Transportation

C

Terminal Management and Planning

Terminals are transportation centers where goods and people are transferred onto and off of vehicles. Terminals include ports, airports, bus stations, and train stations. The greatest amount of delay in a trip often occurs at a terminal, usually because of congestion or inadequate capacity. Equipment failures and bad weather also frequently contribute to delays. Proper management and operation of terminals is crucial in order to keep passengers, vehicles, and freight moving efficiently.

Three forms of terminal management are commonly found in the transportation industry: government, private sector, and special authority. In some cases, such as with airports, one can find all three management structures in place. Government agencies often operate important terminals, especially in countries other than the United States. Terminal operation is organized to provide such necessary services as customer ticketing, package handling, and parking and docking for automobiles, trucks, aircraft, or ships.

Privately run terminals, such as freight terminals run by railroads, have similar organizational structures to those of publicly operated terminals but generally focus on commercial operation and managing the arrival and desired departure times of cargo. For private terminals, turnaround or transfer time is directly related to how much profit is made.

The third form of terminal management is a hybrid of the previous two. Governments create special authorities, such as port authorities for managing harbor operations, to manage and operate transportation facilities and terminals. Although such authorities are accountable to the legislative body that created them, they often have a great deal of flexibility in operation and finance. For example, whereas government agencies are nonprofit, many special authorities earn profits that are reinvested in the transportation system.

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Planning for transportation facilities involves not only the government agencies responsible for transportation but also numerous users and stakeholders who depend on such service. The cost of airport expansion, for example, is often funded by increased landing fees charged to the airlines and ultimately to the traveler. Similarly, the costs of port improvements are often passed on to shipping companies and their customers. Thus, private companies are important participants in the planning and investment process for transportation improvements.

IV

Trade and Economics

Many transportation innovations occurred because of the needs of the military. Nevertheless, advances in vehicle designs and infrastructure (such as bridges and roads) were soon applied to trade and commerce. The Roman road system, originally created to move troops quickly and efficiently throughout the empire, soon created a massive economic market centered on Rome. The European explorers of the 15th and 16th centuries were originally seeking new paths to the riches of the Orient when they happened on the New World. The trillion-dollar international trade business of today relies entirely on a reliable system of global transportation to meet demand and provide customers all over the world with goods and services.

International trade routes connect different countries. These routes reflect the economic interdependence of many nations of the world. Many countries are dependent on other countries for natural resources, finished goods such as automobiles and electronics, and parts for products assembled locally. Many of the world’s largest trade partners, such as the United States, Canada, Japan, Mexico, and Europe, are connected with numerous transportation services and travel routes. In Asia, Japan has strong maritime trade relations with Southeast Asian countries in order to exchange natural resources for manufactured goods. The U.S. ports of New Orleans, Louisiana, and Miami, Florida, are major ports of entry for trade with Latin American nations.

Treaties and international agreements among countries are used to protect international shipping and travel. These agreements have related to issues such as vessel standardization, allowable ports of entry in a nation, customs procedures, tariffs that can be applied to certain commodities, and rights of passage through international waters. A recent example of such an agreement is the North American Free Trade Agreement (NAFTA), which was signed in 1992 by the governments of Canada, the United States, and Mexico. Among other actions, NAFTA eliminated many tariffs, allowed Mexican trucks to travel into the United States, provided safety and regulatory standards for trucks and buses, and permitted U.S. and Canadian investment on a limited basis in Mexican transportation firms. Similar trade agreements will continue to characterize international transportation.

Besides the economic benefits associated with trade, there are many other indirect economic benefits related to transportation. More than 9.5 million workers are employed in transportation-related industries in the United States, and the transportation-related portion of the U.S. gross domestic product (GDP) in 2000 was $314 billion out of a total GDP of $9.9 trillion. Aerospace, naval, and automobile manufacturers are responsible for a large amount of that figure, as are the industries that supply these manufacturers, such as the steel, rubber, petroleum, and electronics industries.

V

Government Regulation and Administration

The national government takes an active role in supervising a nation’s transportation systems. Transportation departments or ministries manage the planning, construction, funding, and regulation of these systems. Such government agencies study transportation needs and allocate resources in order to maintain the existing transportation systems and to anticipate future needs. The United States has an extensive system of government regulation, but, in contrast to what happens in other countries, most U.S. transportation services are privately owned and operated.

A

Regulation in the United States

In the United States the federal government’s role in transportation is defined in the Constitution and in laws and court cases that have clarified and interpreted this role. The federal government regulates many important aspects of transportation, including transportation system planning, market competition, and vehicle design and safety. The government enacts laws that are intended to provide fair and competitive markets for transportation users and provides funding for construction of transportation projects. The U.S. Department of Transportation, an agency that is part of the president’s Cabinet, is responsible for the nation’s transportation system. Every state also has a department of transportation (DOT), and every county and city also has some organization with responsibility for local transportation.

The federal government allocates billions of dollars for transportation and raises that money in a variety of ways. In 2000 about $119 billion was spent by all levels of government in the United States just on road construction and maintenance. Over $7 billion was spent on public transportation. From 1982 to 1998 the federal government spent more than $38 billion for the construction and operation of airports. From 1945 to 1998 public agencies spent over $15 billion improving harbors and ports. The revenues to fund these expenditures come from three major sources: income, property, and sales taxes; special user taxes such as the gasoline tax and the airport use tax (the revenues from which are placed in trust funds to be used for specific transportation investment purposes); and user fees such as road and bridge tolls. Since the 1950s, user taxes have been the most important means of financing major highways, but costs are often greater than available funds. The gap between revenues and expenditures has been filled in two ways. One method has been to directly subsidize a given transportation program. The second has been to privatize services traditionally provided by government. Privatization can take several forms, from private operators providing transit services to private sources of funds being used to construct toll roads.

The planning and construction of state transportation systems is the responsibility of the state DOTs, and the planning for metropolitan transportation systems is the responsibility of metropolitan planning organizations. By federal law, every state and metropolitan area in the United States must have a transportation plan. The actual construction of transportation facilities is done through contracts with private construction companies.

Although much of the U.S. transportation system is operated by private interests, in some special cases government agencies operate or provide overall control of transportation systems. Urban transit services in the United States first started as private businesses, but as a result of serious financial problems in the face of competition, most services today are operated by public agencies. Government agencies also provide traffic control for some transportation systems. The Federal Aviation Administration (FAA) provides two types of air traffic control services. The agency operates air traffic control towers at 545 airports, providing instructions for landing and departing aircraft. It also operates 21 air route traffic control centers throughout the country that guide aircraft along flight routes.

Many government agencies play important roles in regulating the safety and environmental aspects of motor vehicles. The U.S. Environmental Protection Agency (EPA) regulates the permissible levels of pollutants that may be emitted from motor vehicles. Other agencies regulate safety and fuel efficiency requirements. The federal and state governments provide traffic control rules and regulations that dictate how motor vehicles are to be operated, and the federal government issues manuals and guidance that assure uniformity in the use of traffic control devices from one state to another. Various other agencies regulate rail, air, and maritime transportation.

B

Regulation in Other Countries

The role of government in transportation varies from country to country depending on local tradition and legal precedent. One of the biggest differences between the United States and other countries is the role of the private sector in the operation of transportation services. Federal, state, and local governments have a significant role in the U.S. transportation system, and businesses in the private sector generally maintain the provision of service and the use of that system. Private firms own and operate the railroads, airlines, water transportation companies, pipeline operators, and motor carriers. In most other countries, such as the countries of Europe and Asia, the major transportation service providers are often state-owned. In many countries where the transportation system was developed under colonial rule, the country’s independence was accompanied by the nationalization of the railroads and airlines. The governments of these countries have provided heavy subsidies to their transportation services. Many of these governments are now experimenting with privatizing these services in order to reduce costs.