ECONOMIC GEOGRAPHY: LECTURE 7
TRANSPORTATION:
The role of transportation is extremely significant to economic development and coordination of regional, national and global economies. To economists and geographers, transportation is the glue which connects production, consumption and distribution. Imagine how a company would feel if they knew where their market was located (say, rural young males between the age of 20-28), yet could not get the product to them in a timely fashion. This could happen in the United States, the quality and quantity of surface roads can be highly variable. Farmers may want to produce for the market also, yet if transportation facilities are not adequate then production will eventually return to a subsistence level or local orientation.
Modern transportation and communication have dramatically altered such connections. Examine any auto commercial on the television. I believe the Chevy van commercials or the Honda multi-purpose vehicle (Odyssey) commercials recently do not elaborate upon the vehicle fully, but do give reference to their websites. For a company, the web is an amazing tool, connecting interested buyers to the producers product without the company having to spend money and paper on flyers to promote a new vehicle (Honda/Chevy). You can even order a Saturn online and have it delivered to your house!!
Transportation and communication act to connect employees to jobs, retailers to the market and resources to production. Chapters four through seven in DeSouza and Stutz focus upon each aspect of the production system in an attempt to give you a view of how the linkages are formed. Focus upon the following concepts;
* transportation pricing policies can inhibit or encourage consumption and the mobility of production
* cities are market centers, located in population clusters with high disposable incomes
* locational pulls, such as suburbanization, can stimulate
movement of production,
capital,
and markets
* movement of economic activity is based upon access to:
1. transportation or
communication
2. capital
3. labor
4. market
* we use the number of miles of rail, highways, air
terminals as indicators of
development
similar to the use of income, jobs, GNP or GDP, and percentage urban.
1. Importance to economic development: Geographers often discuss the friction of distance to explain levels of uneven development across a county, country or the world. One way to define the friction of distance is that movement requires time. Physical barriers such as mountains, rivers, oceans often limit movement. But, thanks to improvements in transportation over time, our ability to overcome such impediments has improved, and the time it takes us to overcome space has been gradually reduced.
My ancestors were in the first wagon train to cross the Sonora Pass, and having spent much time near this region in the past two years, I wonder how they accomplished such a feat with heavy steel wagons. There is no clear path, a great many pine trees and glacial rocks exposures! Today, when you get into your car and drive over the Sonora Pass (although still closed for snow in the winter), it may take you only five minutes to accomplish what took them three to four weeks. This is what geographers mean by "reducing the friction of distance". New technologies, improved speed (TVG, Chunnel trains, bullet trains), and greater connections have reduced physical barriers to a minimal effect in most developed countries.
Yet, despite improvements in transport and communication in depressed regions, why hasn't economic activity drastically diffused (to these backwoods areas or less developed countries)? Some island and coastal states (Singapore, Hong Kong, Malaysia) have seen the benefits of transportation infrastructure, and have become locations of new industrialization (NICs). But, will all areas of the global see such development as interaction improves?
This is a question many geographers, economists and historians have examined for the last 200-300 years. Theories have evolved to explain pull factors for production; agricultural (Von Thunen), industrial (Weber); and consumption (Losch and Christaller).
In the following lectures for the second exam, I will focus upon basic explanation of the theories above. Although written during differing economic times, each theory has merit in explaining the mobility or static nature of transportation, production (agricultural or industrial), and consumption (capital and markets).
2 TRANSPORTATION THEORIES
A. Weber- Alfred Weber (published in 1909) is recognized as one of the predominant industrial geographers. He studied the locational factors (pulls) which determined where industry would locate within the United States (or within national boundaries). Weber located four dominant factors: raw materials, labor, transport and the market, and he found that industries were pulled to one of these four sites depending upon the type of good they produced (examined fully in Chapter 8). Due to the emphasis Weber placed upon business locating the LEAST COST OF PRODUCTION (location which provided cheapest cost to produce and therefore to consume), he recognized the importance of transportation in connecting industrial production with the market.
We gain the concept of TON-MILEAGE from Weber. All of you have been introduced to ton-mileage pricing either in transport (U-Haul) or postage (Fed Ex). According to Weber, transportation costs were a simple reflection of the weight of the item (TONs) and the distance it traveled (MILEAGE). Industrial activity would take place in areas which provided them with inexpensive transport costs, the site where the number of ton-miles was the least.
Weber also identified locations which enabled a change in the mode of transport (water, rail, truck) as a pull factor for industries with heavy goods or industries located far from the market. He termed these locations BREAK-IN-BULK LOCATIONS, explaining the significance of Chicago, San Francisco, even Tracy, where businesses can use a variety of transport modes to move their goods to the market. Important to Weber's ideas are the costs of transportation modes. Least expensive is pipeline or shipping, next is rail, then trucking, and lastly air travel. In terms of ton-mileage this is obvious. If you bought a new car from a German manufacturer in Munich, how would you ship it to the U.S.? If all transport is dominated by ton-mileage, the least cost choice would be by water to a local port, then rail to your town.
B. Von Thunen - Von Thunen created the dominant theory regarding agricultural production (see chapter 5). Writing in the 1840s, it is fairly amazing how useful his theory remains in terms of explaining crop selection and location in market economies. According to Von Thunen, distance from the market determined crop selection in commercial agriculture. Distance from the market determined the cost of transportation and location rent (cost of land vs. profit). Together, based upon the perishability of the crop, farmers would select what crops to produce. Close to the market, farmers would produce highly perishable goods (dairy, vegetables, fruits) and far from the market, farmers would produce less perishable goods (grains, livestock, nuts). Similarly, farming near the market would have to be more intensive and yield a higher profit due to the location rent.
Von Thunen demonstrated this pattern in concentric rings emanating from the market (urban clusters). This pattern, although not a perfect circle, is still evident today when you drive from the Bay Area south to Gilroy or east to the Central Valley. You will find flower farming still occurring along 237 and 880 (intensive, high-profit and perishable), market gardening in the Salinas "salad bowl" . A distance just far enough to reduce land costs to farmers, yet close enough to the market to produce perishable fruits and vegetables (many of which are organic). And as you travel south or east from the market (bay area), crops become less perishable (cattle, nuts, apples, grains) and land use becomes more extensive (range fed animals vs. feedlot farming near the city).
C. Christaller- Christaller examined transport as it pertained to the market and consumption. He argued that distance from the market also determined consumption. This concept is termed the market area today by economists. The real price of a good increased with increased distance to the market. Therefore, at some distance consumers would locate a substitute good or go without due to the cost of transportation.
You can see this today with the housing market spreading from the Bay Area. Many homes are being built along transport networks, making cities such as Livermore, Tracy, and even Patterson bedroom districts for Bay Area employees. The cheap cost of housing is the pull, but at some distance from the Bay, commuters demand for houses declines. The market area then is dependent upon the cost of transportation and the friction of distance.
If we opened up a high speed rail similar to the TVG from SF to Modesto, which would reduce the commute from two hours by car to one hour by rail, how would this effect the housing market in the Central Valley? Christaller was definitely onto something, and this is reflected in pricing policies of transportation.
3. Price structures: when discussing transport prices, geographers examine building costs and costs to consumers. The type of network which is built determines which factor (cost to build or cost to use) is more important. This can have a large impact upon diffusion of capital and development as seen within the United States.
a. construction costs:
* fixed
capital costs (land, leveling, rail) and are related to the length and terrain
covered by the
route
* variable or
operating costs which vary according to volume of traffic and address
maintenance of the
network including:
(i) terminal costs: handling, loading, billing, upkeep
(ii) line-haul costs: cost per mile
b. approaches to building:
* least cost to build:
this type of network reduces construction costs, usually located in
areas with
scattered population. American rail reflects this pattern in the west, where few
lines were built
to serve a dispersed population.
* least cost to user: this type of network provides a greater density of linkages than the least cost to build. This type of network is designed to maximize the benefit to the consumer, and provide better access to a clustered, dense population. American rail along the east coast reflects this pattern. High density rail linkages reduce the real cost of production by increasing the profit made by rail companies as a greater volume of ridership occurs.