, economy, accessibility, and integration. In the fast, the UK government has cited poor infrastructure as the main reason for the transport system’s inefficiency. In addition, the government has failed to accurately monitor transport demand. The unpredictable rate of car usage also serves as a barrier for the government.

The issue of logistics has been a major concern for the government in relation to the transport system. The location of the transport networks is a possible area for improvement. Another crucial logistic concern involves integration of all transport modes. The government is also planning to balance the freight volume on the roads and on the railways (Boyer, 2005). This process involves efficiency in volume. The government has been working on a long-term strategy to modernise the transport networks.

Based on the Department of Transportations accounts, the government has allocated £60 billion to improve the rail system. The target is to increase the level of passengers to 50% (UK DT, 2007). A portion of the fund will also go to the promotion and luring of private capital. The UK government will also spend £59 billion for the road network. Half of this amount will go to the rehabilitation of roads. Other projects such as road widening are included in this fund. The other projects involve the improvement of seaports and airports.

Economic Impact of Transportation

The role of transportation in the economy is critical. It is an important segment that needs to be developed to ensure sustainable economic growth. UK recognises the impact of transportation in the economy (Cole, 2005). Transport systems are the primary arteries that distribute goods and services within the country. Goods coming overseas are also transported using all transport modes available in UK. Without an adequate transport system, several economic activities will be stalled. In addition, most investors consider the transport system as a primary necessity before proceeding with an investment.

The transport system contributes significantly to the income of the government. These contributions come in the form of taxes charged from vehicles. Quality transport systems can serve as drop point for foreign goods and services. This means tariffs and charges will go straight to the government’s pocket. The improvement of roads and railways also attract businesses. Such development can cause a domino effect which is wholly good for the economy. Improved transport systems also entice foreign tourists and domestic travel.

The improvement in the transport system of UK has led to the influx of several car manufacturers. Aside from the local car producers, foreign car firms have realised the strong demand for cars in UK. In addition, private cars have become a major necessity for some individuals. These elements combined with the increasing household income have made private cars viable alternatives. The increasing number of private cars, however, in the roads is affecting the energy supply as well as the environment (Quinet and Vickerman, 2005, pp. 5-40).

Issues and Challenges

There are several issues that need to be address in relation to the transport system in UK. But the most compelling concerns are linked to politics and economics. One of the major challenges in making policies is the worsening traffic. UK ranks are one of the worst countries when it comes to traffic. The influx of private cars in the streets is evident. The increasing need for private vehicles can be linked to this development. The number of private car owners in UK has increased exponentially. The government has to device a policy that will limit the supply of private cars in the market and on the roads.

Another pressing concern that the government must address pertains to the environment (Bannister, 1998, pp. 7-12). Vehicles have been viewed as the main cause of air pollution. The smoke emitted by cars and other transportations are harmful to the environment. In addition, excessive use of vehicles has affected the price of crude. It is imperative for the government to review its policies on gas emissions and fuel consumption. There suggestions made on the use of alternative sources of energy instead of the conventional fuel.

Policy making also concerns the logistics of the transport system. There have been moves to continuously integrate all transport systems in UK. The goal of the government is to lessen the vehicle requirement of passengers. Since transport systems are accessible, most passengers will prefer walking instead of riding another vehicle. Efficiency in the flow of transportation is important. It will reduce the volume of cars and decrease the fuel necessities of the vehicles. The location of all transport systems also needs to be evaluated.

The economic side of UK’s transport system also provides several challenges. The basic starts with supply and demand. In most instances, demand for vehicles outnumbers the supply of vehicles. Since UK is a progressive country, it expected that the volume of passengers increases sporadically. The influx of passengers in all transport schemes continues to increase (Small, et al. 1992, pp. 8-20). Another barrier that affects the supply and demand aspect is the control on entry of vehicles. UK needs to create economic measures to determine the equilibrium of vehicle supply and demand.

The provision of transportation wrests in the hands of both the public and the private sector. Economic policies on regulation of these vehicles will improve the transport system (Quinet and Vickerman, 2005, pp. 5-40). UK imposes quotas on the import of cars. It is being done to protect local car makers and also balance the price in the market. There is a trend in the car industry that needs to be supported by the government. Most car users prefer small cars to reduce energy consumption and improve driving. Small cars have to be promoted because this will eventually lessen the volume of the roads.

Project funding for the transport networks is a major challenge. The economic implication of inadequate infrastructures is evident (Hensher and Brewer, 2001). The government of UK has been supportive of the transport system modernisation. But the private sector has to be included in the equation. The presence of private firms will increase the financial resources of the government. Private firms can be allowed to totally build and manage transport networks. This will allow the government to save and earn through taxes.

Conclusion

Politics and economics are major contributor in the development of the transport system. UK recognises this reality and works rigorously to address all issues. But there are still major problems that need to be solved. Traffic has worsened over the years and has affected congestion. This will push away potential investors because congestion increases cost of business. The rise of vehicle frequency has also affected the environment negatively. The overuse of fuels will eventually create more social problems in the country. Perhaps emphasis on alternative energy needs to be pushed.

The increasing number of private cars in UK is a major concern. This has been identified as one of the primary causes of traffic. But the government can control this through effective regulation. The promotion of small cars is one and the improvement of public transportation can also help. The issue on logistics is also another important aspect that needs to be addressed. The integration of all transport networks is possible. This will allow more efficiency in terms of the volume of vehicles on the road.

Economic policies are important in supporting the transport system. For UK, its modernised transport networks significantly contribute to its economy. The influx of goods in the sea ports and tourists in airports also boost national income. But the government maintains the vitality of local transportation industry. Economic regulations especially in the limitation of foreign cars are critical. Moreover, the private sector needs to do its part. It has to serve as the support that the government needs to sustain the transport system in UK.

References

Bannister, D., (1998), Transport Policy and the Environment, London: Routledge, pp. 7-12.

Boyer, K., (1997), Principles of Transportation Economics, New York: Addison Wesley Publishing Company.

Cole, S., (2005), Applied Transport Economics: Policy Management and Decision-Making, London: Kogan Page.

Hensher, D. and Brewer, A., (2001), Transport: An Economics and Management Perspective, London: Oxford University Press.

Hibbs, J., (2003), Transport economics & policy: a practical analysis of performance, efficiency and marketing objectives, London: Kogan Page.

Porter, J. and Bridle, R., (2002), The Motorway Achievement, London: Thomas Telford, pp. 3.

Quinet, E. and Vickerman, R., (2005), Principles of Transport Economics, London: Edward Elgar Publications, pp. 5-40.

Small, K., et al., (1992), Urban Transportation Economics, Oxford: Oxford cc University Press, pp. 8-20.

Wolmar, C., (2005), On the Wrong Line: How Ideology and Incompetence Wrecked Britain’s Railway, London: Aurum Press.

Department of Transport (DT), (2007), Reports and Publications. Web.

United Kingdom Civil Aviation Authority (UK CAA), (2007), CAA Statistics 2006 – Size of UK Airports. Web.

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