Introduction to Transport Economics

Logistics News received a request from a reader that we should review a book on transport economics. I started looking for a suitable title and must admit that I was slightly disappointed to see relatively few text books on the topic. However, I found this book and gladly share my opinion with you.

David Spurling seems to be a seasoned specialist with many years’ experience in the transport industry in British Rail, the UK Ministry of Transport as well as teaching at Birmingham City University. The objective of the book is to teach students and practitioners how to apply economic principles to transport. Unfortunately the examples and case references are almost exclusively UK based and it could be difficult to relate to the cases if one is not familiar with the UK transport industry and their transport legislation. This is a typical challenge with text books written in and for the UK rather than for the international market.

The material covers various topics in 25 chapters with self-examination questions at the end of each chapter and 12 essay-type questions with answers at the end. The content of most chapters addresses both freight and passenger transport which, in my opinion, is not very successful. In fact, it might make much more sense to have separate chapters on freight and passenger; if not separate books. There is just too little in common between freight and passenger transport economics.

The book starts with an introduction on the importance of transport economics and explains that transport is a derived demand. This implies transport is not the objective, but the means of fulfilling the demand, derived from the need for goods at the right time at the right place. The second chapter covers the demand for passenger transport and explains elastic demand versus inelastic demand. This is one of the few places where a graph is used to explain the relationship between cost and quantity. The third chapter deals with the demand for freight transport with specific reference to supply and demand. It is interesting to note that the term ‘logistics’ is never used in the book.

Chapter 4 covers cost structures such as fixed costs, variable costs, fares and other financial matters such as wages and bonus. This chapter also has a few graphs. The next chapter includes forms of competition such as oligopoly, monopoly and hybrid models. Chapter 6 deals with pricing policy and explains different types of pricing such as flat rate, peak and off peak fares and marginal cost pricing.

The next part covers road passenger transport, buses, coaches and taxis with specific reference to staffing, bus lanes, size and type of buses, trolleybuses and metered taxis. Chapter 9 is called ‘The Way’ and includes railways, air transport, canals, ports, roads and pedestrian traffic, but all in just a few paragraphs on each. This is followed with a chapter on shipping, ports and inland waterways. The type and size of vessels are discussed and some mention made of registering the vessels in countries of convenience (an affordable pricing) rather than their own flags.

Chapter 11 discusses airports in terms of design capacity, location, parking, noise and legislation. There is much debate in the UK on the need for further expansion of Heathrow and the author covers the benefits  and disadvantages in some detail. Aviation is the topic of the next chapter where size and types of aircraft as well as international legislation are discussed. The following chapters deal with safety in transport, co-ordination of transport, the public sector and then a chapter on cost-benefit analysis. Local authorities and transport receives attention as well as measures of efficiency and transport investment.

The last part of the book covers economies of scale, problems of the peak and how to implement and manage congestion charging. Rural transport and international transport are addressed and then a chapter on transport in developing countries. The last chapter addresses the future of road transport by mode and the author highlights alternative fuels, smart cards, driverless cars and cycling. Rail transport looks at electrification and high speed rail as well as double deck trains.

The book includes a very useful glossary of transport economics terms with proper descriptions and not cryptic explanations. This differentiates the book as a very useful source of information for terminology in the transport industry. The content is tightly packed with almost no diagrams or pictures, and pages of text that address every possible concept in transport and transport economics.

The book reads quite easily except the chapter on transport investment where the author covers different investment appraisal methods such as discounted cash flow, net present value and internal rate of return. The formulae are given in mathematical notation with little explanation, which might make it difficult for the average reader to follow.

In conclusion, I think the author succeeded in covering a very wide area of transport economics concepts in freight and passenger transport in all modes but in the process, he lost some focus. It might help to structure the contents of each chapter with numbering that can provide a storyline, rather than a collection of different topics that are mentioned almost in isolation. As mentioned earlier, the author should consider separating freight and passenger transport economics rather than trying to combine both in all chapters. ‘Introduction to Transport Economics’ will be useful as a reference for terminology and concepts on a very high level but with very little detail and substance.

The book will probably not make the top ten in my collection, but in the absence of more titles in transport economics in general and in South Africa in particular, it will add value.

Written by: David J Spurling Publisher: Universal-Publishers ISBN: 978-1-59942-898-7 Pages: 451

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