Jean-Paul Rodrigue (2013), New York:
Routledge, 416 pages.
Author: Dr. Jean-Paul Rodrigue
1. The Importance of Transport in Location
The location of economic activities is fundamentally based
on geographical concepts of the
its situation. The site relates to the characteristics
of a specific location while the situation concerns the
relationships of a location in relation to other locations.
Historically, specific sites suitable for defense or commerce
have been important factors in the
location of cities.
In addition to being a factor of spatial organization, transportation
is linked with the location of economic activities, including
retail, manufacturing and services. In a market economy,
location is the outcome of a
where many issues are being considered, transportation being
one of them. The goal is to find a suitable location that
would maximize the economic returns for this activity. There
is a long tradition within economic geography in developing
with a view to explain and predict the
of economic activities by incorporating market, institutional
and behavioral considerations.
The majority of location theories have an explicit
or implicit role attributed to transport since
accessibility is an important factor in the location preferences
of firms and individuals. As there are no absolute rules
dictating locational choices, the importance of transport
can only be evaluated with varying degrees of accuracy.
At best, the following observations concerning transportation
modes and terminals and their importance for location can
Globalization has been associated with significant changes
in business operations and markets. Managing operations
in such an environment has become increasingly complex,
especially with the globalization of production and consumption.
Manufacturing strategies tend to use different locations
for each component of a product in order to optimize respective
comparative advantages and reduce input costs. Transport
requirements have proportionally increased to support and
organize the related flows. The requirement of faster long
distance transport services has propelled the importance
of air transport, especially for freight. Air terminals
have thus become a significant location factor for globally
oriented activities, which tend to agglomerate in the vicinity.
Additionally, the surge in long distance trade has made
logistical activities, namely transport terminals and distribution
centers, at the forefront of locational considerations.
Technological changes have also been linked with the relocation
of industrial and even service activities.
facilities can favor the outsourcing of several services
to lower cost locations, such as the case of call centers
in India indicates.
The location of economic activities is a priori dependent
on the nature of the activity itself and on certain
location factors such
as the attributes of the site, the level of accessibility
and the socioeconomic environment. Although each
type of economic activity has its own set of location factors,
some general factors can be identified by major economic
- Ports and airports. Convergence of related activities
around terminals, particularly for ports since inland distribution
costs tend to be high. The location and the level of activity
airports are reflective of global trade patterns.
- Roads and railroads. A structuring and convergence
effect that varies according to the level of accessibility.
For rail transport, terminals also have a convergence effect.
- Telecommunications. No specific local influence,
but the quality of regional and national telecommunication
systems tends to ease transactions.
3. Accessibility and Location
Since accessibility is dominantly the outcome of transportation
activities, namely the capacity of infrastructures to support
mobility, it presents the most significant influence of
transportation on location. Hence,
and economic activities are interrelated. Accessibility
plays an important role by offering more customers through
an expanded market area, by making distribution more efficient
(in terms of capacity, costs and time), or by enabling more
people to reach workplaces (labor cost and qualification).
While some transport systems have favored the dispersion
of socioeconomic activities (e.g. automobiles and suburbanization),
others have favored their concentration (e.g. airports and
container terminals). All transport systems are bearers
of spatial specialization and configuration. Among the
five main economies,
four are particularly influential for transportation:
- Primary economic activities. Their dominant location
factor is related to environmental endowments, such
as natural resources. For instance, mining takes place where
economically recoverable mineral deposits are found and
agriculture is subject to environmental constraints such
as soil fertility, precipitation and temperature. Primary
activities are thus characterized by the most basic location
factors but have a strong reliance on transportation since
their locations rarely are close to centers of demand and
they usually concern ponderous goods. Substantial investments
in extraction and distribution infrastructures must thus
be made before resources can be brought to markets. The
capacity to transport raw materials plays a significant
role in the possible development of extractive activities
at a location.
- Secondary economic activities. Imply a complex
web of location factors which, depending upon the industrial
sector, relate to labor (cost and/or skill level), energy
costs, capital, land, markets and/or proximity of suppliers.
Location is thus an important cost factor and the
general purpose is usually to minimize it. Considering the
wide variety of industrial and manufacturing activities,
understanding the rationale of each sector is a difficult
task that has been subject to many investigations in economic
geography. Globalization, recent developments in supply
chain management and
networks have made the situation even more complex with
the presence of many intermediaries and significant
The industrialization of China has been supported by several
strategies trying to multiply locational advantages, such
as the setting of export-oriented
zones and large investment in transport infrastructure.
- Tertiary economic activities. Involve activities
that are most bound to market proximity, since the capacity
to distribute a product or service is their most important
location requirement. As many of these activities are retail-oriented,
consumer proximity (as well as their level of income) is
essential and is directly related to sale levels. The main
focus is to maximize sales revenues with location an important
revenue factor. The retail industry has significantly
changed with the emergence of large retail stores that maximize
sales through economies of scale and local road accessibility.
E-commerce also provides a new dynamic where information
can easily be traded and where niche retailing markets can
be developed in a situation of high product diversity.
- Quaternary economic activities. Imply activities
not linked to environmental endowments or access to a market,
but to high level services such as banking, insurance, education,
research and development. This often relate to the high
technology sector where innovation is a key commercial factor.
With improvements in telecommunications, many of these activities
can be located almost anywhere as demonstrated by the recent
trend to locate call centers offshore. There are still some
strong locational requirements for high technology activities
that include proximity to large universities and research
centers and to a pool of highly qualified workers (as well
as cheap labor for supporting services), availability of
venture capital, a high quality of life (cultural amenities)
and access to excellent transportation and telecommunication
facilities. The sector has shown a propensity at clustering
as close inter-firm relations are a factor of innovation.
Because of the level of accessibility they provide, new
transport infrastructures influence the setting of economic
activities. It becomes a particularly strong effect when
new infrastructures are added to an undeveloped (or underdeveloped)
site and thus locational decision tend to be simpler and
unhindered by the existing spatial structure. The locational
effects on activities are not always automatic or evident.
They are important however when infrastructure is accompanied
by social, economic and urban transformations of space.
New infrastructures therefore play a catalytic role, because
they are able of transforming space through land use and
- Transportation costs. Refer to the
benefits of a location that minimizes transport costs either
for passengers or freight. These considerations are at the
core of classic industrial
location theories where transport-dependent activities
seek to minimize total
transport costs. With the expansion of transport infrastructures,
shifts in manufacturing, new economic activities such as
high technology, logistical management and an overall decline
in transport costs, cost minimization is no longer a substantial
consideration in locational choice. However, transport costs
cannot be easily dismissed and must be considered in a wider
context where the quality and reliability of transport is
of growing importance. It has been demonstrated that travel
time, instead of distance, is the determining factor behind
commuting ranges. For freight distribution, while cost factors
are significant, there is a growing importance of the concept
economies. Refer to the benefits of having
activities locate (cluster) next to another, such as the
use of common infrastructures and services. Clustering continues
to be a powerful force in location as the reduction in transport
costs favored the agglomeration of retail,
manufacturing and distribution
activities at specific locations. For instance, shopping
malls are based on agglomeration economies, offering customers
a wide variety of goods and services in a single location.
Distribution activities, even unrelated, have also a tendency
to cluster in
logistics zones. The development of special economic
export-oriented, also benefit from the clustering effect.
An agglomeration economy which is specific to transport
terminals and concerns the benefits derived for an activity
from being located directly adjacent to a terminal facility.
Globalization has underlined the growing importance of transport
terminals and of the principle of co-location, which can
be seen as a very specific form of economy of agglomeration;
localization economies. The main benefit concerns a complete
and privileged access to the transport capacity and connectivity
of the terminal. Any level of separation between the activity
and the terminal significantly reduce or even negates the
advantages of co-location. It could involve an individual
activity or a cluster of activities where agglomeration
economies can be added to the benefits of co-location. Hotels
located adjacent to airports or rail stations are set on
the co-location principle since they derive their business
almost exclusively from the terminal's passenger activities.
The distribution centers of parcels companies are commonly
located directly adjacent to runways so that their air freight
services can be tightly synchronized with the consolidation
and deconsolidation of air parcels. For intermodal rail
ports facilities are built over the principle of co-location.
- Economies of density. Somewhat related to economies
of agglomeration, but focus on spatial coverage and proximity.
A core issue concerns the benefits derived from market density
so that the same customer base can be reached (or serviced)
with shorter distances and thus with less facilities. For
instance, if the customer density is sufficient, a retailer
can achieve several types of cost savings by locating its
stores in proximity to one another. Such a structure reduces
logistics and delivery costs by sharing a distribution center.
Other advantages may include the possibility to relocate
part of the workforce between nearby facilities and having
shared advertising. In such a circumstance, the locational
strategies are based on proximity to existing facilities,
even if this implies the selection of sub-optimal locations.