10.1 – Improving Transport Infrastructure

Author: Dr. Jean-Paul Rodrigue

Transportation infrastructures are challenged by congestion and the need to add capacity and better manage existing infrastructures.

1. The Enduring Challenge of Congestion

Congestion is likely to remain one of the ongoing issues in transport geography because there are unprecedented demands for transportation being generated by a global economy that is ever more dependent upon mobility in part due to an increase in living standards. The causes of congestion are well understood, even if the solutions are not. Congestion occurs across modes and locations and arises from two causes.

  • The first and most important is when the demand for mobility exceeds the capacity of the transport system.
  • Second, when random but predictable events bring about a temporary service disruption, such as an accident or a natural hazard such as flooding.

In the case of the second set of causes, it is possible to mitigate their effects if the occurrence is frequent, such as accidents, or if the risks are high, such as of flooding. A common and attractive solution is to increase capacity. However, increasing capacity engenders a hidden demand, so that adding lanes to an expressway tends to attract even more circulation. Furthermore, demand is growing consistently, so that the practicality of this solution may be questioned.

The expected growth of mobility demands is likely to have major impacts on the nature and form of the future transport industry. In the short term, road transport is expected to continue its dominance. There are two primary reasons for this assertion. In the developed world, automobiles and trucks already dominate the market, and the spatial patterns of economic activities are interdependent to the demands of these modes. Such low density, space extensive patterns are pushing the traffic congestion ever further out and make it very difficult for other higher-capacity modes to compete. At the same time, the demand for mobility is growing as a result of the rapid industrialization in developing economies such as China and India. In this context, economic development incites a modal shift in favor of road transport.

Congestion is not limited to urban traffic. International trade is likely to continue to be dominated by maritime transport (in terms of weight) and air transport (in terms of value). This has already led to a concentration of traffic, a relatively small number of gateways and hubs, which are capable of extracting scale economies. For example, the 20 largest container ports handled more than 50% of global traffic in 2015. However, traffic concentration is already producing capacity problems in many of these gateways, particularly in accessing their hinterlands. International trade has grown faster than economic growth as measured by the GDP in recent decades, and there are expectations that congestion related to trade flows (or long-distance freight transportation) will remain an issue in the future. These expectations may, however, be counterbalanced by technological changes in manufacturing and locational behavior.

There is a whole range of issues arising out of the growth of demand and congestion. First are a series of questions surrounding how to provide solutions. Second, are the effects on future spatial patterns. Conventionally, the solution to congestion was to provide more capacity by building more infrastructure. Such a response depended heavily on engineering solutions to design and construct infrastructure and to develop further technological innovations. However, transport policy and planning require a broader perspective, one that considers different goals and alternatives, responds to different mobility needs, and seeks ways to manage demand.

Congestion is spatially bound. It takes place in specific locations with impacts at a multitude of scales, from a particular highway intersection that may delay traffic over a few hundred meters, to delays in a port that may disrupt the flow of goods over half a continent. Each event produces a spatial response, from the car driver searching for an alternative route to the shipper who selects a different mode or point of entry for subsequent shipments. Increased demand and the increasing likelihood of congestion will intensify new spatial responses, and thus it appears very likely that new spatial flows and structures will come into being. They involve:

  • Demand management. Concerns the conditions and locations where travel demand can be influenced. In a market context, when supply is fixed and demand increases, an upward price adjustment inevitably takes place. This is common in maritime and air transport with yield management strategies. However, many transport infrastructures, such as roads, are provided free of access, implying no cost changes as congestion levels increase, only the cost of time wasted for the users. There is thus a growing need to provide incentives (or disincentives) and reassess the priority in the use of infrastructure, particularly in urban areas.
  • Concentration versus deconcentration. Accessibility and infrastructure improvements usually lead to a concentration of activities, while congestion acts as a counteracting force to concentration since it creates various diseconomies. Already there is evidence of deconcentration for ports, airports, and distribution centers with the selection of peripheral sites that are less congested and offer more technical advantages such as available land. The density of economic and social activities and the related intensity of transport use imply a balance between central and peripheral locations and how the forces of concentration and deconcentration pan out.
  • Economic and social impacts. In a context where transport networks are increasingly synchronized congestion can create multiplying effects, not just impacting costs, but also the reliability of transport systems. The economic and social impacts of congestion remain a salient issue, particularly in developing economies where it can impede economic growth and in developed economies where they mainly impair performance and reliability.
  • Passengers versus freight. Congestion also raises the issue of the prioritization of passengers versus freight when they share transport infrastructure or when freight activities such as terminals or distribution centers are in proximity to locations where large numbers of passengers are in transit. This requires a careful assessment of the respective costs of congestion on specific passenger and freight transport systems and in which circumstances congestion exerts the most externalities. A salient issue concerns how freight distribution could be better integrated into the urban environment where passenger movements tend to dominate; the realm of city logistics.

2. The Life Cycle of Transport Infrastructure

Regardless of the specific solutions to congestion that are considered, increasing demand is placing unprecedented requests for investments on transport infrastructures. A major question confronting all countries around the world is how to finance the construction and maintenance of transport infrastructures. As economies of scale are applied to transport systems, such as larger containerships or doublestacked rail corridors, capital requirements increase in proportion. Governments have traditionally been the primary source of funding in the transport sector. Still, the costs of keeping pace with the growth in demand are making it difficult for even the wealthiest countries to provide public funding on the scale required to meet expectations about the mobility of passengers and freight.

Capital requirements are particularly prevalent on both sides of the infrastructure life cycle spectrum. Over this matter, the highways in China and North America represent two salient cases. For China, the last two decades have seen an impressive level of highway construction with the setting of a national highway network, the longest in the world. Comparatively, the American Interstate highway system is nearing a phase in its life cycle. A substantial amount of capital investment will be required to upgrade the system and maintain its operability, including thousands of aging highway bridges. While most of the Interstate is publicly funded, almost all Chinese highways were funded by private interests that are using tolls to recover their investments. Irrespective of the context, the issue of the role of private and public actors in transport infrastructure as well as pricing mechanisms will remain salient:

  • Public-private partnerships and completely private solutions are one set of solutions. For many developing economies, this the main option since public finances are usually insufficient for the high level of capital investment required by modern transport infrastructure. Thus, private involvement in the provision of transport infrastructure is to be expected. Several models have already been implemented: BOT (Build-Operate-Transfer), where the private sector builds and operates a facility or system and then transfers it back to the government after an agreed period; BLT (Build-Lease-Transfer), where after building a facility, it is leased for a fixed period and finally transferred back; ROT (Rehabilitate-Operate-Transfer) where the private party refurbishes an existing facility to be operated for a term before being turned back to the state.
  • Pricing. Another approach that is gaining momentum is charging for the use of transport infrastructure. Several segments of the transport system are privately owned and operated, such as maritime shipping and air transportation implying that market forces generally set pricing. Still, many transport infrastructures, such are roads and airports, are wholly or partially owned by the public sector. Pricing is becoming an important feature of transport planning in urban areas where common use of transport infrastructures are under high demand. Whether it is cordon pricing, congestion pricing, yield management, or tolling, road users are being forced to pay for their use of roads, and limited price elasticity has been observed so far. With the growing concerns over the environment, charging for the externalities of transport modes is becoming a reality in many jurisdictions. It remains to be seen about how effective these alternatives are and their effects on travel behavior.

Most transport infrastructure projects are long term but are typified by high capital investment requirements being incurred over a short initial phase for securing land, rights of way, and constructing infrastructure. Even if transport infrastructure can be built and expanded in phases, most private enterprises cannot take a long-term perspective because they need to cover their expenses and recover their capital investments over short time periods. Further, the maintenance of transport infrastructure can be subject to different approaches:

  • Reactive. The standard approach when maintenance is performed after infrastructure damage or failure. While it imposes less stringent financial burdens, the disadvantage of this approach is the loss of capacity while maintenance is being performed. It is particularly prevalent for public infrastructures such as roads since the public sector is reluctant to commit resources.
  • Preventive. Maintenance is performed on a regular basis to ensure that the transport infrastructure operates according to defined parameters and assumptions in terms of lifespan. This form of maintenance can be capital intensive since it could involve unnecessary investments.
  • Proactive. Maintenance is performed before infrastructure is predicted to be damaged or fail. This requires monitoring of the infrastructure and the capability to accurately expect damage or failure at a certain point in time and under specific usage and environmental conditions.

With the growing unwillingness or inability of the public sector to fund and provide transport infrastructure, new forms of infrastructure provision, maintenance, and operation need to be achieved. This is where the financial sector, particularly long-term investment funds (such as pension funds and sovereign wealth funds), can be involved with a better synchronism between the capital and time horizons of transport infrastructure projects.

Eventually, due to technological obsolescence, public policy, or commercial changes, transportation infrastructure can reach the end of its life cycle. The challenge becomes how to recover and reuse the existing footprint, which can take many forms. For linear infrastructures such as canals, rail lines, and roads, the right of way can be kept and used by another transport mode. For terminals such as ports, warehouses, and rail stations, the facility can be converted to any urban use, including parks, residential or commercial facilities. The real estate value of the footprint is often a determining factor in the incentive to re-purpose transportation infrastructure since it is competing with other uses. This underlines that transportation infrastructure in remote or low-density areas is often abandoned at the end of its life cycle. The cost to re-purpose may exceed the potential benefit. In the coming decades, particularly in advanced economies, large tracts of transport infrastructure will need to be reconverted to other uses, creating several opportunities for innovation in spatial planning.

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