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Lecture Outline

1. Rail Transportation: transportation network, its structure, regional distribution. Key transport connections, nodes.

2. Road Transportation: state of the road transport system regarding regional development. Transport corridors, transportation nodes.

3. Maritime and fluvial transportation: structure and distribution of maritime transportation over industries. Major maritime ways and ports, their classification and distribution over regions, relations.

4. Air transportation: global structure and distribution of the air transportation network. Hubs of global importance.

5. Pipeline transportation: pipelines of global importance, their function and classification.

References:[1], [2], [4], [5], [6], [8], [12].

Although primitive rail systems existed by the 17th century to move materials in quarries and mines, it is not until the early 19th century that the first real rail transportation systems came into existence. Rail transportation has been the product of the industrial era, playing a major role in the economic development of Western Europe, North America and Japan. It represented a major improvement in land transport technology and has obviously introduced important changes in the movement of freight and passengers. This was not necessarily because of heavy loads, since maritime transportation excelled at doing so, but because of the time element. Rail transport systems dramatically improved travel time as well as the possibility to offer reliable schedules that could be included in the planning of economic activities such as production and distribution. The coherence of economic activities and social interactions was thus substantially improved.

With the introduction of the steam locomotive in 1829, a mechanized land transport system became available for the first time. According to the geographical settings, rail lines were established differently because of the variety of strategies to be achieved, namely access to resources, servicing regional economies and to achieve territorial control. The first railway companies were mainly point to point ventures with the company often taking the name of the serviced destinations. As the rail system expanded, several mergers took place, which lead to rather peculiar semantic results.

Rail transportation is characterized by a high level of economic and territorial control since most rail companies are operating in situation of monopoly, as in Europe, or oligopoly, as in North America. The United States has seven large rail freight carriers, each having a market area. Operating a rail system involves using regular (scheduled), but rigid, services. Rail transportation, like roads, has an important relationship with space, since it is the transport mode the most constrained by the physiography. These constraints are mainly technical and involve issues such as:

1. Space consumption. Rail transportation has a low level of space consumption along lines, but its terminals are important consumers of space, especially in urban areas. This increases operation costs substantially.

2. Gradient and turns. Rail transportation can support a gradient of up to 4% (e.g. 40 meters per kilometer), but freight trains rarely tolerate more than 1%. This implies that an operational freight rail line requires 50 kilometers to climb 500 meters. For turns, the minimal curvature radius is 100 meters, but radiuses of 1 km for a speed of 150 km/hr and 4 km for a speed of 300 km/hr are needed.

3. Vehicles. Rail transportation is very flexible in terms of vehicles and there is a wide variety of them filling different purposes. The locomotion technology ranges from steam, to diesel (mainly for freight in the United States) and electric (mainly for passengers in Europe). The recent trend has been a specialization of freight wagons, such as hopper wagons (grain, potash and fertilizers), triple hopper wagons (sand, gravel, sulfur and coal), flat wagons (wood, agricultural equipment, manufactured goods, containers), tanker wagons (petrochemical products), box wagons (livestock, paper, manufactured goods), car wagons and passengers wagons.

4. Gauge. The standard gauge of 1.4351 meters has been adopted in many parts of the world, across North America and most of Western Europe for example. But other gauges have been adopted in other areas, such as the broad gauge (1.520 meters) in China. This makes integration of rail services very difficult, since both freight and passengers are required to change from one railway system to the other. As attempts are being made to extend rail services across continents and regions, this is an important obstacle, as for example between France and Spain, Eastern and Western Europe, and between Russia and China. The potential of the Eurasian land bridge is limited in part by these gauge differences.

Other factors that inhibit the movement of trains between different countries include signaling and electrification standards. These are particular problems for the European Union where the lack of "interoperability" of the rail systems between the member states is a factor limiting the wider use of the rail mode.

It is often possible to combine rail transportation with road transportation, simply by carrying trailers. Overall, rail transportation is more efficient than road transportation, although its main drawback is flexibility as traffic must follow fixed routes and transshipment must be done at terminals.

The ability of trains to haul large quantities of goods and significant numbers of people over long distances is the mode’s primary asset. Once the cars have been assembled or the passengers have boarded, trains can offer a high capacity service at a reasonable speed. It was this feature that led to the train’s pre-eminence in opening the interior of the continents in the 19th century, and is still its major asset. Passenger service is effective where population densities are high. Freight traffic is dominated by bulk cargo shipments, agricultural and industrial raw materials in particular. Rail transport is a “green” system, in that its consumption of energy per unit load per km is lower than road modes.

The initial capital costs are high because the construction of rail tracks and the provision of rolling stock are expensive. Historically, the investments have been made by the same source (either governments or the private sector). These expenditures have to be made before any revenues are realized and thus represent important entry barriers that tend to limit the number of operators. It also serves to delay innovation, compared with road transport, since rail rolling stock has a service life of at least twenty years. This can be an advantage since the rolling stock is more durable and offer better opportunities at amortization. On average, rail companies need to invest about 45% of their operating revenues each year in capital and maintenance expenses of their infrastructure and equipment.

Since the end of the 1950s, railway systems in advanced economies have faced an increasing competition from road transport, with varying results. In several countries such as China, India, and Japan, rail transportation accounts for the majority of interurban passenger transportation. Among developed countries, there are geographical differences in the economic preference of rail transportation. For Europe, rail transportation is still very important, mainly for passenger transportation, but has declined over the last decades. High-speed passenger rail projects are however improving its popularity. For North America, rail transportation is strictly related to freight, with passengers playing a marginal role only along major urban corridors. This as reached a point where passenger trains are getting increasingly delayed because priority is given to freight. It is only in the northeastern part of the United States that passenger services are running on time since Amtrak (the federally owned passenger rail operator) owns the tracks.

Even if rail transportation was primarily developed to service national economies, globalization is having significant impacts on rail freight systems. These impacts are scale specific:

1. At the macro scale, new long distance alternatives are emerging in the form of land bridges in North America and between Europe and Asia. In North America, rail has been very successful at servicing long distance intermodal markets, underlining the efficiency of rail over long distance and high volume flows.

2. At the meso scale, the railway transportation network is influenced by the pattern of energy consumption. Many countries still rely overwhelmingly on foreign suppliers for their source of fuel. Countries still build major fuel moving transport arteries. Another important trend has been the growing integration of rail and maritime transport systems. Rail transportation has thus become the extension of maritime supply chains. A key issue is the concentration of investments in shaping rail corridors.

3. At the micro scale, recent tendencies notably in extended metropolitan regions reveals a specialization of rail traffic as well as a transfer of certain types of commodities from the rail network to the fluvial and road network systems. Railways servicing ports tend more and more to concentrate on the movement of container traffic. This strategy followed by rail transport operators allows on the one hand, an increase in the delivery of goods and on the other hand, the establishment of door-to-door services through a better distribution of goods among different transport modes.

Rail transport has been affected by continuous innovations, technical and commercial changes. Increasing electrification and automation will also improve the efficiency of rail transportation, passenger and freight alike. A few new rail lines are being built, but mainly in developing countries. Railway speed records have constantly improved. For instance, portions of the French high speed rail system (also known as TGV: Tres Grande Vitesse) can reach speeds up to 515 km/hr. Variable wheel-base axles permit rail transport between different gauges. However, freight trains run at a considerably lower speed, in the range of 30-35 km/hr. In some cases, as the rail system gets more used, operational speed may decline.

Longer and heavier rail coupled with major engineering feats allow the suppression of natural obstacles, which enhance network continuity. The Seikan tunnel between the islands of Honshu and Hokkaido in Japan has a length of 53.8 kilometers while the Channel tunnel between France and England reaches 50.5 kilometers. One of the most technically challenging rail segment ever built was completed in 2006 in China. The 1,142 kilometers line links Golmud in Qinghai province to Lhasa in Tibet. Some parts go through permafrost and altitudes of 16,000 feet, conferring its status of the world's highest rail line. Rail transport has comparative advantages in carrying heavy bulk traffic on specific itineraries over long distances. For instance, a 10 car freight train can carry as much cargo as 600 trucks. Beside its emphasis on safety and reliability, rail transport favors the fast commuting of suburbanites during peak hours and has become an important mode supporting passenger movements in large cities.

The global trend involves the closure of unprofitable lines as well as the elimination of several stops. Over the last 50 years, with downsizing of rail transportation, while traffic was moving to other modes, rail companies abandoned lines (or sold them to local rail companies), removed excess terminals and warehousing capacity and sold off property. The process of rationalization (deregulation) of the rail network is now completed in a number of countries, such as in the United States. This has implied significant labor savings with the reduction of train crews (from 3-4 to 2), more flexible working hours and the usage of subcontractors for construction and maintenance. In addition to energy efficient (the fuel efficiency of locomotives has increased by 68% between 1980 and 2000) and lighter equipment, the usage of double-stack cars has revolutionized rail transportation with additional fuel efficiency and cost reductions of 40%. Unit trains, carrying one commodity-type only, allow scale economies and efficiencies in bulk shipments, and double stacking has greatly promoted the advantages of rail for container shipments. Rail transport is also enjoying a resurgence as a mode for commuters in many large cities.

Trends concerning cargo transport using trailers on flat cars (TOFC) and containers on flat cars (COFC) well illustrate the increasing adoption of intermodal transport. Due to its great versatility, the container is highly favored as such a means of cargo transport.

The emergence of high-speed rail networks and increasing rail speed had significant impacts on passengers transportation, especially in Europe and Japan . For instance, the French TGV has an operational speed of about 300 km/h. High-speed passenger trains require special lines, but can also use the existing lines at a lower speed. In many cases it permitted a separation between rail passenger traffic rolling at high speed and freight traffic using the conventional rail network. The efficiency of both the passengers and freight rail network is thus improved significantly. Since high-speed trains require some time to accelerate and decelerate, the average distance between stations has increased significantly, by-passing several centers of less importance. Over average distances, they have proved to be able to compete effectively with air transportation.

Road transport

Two major modes are composing the land transport system, roads and railways. Obviously, roads were established first, as rail technology only became available by the 18th century, in the midst on the industrial revolution. Historical considerations are important in assessing the structure of current land transportation networks. Modern roads tend to follow the structure established by previous roads, as it was the case for the modern European road network (especially in Italy, France and Britain) that follows the structure established by the Roman road network centuries before.

The first land roads took their origins from trails which were generally used to move from one hunting territory to another. With the emergence of the first forms of nation-states trails started to be used for commercial purposes as trade expanded and some became roads, especially through the domestification of animals such as horses, mules and camels. The use of wheeled vehicles encouraged construction of better roads. However, a road transport system requires a level of labor organization and administrative control that could only be provided by a form of governmental oversight offering some military protection over trade routes. By 3,000 BC the first road systems appeared in Mesopotamia and asphalt was used to pave roads in Babylon by 625 BC. The Persian Empire had a road of 2,300 km in the 5th century BC. However, the first major road system was established by the Roman Empire from 300 BC and onwards, mainly for economic, military and administrative reasons. It relied on solid road engineering methods, including the laying of foundations and the construction of bridges. This was also linked with the establishment of pan-continental trading routes, such as the Silk Road, linking Europe and Asia by 100 BC.

Following the fall of the Roman Empire in the 5th century, integrated road transportation fell out of favor as most roads were locally constructed and maintained. Because of the lack of maintenance of many road segments, land transport became a very hazardous activity. It is not until the creation of modern nation-states in the 17th century that national road transportation systems were formally established. The French, through central government efforts, build their Royal Roads system spanning 24,000 km, over which a public transport service of stage-coaches carrying passengers and mail was established. The British, mainly through private efforts, built a 32,000 km system of turnpikes where tolls have to be paid for road usage. A similar initiative was undertaken in the United States in the 19th century and by the early 20th century, a network of 3 million km of roads, most unpaved, was in operation. 1794 marks the beginning of modern road transportation with the first mail coach service between London and Bristol, operating under a timetable.

Also of high significance were technological innovations in road engineering that permitted the construction of reliable and low cost hard surface roads. One such achievement came from the Scottish engineer McAdam who developed a process (later known as macadam) where hard and waterproof road surfaces were made by cemented crushed stone, bound together either with water or with bitumen. It provided a cheaper, durable, smooth and non-slippery pavement, which considerably improved the reliability and the travel speed on roads. Many roads could now be used year round.

Road development accelerated in the first half of the 20th century. By the 1920s, the first all-weather transcontinental highway, the Lincoln Highway, spanned over 5,300 km between New York and San Francisco. The Germans were however the first to build the modern highway (autobahn) in 1932 with specifications such as restricted access, overpasses and road separation that would eventually become common characteristics of highway systems. The post World War Two era represented a period of rapid expansion of road transportation networks worldwide. The most remarkable achievement is without doubt the American Interstate highway system initiated in 1956. Its strategic purpose was to provide a national road system servicing the American economy and also able to support troop movements and act as air strips in case of an emergency. About 56,000 km was built from the 1950s to the 1970s, but between 1975 and 1998 only 9,000 km were added to the system, underlining growing construction costs and diminishing returns. Overall, about 70,000 km of four-lane and six-lane highways were constructed, linking all major American cities, coast to coast. A similar project took place in Canada with the Trans-Canada highway completed in 1962. By the 1970s, every modern nation has constructed a national highway system, which in the case of Western Europe resulted in a pan-European system. This trend now takes place in many industrializing countries. For instance, China is building a national highway system that expanded to 25,000 km in 2005, with construction taking place at a pace of about 2,000 km per year.

Road transportation is the mode that has expanded the most over the last 50 years, both for passengers and freight transportation. Such growth in road freight transport has been fuelled largely by trade liberalization as modal shares of trade between the United States and its NAFTA partners suggest. This is the result of growth of the loading capacity of vehicle and an adaptation of vehicle to freight (e.g. perishables, fuel, construction materials, etc) or passengers (e.g. school bus) demand for speed, autonomy and flexibility. New types of problems, such as a significant growth of fuel consumption, increasing environmental externalities, traffic congestion and a multiplication of road accidents have also emerged.

All road transport modes have limited potential to achieve economies of scale. This is due to size and weight constraints imposed by governments and also by the technical and economic limits of engines. In most jurisdictions, trucks and busses have specific weight and length restrictions which are imposed for safety reasons. In addition, there are serious limits on the traction capacities of cars, buses and trucks because of the considerable increases in energy consumption that accompany increases in the vehicle weight. For these reasons the carrying capacities of individual road vehicles are limited.

Road transportation is characterized by acute geographical disparities in traffic. It is not uncommon that 20% of the road network supports 60 to 80% of the traffic. This observation is expanded by the fact that developed and developing countries have important differences in terms of the density, capacity and the quality of road transport infrastructures. Acute geographical variations of the inventory are therefore the norm.

Technological evolution of road transport vehicles was a continuous trend since the construction of the first automobiles. The basic technology is however very similar, as road transportation massively relies on the internal combustion engine. In the future new materials (ceramic, plastic, aluminum, composite materials etc.), fuels (electricity, hydrogen, natural gas, etc.) and computerization (vehicle control, location, navigation and toll collection) are expected to be included in cars and improve the efficiency of road transport systems.

The urban population has increased considerably over the last 50 years and about 50% of the global population was urbanized by 2000 (about 3 billion people). It is impossible for developing countries to have a rates (register) of individual vehicle ownership similar to those of developed countries, especially compared with the United States. This will impose new or alternative methods to transport freight and passengers over roads in urban areas. The reduction of vehicle emissions and the impacts of infrastructures on the environment are mandatory to promote a sustainable environment. Under such circumstances cycling is thus to be considered an alternative to the automobile in urban areas, widely adopted in developing countries, although more for economic reasons. A symbiosis between types of roads and types of traffic with specialization (reserved lanes and hours) is to be expected.

Road transport, however, possesses significant advantages over other modes. The capital cost of vehicles is relatively small. This produces several key characteristics of road transport. Low vehicle costs make it comparatively easy for new users to gain entry, which helps ensure that the trucking industry, for example, is highly competitive. Low capital costs also ensure that innovations and new technologies can diffuse quickly through the industry. Another advantage of road transport is the high relative speed of vehicles, the major constraint being government-imposed speed limits. One of its most important attributes is the flexibility of route choice, once a network of roads is provided. Road transport has the unique opportunity of providing door to door service for both passengers and freight. These multiple advantages have made cars and trucks the modes of choice for a great number of trip purposes, and have led to the market dominance of cars and trucks for short distance trips.

Maritime and fluvial transport

From its modest origins as Egyptian coastal sailships around 3,200 BC, maritime transportation has always been the dominant support of global trade. By 1,200 BC Egyptian ships traded as far as Sumatra, representing one of the longest maritime route of that time. With the development of the steam engine in the mid 19th century, this role expanded considerably as ships were no longer subject to dominant wind patterns. This long term attribute has been reinforced by recent trends where changes in international trade and seaborne trade are interrelated. Maritime transportation, like all transportation, is a derived demand. As of 2006 seaborne trade accounted for 89.6% of global trade in terms of volume and 70.1% in terms of value. Maritime shipping is one of the most globalized industry in terms of ownership.

Maritime transportation, similar to land and air modes, operates on its own space, which is at the same time geographical by its physical attributes,strategicby its control and commercial by its usage. While geographical considerations tend to be constant in time, strategic and especially commercial considerations are much more dynamic. The physiography of maritime transportation is composed of two major elements, which are rivers and oceans. Although they are connected, each represents a specific domain of maritime circulation. The notion of maritime transportation rests on the existence of maritime routes.

Maritime routes are corridors of a few kilometers in width trying to avoid the discontinuities of land transport by linking ports, the main elements of the maritime / land interface. Maritime routes are a function of obligatory points of passage, which are strategic places, of physical constraints (coasts, winds, marine currents, depth, reefs, ice) and of political borders. As a result, maritime routes draw arcs on the earth water surface as intercontinental maritime transportation tries to follow the great circle distance.

The most recent technological transformations affecting water transport have concentrated on modifying water canals (such as dredging port channels to higher depths), and on increasing the size, the automation and the specialization of vessels (e.g. container ships, tanker, bulk carrier). These transformations partially explain the development of maritime traffic that has been adapting to increasing energy demand (mainly fossil fuels), the movements of raw materials and the location of major grain markets. This massification of transport into regular flows over long distances is not without consequences when accidents affecting oil tankers can lead to major ecological disasters.

Fluvial transportation, even if slow and inflexible, offers a high capacity and a continuous flow. The fluvial/land interface often relies less on transshipment infrastructures and is thus more permissive for the location of dependent activities. Ports are less relevant to fluvial transportation but fluvial hub centers experiences a growing integration with maritime and land transportation, notably since the emergence of containers. The degree of integration for fluvial transportation varies from totally isolated distribution systems to well integrated ones. In regions well supplied by hydrographic networks, fluvial transportation can be a privileged mode of shipment between economic activities. In fact, several industrial regions have emerged in along major fluvial axis. More recently, river-sea navigation is also providing a new dimension to fluvial transportation by establishing a direct interface between fluvial and maritime systems.

The majority of maritime circulation takes place along coastlines and three continents have limited fluvial trade; Africa, Australia and Asia (except China). There are however large fluvial waterway systems in North America, Europe and China over which significant fluvial circulation takes place. Despite regular services on selected fluvial arteries, such as the Yangtze, the potential of waterways for passenger transport remains limited to fluvial tourism. Most major maritime infrastructures involve maintaining or modifying waterways to establish more direct routes (navigation channels and canals). This strategy is however very expensive and undertaken only when necessary. Significant investments have been made in expanding transshipment capacities of ports, which is also very expensive as ports are heavy consumers of space.

Maritime routes are spaces of a few kilometers wide trying to avoid the discontinuities of land transport. They are a function of obligatory points of passage (which are strategic places), physical constraints (coasts, winds, marine currents, depth, reefs, ice) and political borders. The majority of the maritime circulation takes place along coasts and three continents have limited fluvial trade (Africa, Australia and Asia; except China).

The location of resources such as oil and minerals determines maritime roads for bulks. The importance of large industrial zones and consumption markets are structuring exchanges of semi-finished and finished goods. Oil products and minerals are the most transported commodities. Over 30 million barrels per day are going through the relatively narrow shipping lanes portrayed above. These routes are known as chokepoints due to their potential for closure. Disruption of oil flows through any of these export routes could have a significant impact on world oil prices.

The importance of maritime routes has changed with economic development and technical improvements. For instance, containerization changed the configuration of freight routes with innovative services. Prior to containerization, loading or unloading a ship was a very expensive and time consuming task and a cargo ship typically spent more time docked than at sea. With faster and lower transshipment costs pendulum routes, which tend to be highly flexible in terms of which ports are serviced, have however emerged as the favorite form of containerized maritime circulation.

Not every territory has a direct access to the ocean. Maritime enclaves are such countries that have difficulties to undertake maritime trade since they are not part of an oceanic domain of maritime circulation. This requires agreements with neighboring countries to have access to a port facility through a road, a rail line or through a river. However, being an enclave does not necessarily imply an exclusion from international trade, but substantially higher transport costs which may impair economic development.

Maritime traffic is dominantly focused on freight. Before the era of intercontinental air transportation, transcontinental passenger services were assumed by liner passenger ships, dominantly over the North Atlantic.

Passengers are now a marginal leisure function solely serviced by cruise shipping. Several oceanic ferry services are also in operation over short distances, namely in Western Europe (Channel; Baltic Sea), Japan and Southeast Asia (Indonesia). The systematic growth of maritime freight traffic has been fueled by:

1. Increase in energy and mineral cargoes derived from a growing demand from developed economies of North America, Europe and Japan. For instance, coal is mainly used for energy generation and steel-making. Many developing countries, such as China, are also increasingly involved in importing raw materials.

2. Globalization that went on par with an international division of the production and trade liberalization.

3. Technical improvements in ship and maritime terminals have facilitated the flows of freight.

4. Economies of scale permitted maritime transportation to remain a low cost mode, a trend which has been strengthened by containerization.

Maritime traffic is commonly measured in deadweight tons, which refers to the amount of cargo that can be loaded on an "empty" ship, without exceeding its operational design limits. This limit is often identified as a loadline, which is the maximal draft of the ship. Maritime freight is conventionally considered in two categories:

1. Bulk cargo. Refers to freight, both dry or liquid, that is not packaged such as minerals (oil, coal, iron ore) and grains. It often requires the use of specialized ships such as oil tankers as well as specialized transshipment and storage facilities. Conventionally, this cargo has a single origin, destination and client. It is also prone to economies of scale.

2. Break-bulk cargo. Refers to general cargo that has been packaged in some way with the use of bags, boxes or drums. This cargo tends to have numerous origins, destinations and clients. Before containerization, economies of scale were difficult to achieve with break-bulk cargo as the loading and unloading process was very labor and time consuming.

There are four broad types of ships employed around the world:

1. Passenger vessels can be further divided into two categories: passenger ferries, where people are carried across relatively short bodies of water in a shuttle-type service, and cruise ships, where passengers are taken on vacation trips of various durations, usually over several days. The former tend to be smaller and faster vessels, the latter are usually very large capacity ships having a full range of amenities. In 2005, about 11 million passengers were serviced by cruise ships, underlining an industry with much growth potential.

2. Bulk carriers are ships designed to carry specific commodities, and are differentiated into liquid bulk and dry bulk vessels. They include the largest vessels afloat. The largest tankers, the Ultra Large Crude Carriers (ULCC) are up to 500,000 deadweight tons (dwt), with the more typical size being between 250,000 and 350,000 dwt; the largest dry bulk carriers are around 350,000 dwt, while the more typical size is between 100,000 and 150,000 dwt. The emergence of liquefied natural gas technology enabled the maritime trade of natural gas with specialized ships.

3. General cargo ships are vessels designed to carry non-bulk cargoes. The traditional ships were less than 10,000 dwt, because of extremely slow loading and off-loading. More recently these vessels have been replaced by container ships that because they can be loaded more efficiently are becoming much larger.

4. Roll on-Roll off (RORO) vessels, which are designed to allow cars, trucks and trains to be loaded directly on board. Originally appearing as ferries, these vessels are used on deep-sea trades and are much larger than the typical a ferry. The largest are the car carriers that transport vehicles from assembly plants to the main markets.

The distinctions in vessel types are further differentiated by the kinds of services on which they are deployed. Bulk ships tend to operate on both on a regular schedule between two ports or on voyage basis. In the latter case the ship may haul cargoes between different ports based on demand.

General cargo vessels operate on liner services, in which the vessels are employed on a regular scheduled service between fixed ports of call, or as tramp ships, where the vessels have no schedule and move between ports based on cargo availability.

Passenger transportation by sea is mainly concentrated in the sphere of international tourism.

Cruisesare mainly concentrated towards short sea journeys of about a week. Cruising has become a significant tourist industry. Big cruisers are like floating resorts where guests can enjoy luxury and entertainment while moving towards their multiple destination.

The international market for cruising was about 10 million tourists in 2000, more than doubling its market since 1990.

The principal geographic location of the main cruise lines are the Caribbean, the Mediterranean and South China / Pacific Ocean. Alaska and Northern Europe fjords are also popular during the summer season. This industry is characterized by a high level of market concentration with a few companies, such as Carnival and Princess.

Air transport

Air transportation was slow to take off after the Wright Brothers breakthrough at Kitty Hawk in 1903. More than ten years passed before first faltering efforts to launch scheduled passenger services.

World War I, which began just months after that first flight from Tampa, provided the first real spur to the development of commercial aviation as air power began to be used and better aircraft were quickly designed. The war left a legacy of thousands of unemployed pilots and surplus aircraft along with an appreciation for the future significance of this new technology. However, air transport still suffered from limitations in terms of capacity and range. 1919 marked the first commercial international air transport service between England and France. Governments played a crucial role in the next phase of aviation history. In Europe, governments established new passenger airlines while on the other side of the Atlantic, the American government heavily subsidized airmail. Airmail was one of the earliest avenues via which air transportation became commercially relevant because it helped to accelerate the velocity of the money supply and helped to better tie together far-flung enterprises, facilitating the emergence of continental and intercontinental enterprises. US airmail also subsidized the emergence of the first major US passenger airlines.

Before World War II, air travel was quite literally taking off, borne aloft by important advances in technology. Particularly important was the Douglas DC-3, the first airliner that could fly profitably without government subsidies (air mail routes). The DC-3 was a landplane; but on intercontinental routes flying boats, like the double-deck Boeing 314, remained common through World War II. Flying boats were the largest commercial aircraft until the building of the 747. They could fly very long distances but their slow speeds undercut their profitability. However, they were not very popular as only the elite could afford the expensive fares.

War again encouraged the rapid growth of air transportation. Indeed, it was only after World War II that air transportation became the dominant mode of long-haul passenger travel in developed country markets. In 1958, airlines carried more passengers than ocean liners across the Atlantic for the first time. Even more momentous, in October 1958, the Boeing 707 took its maiden commercial flight. The 707 was not the first jetliner, but it was the first successful one. The 707 and other early jets, especially the Douglas DC-8, doubled the speed of air transportation and radically increased the productivity of airlines which enabled fares to fall. Just a few years after the 707’s debut, jet service had been extended to most major world markets.

In the years since the beginning of the Jet Age, commercial aircraft have advanced markedly in capacity and range. Just 12 years after the debut of the 707, the 747 made its maiden flight. Not coincidentally, it too premiered on a transatlantic route from New York City. The 747, particularly the longer-range 747-400 version introduced in the late 1980s, has been nicknamed the “Pacific Airliner” because of its singular significance in drawing Asia closer to the rest of the world and because Asia-Pacific airlines have been major 747 customers.

Surprisingly, commercial jets have not improved in terms of speed. The fastest airliners in regular use today are about as fast as the 707. The Anglo-French Concorde which cruised at twice the speed of sound was hamstrung by very poor economics – it weighed half as much as a first-generation 747 but could carry only a quarter as many passengers and had a range more than 3,000 kilometers shorter. Moreover, the Concorde was an early target of the environmental movement, and restrictions on overland supersonic flights severely limited the market for the airliner. The only carriers to regularly operate it were British Airways and Air France, and although many cities had Concorde services in the first halcyon years of its early use, by the time the supersonic transport (SST) was finally grounded in 2003, only London, Paris, New York, and Washington had scheduled year-round services.

It is through increasingly long-haul nonstop services among an ever wider set of city-pairs rather than through increased aircraft speeds that air transportation continues to "shrink the world". After World War II aircraft were just beginning to be capable of crossing the Atlantic without stopping at intermediate places such as Newfoundland. In the mid-1950s, the Israeli carrier El Al advertised its transatlantic services. Today, commercial aircraft are now capable of making trips of up to 18 hours duration. Such ultra-long-range flights servicing the world's metropolises are both a response and an encouragement to globalization.

Relatively inexpensive air transport has also been crucial to the growth of tourism. It is no coincidence, for instance, that the five major Disney theme parks are all located near one of the world’s thirty busiest airports: Disneyworld near Orlando International Airport, Disneyland near Los Angeles International Airport, Euro Disney near Paris-Charles de Gaulle, Tokyo Disneyland near Tokyo-Haneda, and the newest park in Hong Kong.

Theoretically, air transport enjoys greater freedom of route choice than most other modes. Yet while it is true that the mode is less restricted than land transport to specific rights of way, it is nevertheless much more constrained than what might be supposed. Early in the history of aviation, physical obstacles such as the Rocky Mountains and the great gap of the North Atlantic limited the articulation of air transport networks. While those limitations have fallen, physical geography still affects the geography of intercity air transportation.

Yet the limitations that structure air transportation are mainly human creations. First, in the interest of air safety, air traffic is channeled along specific corridors so that only a relatively small portion of the sky is in use.

Strategic and political factors have also influenced route choice. For example, the flights of South African Airways were not allowed to over-fly many African nations during the apartheid period, and Cubana Airlines has been routinely prohibited from over-flying the US. Even more significant was the opening up of Siberian airspace to Western airlines after the Cold War. The new freedom permitted more direct routes not only between cities like London and Tokyo or New York and Hong Kong but also between transpacific city pairs like Vancouver-Beijing.

Few large areas of airspace forbidden to carriers on political grounds remain. However, the intervention of the state in airline networks remains pervasive. From its infancy, air transport was then seen as a public service and as an industry that should be regulated and protected. In many parts of the world, government intervention in the industry took the form of state-owned airlines. As recently as the early 1970s, Air Canada, Air France, British Airways, Japan Airlines, Qantas, and most other flag carriers throughout the world were fully state-owned.

Beginning in the 1970s, the relationship between the airline industry and the state changed, although the timing of liberalization (a term which refers to both deregulation and privatization) and its extent has varied among the world’s main markets. Across the globe, dozens of airlines have been at least partially privatized, and many airline markets have been deregulated.

Geographically, a key outcome of airline deregulation has been the emergence of hub-and-spoke networks centered on major airport where a single carrier is often dominant. Such networks existed before deregulation to some degree, but the Civil Aeronautics Board hampered the expansion of airlines and the rationalization of networks. United Airlines, for instance, was allowed to add only one city to its network between 1961 and 1978.

The world 15 largest airports are represented in the figure below. Each handles a traffic of over 30 million passengers, and all but Tokyo-Haneda and Dallas-Ft. Worth handled more passengers in 2006 than 2000.

Figure 1.1 World’s Largest Passengers Airports

After deregulation, most of the surviving major carriers tended to construct nationwide hub-and-spoke networks with several hubs to facilitate travel between different regions of the country. The advantages of large airlines were further deepened when nationwide hub-and-spoke networks were coupled to computer reservations systems and frequent flyer programs.

The Chicago Convention of 1944 established the basic geopolitical guidelines of international air operations, which became known as the air freedom rights.

First and second freedom rights are almost automatically exchanged among countries. The US, which emerged from World War II with by far the strongest airline industry in the world, had wanted third and fourth freedom rights to be freely exchanged as well. Instead, these and the other rights have been the subject of hundreds of carefully negotiated bilateral air services agreements (ASAs). In an ASA, each side can specify which airlines can serve which cities with what size equipment and at what frequencies. ASAs often include provisions that also regulate fares and the sharing of revenue among the airlines serving a particular international route.

Yet even in international markets, the extent and degree of state intervention has diminished. An important trend in the past decade has been the proliferation of Open Skies agreements. Open Skies agreements remove most restrictions on the number of carriers and the routes that they may fly between two countries. By the end of 2006, the US, for instance, had such agreements with nearly 80 countries.

Indeed, the US has pursued a very specific strategy playing one country in a region against another, putting pressure on Japan to liberalize its markets for instance by inaugurating Open Skies agreements with Singapore, Taiwan, South Korea and other Asian economies. Potentially the most important Open Skies agreement would be between the US and European Union. Moves in that direction have been stymied by US unwillingness to relax restrictions on foreign ownership of American carriers, among other concerns.

Nevertheless, many more airlines now operate internationally than before the liberalization of the airline industry began in the 1970s. As a result, on intercontinental and transcontinental routes, the former dominance of the 747 has been challenged by longer-range, widebody twinjet (two-engine jetliners) like the Boeing 767, Boeing 777, and Airbus A330. The triumph of widebody twinjets is most evident in the transatlantic market. The transpacific market is more concentrated among a smaller number of gateway cities, and the 747 is still dominant; but there is a clear trend towards fragmentation and displacement of the 747 by smaller aircraft, including ultra-long-range ones like the A340-500.

An important aspect of international airline networks is the recent formation of alliances. Alliances are voluntary agreements to enhance the competitive positions of the partners, particularly where the persistence of restrictive bilateral ASAs make it difficult for an airline to expand on its own. Members benefit from greater scale economies, a lowering of transaction costs, and a sharing of risks, while remaining commercially independent. The first major alliance was established in 1989 between KLM and Northwest Airlines. Today, the largest alliance is the Star Alliance, which was initiated in 1993 by Lufthansa and United Airlines. In 1996 British Airlines and American Airlines formed the oneworld alliance. Members of airline alliances cooperate on scheduling, frequent flyer programs, and equipment maintenance, and schedule integration. Most importantly, they permit carriers to tap markets that would otherwise be beyond their reach. Indeed, each of the major alliances encompasses almost every significant market across the globe, although each is dominated by US and European carriers.

A final important aspect of airline networks is the emergence of separate air cargo services. Traditionally, cargo was carried in the bellyhold of passenger airplanes, and provided supplementary income for airline companies. However, since passengers always had the priority when a plane was overloaded, such air freight services tended to be unreliable. Moreover, passenger aircraft are operated on routes that make sense for passengers, but may not attract much cargo. Today, about half of all air cargo is carried in dedicated freighters, aircraft in which goods are carried both on the maindeck and in the bellyhold.

The rapid expansion of air passengers and air freight flows fostered by globalization has made everything about the world’s great airports bigger. They are bigger in the volumes of traffic they handle, their sizes and the distances that separate them from the cities they serve, their costs and economic impacts, their environmental consequences, and the political controversies they engender.

By the year 2000 the airport terminal had become, strategically, the most important building type in the world. The very importance of airports globally has intensified the local conflicts they provoke. Indeed, a fundamental feature of airports is the degree to which they are set in at several scales:

1. Regional/National/Global. Airports are the engines of the global economy. They mediate currents of people and goods. For example, one factor propelling the growth of Dubai as an air transport hub is the fact with new ultra-long-range aircraft like the A340-500 any two locations on earth can be linked via a stop in Dubai.

2. Local. Airports, especially large ones, are defining features of the communities in which they are set. A large airport generates thousands of jobs directly and thousands more via forward and backward linkages.

Of course, the global and local impacts cannot be looked at separately. One positive way in which they come together in the case of airports is the location of corporate headquarters. A number of studies have shown a pronounced tendency for headquarters to cluster in cities with good international air accessibility.

On the other hand, the articulation of airports at several scales creates the potential for significant conflict. For instance, in Chicago, the USD 7 billion O’Hare Modernization Program promises to significantly reduce delay in the US air transport system benefiting travelers from throughout the nation (and even internationally), but the costs will fall heavily on local residents, particularly those living in the 530 residences that will be torn down to make way for the airport’s new and realigned runways.

Pipeline transport

Pipelines are a unique form of transportation used to move liquids, gases, or solid / liquid mixtures over great distances.

Pipeline routes are practically unlimited as they can be laid on land or under water. The longest gas pipeline links Alberta to Sarnia (Canada), which is 2,911 km in length. The longest oil pipeline is the Transiberian, extending over 9,344 km from the Russian arctic oilfields in eastern Siberia to Western Europe. Physical constraints are low and include the landscape and pergelisol in arctic or subarctic environments.

Pipeline construction costs vary according to the diameter and increase proportionally with the distance and with the viscosity of fluids (from gas, low viscosity, to oil, high viscosity). The Trans Alaskan pipeline, which is 1,300 km long, was built under difficult conditions and has to be above ground for most of its path. Pipeline terminals are very important since they correspond to refineries and harbors.

Pipelines are commonly used to transport crude oil. Oil pipelines have been constructed in all parts of the world, primarily in oil-producing regions such as the Middle East, the North Sea, southern Russia, the South China Sea, Texas, Oklahoma, and Alaska. In 1996 there were approximately 320,000 km (approximately 200,000 miles) of pipelines for crude oil or petroleum products. Also in 1996, the latest year for which figures are available, there were 2,053,591 km (1,276,315 miles) of pipelines for natural gas in the United States. Pipelines are also used to transport solids suspended in liquids, such as coal slurry, which consists of powdered coal suspended in water.

Pipelines for major energy resources (petroleum and natural gas) are not merely an element of trade. They connect to issues of geopolitics and international security as well, and the construction, placement, and control of oil and gas pipelines often figure prominently in state interests and actions. A notable example of pipeline politics occurred at the beginning of the year 2009, wherein a dispute between Russia and Ukraine ostensibly over pricing led to a major political crisis. Russian state-owned gas company Gazprom cut off natural gas supplies to Ukraine after talks between it and the Ukrainian government fell through.

Oil and gas pipelines also figure prominently in the politics of Central Asia and the Caucasus.

In general, pipelines can be classified in three categories depending on purpose:

Gathering pipelines

Group of smaller interconnected pipelines forming complex networks with the purpose of bringing crude oil or natural gas from several nearby wells to a treatment plant or processing facility. In this group, pipelines are usually short- a couple of hundred meters- and with small diameters. Also sub-sea pipelines for collecting product from deep water production platforms are considered gathering systems.

Transportation pipelines

Mainly long pipes with large diameters, moving products (oil, gas, refined products) between cities, countries and even continents. These transportation networks include several compressor stations in gas lines or pump stations for crude and multiproducts pipelines.

Distribution pipelines

Composed of several interconnected pipelines with small diameters, used to take the products to the final consumer. Feeder lines to distribute gas to homes and businesses downstream. Pipelines at terminals for distributing products to tanks and storage facilities are included in this group.


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