Transport economics Why is transport important?
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- The demand for transport “Transport is not an end in itself. Its purpose is to move people or goods from place to place.” The demand for transport is derived
| Rail Transport
In 1825 the worlds first commercial railway service was opened in Britain, the Stockton and Darlington railway. From 1950 to 1991 there was a continuous decline in the use of railways by both passengers and freight, most of it transferring to road transport. Since 1991 demand has been stable, but the market share of rail has fallen to 5%. In 1843 there were nearly 10,000 miles of track, this rose to 23,000 miles in 1910. Under nationalized control the amount of track and stations was greatly reduced, reducing to 15,000 miles by 1960 and the service is now based on main line, major routes with just 10,000 miles of track once again. The freight carried by the railways is dominated by bulk commodities, such as coal, coke, iron and steel, building materials and petroleum. Bulk commodities account for 90% of rail freight. The government offers subsidies to encourage firms to move commodities by rail rather than road. There has been a move back to the railways since privatization where the number of passengers has risen by 50%. The system has struggled to cope with the increased demands, a blow to those who saw greater rail use as a solution to road congestion. Water Inland waterways are almost all only used for recreation in the UK, but in the EU they are used extensively for freight. The rivers Thames, Forth, Humber and Mersey and the Manchester Ship Canal are the only ones to carry significant amounts of freight. Sea transport is very important for the UK. 94% by weight and 76% by value of Britain's overseas trade is carried out by sea. The rise in the general level of trade as a percentage of GDP means that ports and sea transport will become increasingly important to the UK economy. You will see that water transport has increased significantly in the UK since the early 1970’s. This is accounted for by North Sea Oil and does not reflect a general change in transport use patterns generally. The demand for transport “Transport is not an end in itself. Its purpose is to move people or goods from place to place.” The demand for transport is derived from the demand to transfer passengers and freight from one place to another. This is like the demand for labour in the sense that labour is derived from the demand for the goods and services it produces. The concept of derived demand is an important one. A person going to work demands transport because they wish to earn a wage, not because they enjoy the bus ride or drive. A firm of hauliers moves a fridge from Methyr Tydfill to Milton Keynes because someone in Milton Keynes demands a fridge, not because the fridge wanted a ride in a lorry. Transport is an intermediate good in most cases as it is part of the productive process, rather than demanded for its own sake. As such the demand for transport will vary with the level of national income. As employment rises the demand for travel to work will increase, the demand for goods will increase and the demand for leisure activities will also rise (most of which entail travel). The exceptions to this are to be found in areas such as the demand for rail services from train spotters. The demand for transport takes place over space and time, it is for journeys between two points over a particular distance and take a particular amount of time. However this demand is not evenly spread over the network or time and the result is peaking. Often expectations of time are false. Factors determining the demand for transport2 Each mode of transport has its own characteristics that make it suitable for particular uses. The table below sets out the main ones for both passengers and freight. It is possible to identify a number of factors that determine the demand for the mode of transport used. 
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