Transport Economics

ETE 311/E
Presented
By
Mr S Dlwangushe
INTRODUCTION TO TRANSPORT ECONOMICS
Transport is the movement of people and goods from
one location to another.

 There are three fundamental logistics questions that

are significant:
Where should people, goods or resources be moved
to, and by what mode and route and lastly when
should people, goods or resources be moved.
TRANSPORT FUNDAMENTALS
Transport involves significant elements:
 Equipment (trucks, pipeline, trains, aircrafts, boats)
 People (drivers, loaders & un-loaders) and
 Decision (equipment size, quantities, routing, transport mode and
timing).
 In developing countries its often found it necessary to locate
production close to both markets and resources, While in countries
with developed distribution systems people can live in places far from
production and resources.
TRANSPORTATION INDUSTRY STRUCTURE
RAILROAD TRANSPORT
• A system of tracks made with steel which trains carrying passenger or
freight often travel.
• Rail transport is capable of carrying a wide variety of products than
other modes.
• The custodian of rail transport in South Africa is Transnet which is one
of the SOEs.
• PRASA is in charge of rail network in South Africa.
• PRASA operates commuter rail services through Metrorail and it
operates in four regions namely: Gauteng, KZN, Western Cape and
Eastern Cape.
• In 2008 government decided that SARCC will run and operate long
distance passenger rail through Shosholoza Mely.
AIR TRANSPORT
• Air transport is the mobility of people and material by air. There are
several types of air transport e.g helicopter, private planes, commercial
planes etc.
• ACSA owns and operates South Africa’s nine principal airports including
three international airports.
• There are several other privately owned international airports in South
Africa, including Lanseria international and Nelspruit Airport/Kruger
Mpumalanga international.
• This mode of transport facilitates the integration into the global
economy and offers a significant connectivity on a regional, national and
international scale.
• Air transport has the following features: expensive, rapidity, special
preparation and unbroken journey.
SEA/OCEAN TRANSPORT
Sea transport is the movement of passengers and goods using vessels.
Transnet is responsible for all the operations at all 8 Ports in South
Africa and there are five divisions within transnet.
 Ocean transport connects the world via sea and all big economies rely
on sea transport to conduct their trade.
 This is most significant mode of transport and the shipping in the
whole world. Sea transport has been around for centuries helping both
individuals and businesses for travelling requirements.
 So this mode of transport is significant for global economy trade as
large quantities of products are transported via sea transport.
PIPELINE TRANSPORT
PIPELINE TRANSPORT
• It is the mode of transport that transport almost all of the natural gas and hazardous liquids
through pipes (including crude and refined petroleum).
• Pipeline transport is unique among modes of transport in that the pipe, which facilitates freight
movement, is both the way and the vehicle, and it is permanently connected to terminals, which
facilitate freight storage.
• This feature makes it the only mode of transport that does not require any materials or goods
handling.
• The infrastructure for pipeline transport is extremely capital intensive and that it has
unprecedented longevity, pipeline transport enjoys the highest level of economies of scale of all
modes of transport.
• It is also the only mode of freight transport of which the operations do not require a return
journey, whereby joint cost due to empty running is avoided.
• Transnet is responsible for pipeline infrastructure and they obtain permission from National
Energy Regulator of South Africa (NERSA) to construct infrastructure for the pipes between
Durban and Gauteng as well as Mpumalanga which connects Maputo and Nelspruit.
ROAD TRANSPORT
• Transportation of passengers and freight products on road.
• SANRAL is the custodian of all national road infrastructure from N1 to
N18.
• Road transport is used by both public and private transport.