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CHAPTER -1
INTRODUCTION
1.1 General
Transportation is literally described as a means of carrying people as well as
goods and animals from one location to another. Since the development of the world’s
earliest civilizations, people have needed to move themselves and their goods from
one place to another. As a result, people have modified their environment by building
transportation infrastructure to make movement faster and easier.
Transport is the basis of trade infrastructure, it has a significant impact on the
competitiveness of certain industries in countries and regions. Imperfections in the
transport system negatively affect the efficiency of the economy as a whole.
Conversely, the accelerated development of transport infrastructure and the
improvement of transport and logistics systems can have a significant impact on
economic growth and ultimately on the population well-being.
The transport sector significantly contributes to the economy of a country by
providing jobs for a large number of people involved by providing jobs for a large
number of people involved in vehicles production, traffic safety control, vehicle
management, which enables safe and efficient movement of people and goods. In
short, transport networks are the heart of the supply chain and the foundation of every
country’s economy.
1.2 Introduction
The transportation industry is a key part of the economy and a typical
development tool because it relies heavily on infrastructure. Even more so in a global
economy where economic possibilities have become more linked to the movement of
people and goods, including information and communication technology.
There is correlation between the quality and quantity of transportation
infrastructure and economic growth. Transport infrastructure that is dense and well-
connected is often correlated with high levels of growth. Multiplying impacts such as
increased market access, employment possibilities and more investments occur when
transportation networks are well-functioning. Deficient transportation networks can

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have an economic impact in terms of diminished or lost opportunities and worse
quality of life, as well as an impact on the environment.
In addition, transportation’s effects may have unexpected or unanticipated
implications, even if they were not the original intent. When free or low-cost
transportation infrastructure is made available to the general public, congestion is
sometimes an unforeseen result. While congestion is a sign of a flourishing economy,
it may also be a sign that capacity and infrastructure are unable to keep up with
increased mobility needs. A significant social and environmental burden is placed on
transportation which cannot be ignored.
1.3 Objective
The aim of this term paper is critically to discuss modes of transportation, the
role of transportation, and finally to present transportation and economic development
which are the beneficial things to develop a nation.

Chapter – 2
MODES OF TRANSPORTATION
Transport modes are designed to either carry passengers or freight, but most
modes can carry a combination of both. For instance, an automobile has the capacity
to carry some freight, while a passenger plane has a belly hold that is used for luggage
and cargo. Each mode is characterized by technical, operational, and commercial
characteristics defining its market opportunities. The demand for transport and the
ownership of modes are dominant commercial characteristics as transportation modes
are used to support economic activities and generate income.

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Figure (2.0) – Modes of Transportation

There are many modes of transportation as discussed below –
(1) Road Transport
(2) Railway Transport
(3) Water Transport
(4) Air Transport
2.1 Road Transport
The first and most common mode of transportation in logistics is road. With the
continued improvement of vehicles and road infrastructure, transportation by road is
the most versatile mode with the least geographical constraints. This attribute of road
transport makes it the preferred mode for smaller loads over a shorter distance and as
such road is the only mode that performs door-to-door deliveries. Consequently, most
shipments that initially were carried by another mode of transportation are completed
by road transportation.
2.2 Rail Transport
Rail transport is one of the most important commonly used and very cost-
effective modes of commuting and goods carriage over long as well as short distances.
Rail transport is an enabler of economic progress used to mobilize goods as well as
people. Rail is the most energy efficient mode of passenger transport. If more people
were to travel by train and more freight transported by rail (rather than more
polluting modes) then the carbon dioxide emissions from the transport sector
would be greatly reduced.
2.3 Water Transport
Water transportation is described as the movement of people and freight by
boat, ship, barge or sailboard across ocean, sea, lake, canal, river or through other
modes of transportation. It is also a vital method of transportation. Water
transportation is the most cost-effective method of moving large, perishable and heavy
products across long distances. This method of travel is mainly used to carry people as
well as perishable and non-perishable items together referred to as cargo.

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Water transport is the most economical and historically significant method of
transport. It has a very low operating cost. It has the greatest load capacity and is thus
the best suited to transporting huge quantities of heavy items across long distances. It
has been instrumental in bringing the world’s many regions closer together and is
essential to international commerce. Water transport is mainly divided into two types
namely;
(1) Inland Water Transport
(2) Ocean Transport
2.3.1 Inland Water Transport
Inland water transport is generally acknowledged as a clean, safe and most
energy efficient mode of transport when compared to land-base systems which are
often confronted with congestion and capacity problems. Promoting a modal shift
away from road transport to inland water transport can also generate safety benefits as
it may replace heavy goods vehicles which are responsible for a disproportionate
amount of traffic accidents. Furthermore, inland water transport also has the potential
to support regional cooperation and integration by creating a common transport route
across several countries that share the same river.
2.3.2 Ocean Transport
Ocean transport is an economical way of transport when it comes to
international commerce. The price of the transport route is low as compared to other
modes of transport. The sea does not require any large investments regarding
infrastructure. There is no country except those which have a compromised
geographical location which do not use maritime shipping for trade with the world.
Ocean transport is crucial for any state in different ways. If the state focuses on
it, there are manifold benefits for the country. It influences the overall economy of a
country. Since many industries are directly or indirectly linked with ocean transport,
the progress of country depends on it. There are many countries which take advantage
of their location and gain a lot from maritime shipping. Being one of the oldest ways
of transport, maritime shipping is increasing its importance in the realm of world
trade.
2.4 Air Transport

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The newest mode of transportation is air. Airplanes are becoming increasingly
important in domestic and international trade. With continually improving
technologies and practically unlimited route possibilities, air transportation is the
fastest growing and most time efficient shipping mode.
As air travel has become increasingly advanced and dependable, more
companies are trusting airplanes with high value freight and goods. The increasingly
popularity of flight as a preferred way to travel also makes shipping by air more
convenient as shipments regularly piggyback on passengers’ planes, further making
air an economic way to transport goods.

Chapter – 3
The ROLE OF TRANSPORTATION
Transportation plays an important role in the daily life of human beings. It is
necessary for things to be moved around. As transportation systems have developed
over time, the speed and efficiency of these systems have improved drastically. The
importance of transportation is showcased in how individuals, businesses and
governments rely on it to access resources. A society cannot function optimally if it
does not have measures in place to facilitate transport. People, resources, jobs and
economies all need seamless movement to keep the entire world moving forward.
3.1 Transportation Helps in Mass Production and Stability of Prices
The credit for the development of large-scale industries goes to a certain extent
on the better transport facilities in the world. Buying raw materials cheaply in huge
amount from the faraway places has been possible because of effective infrastructure
and transportation facilities. It has encouraged mass production that has resulted in the
creation of new and expansion of old markets.
It the cost of labor in one specific place is very high, it is possible to hire labor
from different regions as they can travel without difficulties from one place
to another. The importance of transportation is that it has helped in minimizing
production costs. There was a time when prices used to fluctuate immensely because
of the scarcity of goods in one place and surplus in another.

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Transportation has now brought about uniformity in price ranges by equalizing
and stabilizing it throughout the nation. This move has been a blessing in disguise
because it has encouraged healthy competition and discouraged the policy of
monopoly of goods.
3.2 Transportation Helps in Economic Development
Human beings depend upon natural resources and materialistic goods and
services to satisfy the needs and wants of life. There is no uniformity in the production
of these resources and things and at this point in time, it is the transportation that
comes forward as a blessing in disguise and distributes the necessities as well as
luxuries from one place to another.
Trade is no longer restricted within certain boundaries but has spread far and
wide within every nook and corner of the world. It is the advancement of
transportation that has acted as a binding force to link the world market. The
importance of transportation is that it has become a major force in boosting the
immobility of capital and labor.
Now, it is possible for laborers to migrate to places where the job facilities and
opportunities to earn are greater than the local places. Economic development has
been possible because efficient transportation infrastructure has been able to minimize
the exploitation of the labor class and maximize the optimization of national
resources. It is now possible for a region to concentrate on the production of goods
that it is best suited for and distribute it to places where the demand is more.
The importance of transportation is that it has become a crucial element of
economic growth as it can transport resources easily enabling societies to prosper and
grow at a good rate. There is now better accessibility to investors for new as well as
existing business entities. It is easy to see the emergence of markets, schools, colleges,
and other facilities that have been a sign of increased economic growth.
3.3 Transportation Offers Numerous Opportunities
There are several modes of transportation like air, water and road where ships,
trains, aircraft etc. reign supreme. The importance of transportation is that offers
numerous opportunities to millions of people all around the globe.

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An effective transport system offers social, economic, political and cultural
advantages like accessibility to markets, infusion of investors, distribution of
resources etc. that result in an indirect impact on the growth and development of a
country. It can be measured in terms of added value and employment.
There is an increase in employment opportunities and it helps to boost the
national income of a country. It also acts as a viable opportunity for the consumer who
can enjoy the usage of numerous goods and services that were earlier not available at
their local place.
It is because of the importance of the transportation that goods and services
have been able to breach local boundaries and find new markets for their items. This
has ultimately reduced the cost price of the consumer, increased his purchasing power
and given him an opportunity to save some money in the process.
3.4 Transportation Helps in Cultural Development
The importance of transportation is that it has facilitated a better understanding
between people as they are no longer divided by specific boundaries of a place. As it
has become easier to maintain contact there has been an increase in the sharing of
cultural ideas and promoting cooperation in the world. Better understanding has
resulted in warm and cordial relations between people of different cultures.
It has broadened the outlook of the individuals and given them a better
perspective to look at things. The importance of transportation is that it helps in
cultural development by spreading relevant information and knowledge amongst
individuals. It is also a factor in minimizing ignorance and prejudice that is prevalent
in society.
3.5 Transportation Helps in Industrial and Agricultural Development
The importance of transportation is that it has helped in the industrial as well as
agricultural development of a country. It has been possible to use good fertilizers
qualitative seeds and numerous modern equipment and techniques because they could
be transported from one place to another at reasonable costs.
Similarly, it is transportation that has helped the industries in acquiring the
necessary raw materials as well as equipment and labor that is a must for industrial

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development. Remember encouraging trade, industry, commerce and agriculture is
one of the simplest and most economical ways of boosting the
national wealth of the country.
3.6 Transportation Helps in Political Development
Transportation is no doubt a vital key for the growth and development of
civilization but it is also a tool and a means for creating a political awakening in the
people. Sometimes, people come together for a common cause from different parts of
the country and at that point in time, it is effective transportation that helps them to
meet at a common point of contact and raise their voices against the cause of injustice.
The importance of transportation is that it helps in political development. It
enables political and economic interdependence by encouraging the division of labor
and strengthening national unity and integration. It helps in maintaining peace and
harmony as the deployment of troops in any nook and corner of a country is no longer
difficult. It is also important source of revenue for the central and state governments
and helps in boosting the national income and wealth of the nation.
3.7 Transportation Helps in Bringing People Closer During Natural
Calamities
The importance of transportation is that it helps in bringing people closer
during natural calamities. Floods, drought, earthquake and famine are natural disasters
that are unpredictable by nature. It is next to impossible to make predictions about
their arrival, length or severity. One can just wait for the time it loses its fury and dies
a natural death.
The worst thing about such disasters is that they leave behind immense
destruction that is immeasurable. Loss of lives, resources and infrastructure are
common after effects that people have to deal with. In such dire circumstances, it is
transportation that acts as a blessing in disguise and managers to distribute survival
kits and emergency food items immediately afterward.
3.8 Streamlining The Tourism Sector
All commercial activities are connected to transport in one way or another and
these links have a direct impact on operations and performance. Organizations depend
on transportation systems to deliver products and services in a timely manner.

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Tourism is among the sectors that have emerged as powerful tool for economic
advancement. It accounts for 30% of global trade. Transport is important on the basis
of socio-economic factors as well as the influence it has on relationships between
different countries.
Through the role of moving people and goods, transport enables tourism and
travel by making it possible for people to go to the places they want to see. Without
transportation, tourism cannot develop and the international movement would be a
pipe dream.
In order for tourists to be able to reach their destinations, they need an array of
transport options that they select according to factors such as cost, convenience and
efficiency.
Transport is essential for connecting travelers to locations. Generally, the travel
sector’s growth is dependent on the transport infrastructure that is put in place. Many
countries seek solace in a thriving tourism sector that yields profitability and helps to
fill gaps in the nation’s budget. It is hard to picture a world where people cannot travel
or explore other destinations. Transport connects the global system by creating a
network that makes it easier for people to go to different places because different
means of transport are available.

CHAPTER – 4
TRANSPORTATION AND ECONOMIC DEVELOPMENT
To encourage economic growth, governments need to invest in logistics
infrastructure such as roads, railways, airports and ports. Additionally, governments
need state investment to be considerate of the environment and protect citizen’s rights
for clean air, decent places to live and work, as well as fundamental human rights and
equalities. Governments in different nations have different attitudes and priorities
regarding how much attention they pay to these issues.
4.1 The Importance of Transportation to The Economy
Economies across a wide range of industries benefit from more efficient
transportation, while the costs of inefficient transportation are increased. In addition,

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transportation’s effects may have unexpected or unanticipated implications, even if
they were not the original intent. When free or low-cost transportation infrastructure is
made available to the general public, congestion is sometimes an unforeseen result.
While congestion is a sigh of a flourishing economy, it may also be a sign that
capacity and infrastructure are unable to keep with increased mobility needs. A
significant social and environmental burden is placed on transportation which cannot
be ignored.
In order to determine the economic value of transportation, one must categorize
the many implications it has on the economy. Core, operational, and geographic
factors all play a role in transportation.
 Core: Physical ability to carry persons and products and the corresponding
expenses connected with this mobility are the primary consequences of
transportation. In this case, new or existing connections between economic
entities are established.
 Operational: Reliability and minimized loss or damage in the time
performance, particularly in terms of reliability passengers and freight will be
transported more quickly and with fewer delays as a result of this improved
usage of current transportation infrastructure.
 Geographical: Gaining access to a larger pool of potential customers opens up
new opportunities for cost savings in manufacturing, distribution, and
consumption.
Higher outputs and wider markets for various products result in higher
productivity from a bigger and more diversified base of inputs (raw materials,
components, energy or labor).
As a result, the macroeconomic and microeconomic significance of the
transportation industry may be evaluated.
 Macroeconomic
The importance of transportation and related mobility to a country’s
productivity, employment and income are inextricably intertwined in the global
economy. Between 6% and 12% of the GDP is spent on transportation in many
wealthy countries. In addition, logistical expense might account for 6% to 25% of

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GDP. Transport assets such as infrastructure and automobile may easily account for
half of a developed economy’s GDP.
 Microeconomic
Transportation has a direct impact on the costs of production, consumption and
distribution in a given economy. For each area of the economy, specialized
transportation operations and infrastructure may be evaluated. In general, higher
incomes are linked to a higher proportion of consumer costs going toward
transportation. Between 10% and 15% of family expenditures are spent on
transportation. When compared to the cost of each unit of output in manufacturing in
accounts for just around 4% of the total cost.
4.2 Investment and Economic Growth
Developing an understanding of the transport and transport-related challenges
and opportunities facing alternative industry sectors is an important first step in the
development of an investment programme to improve productivity and
competitiveness.
Investment in transport networks can influence the functioning of labor
markets, business productivity and competitiveness. These impacts interact over time
and can lead to improvements in economic output and the geographical distribution of
economic activity. They can also impact on the environment, quality of life and
overall attractiveness of towns and cities. Investing in transport connectivity can not
only influence the amount of economic activity in a region, it can also influence where
it is located.
4.3 Growth of Business Organization
Transportation is considered a major force that has contributed heavily to the
growth of business organizations. It is the medium that physically connects
a business entity to its customers as well as suppliers.

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Figure (4.3) - Growth of Business Organization

The importance of transportation in business is undoubtedly immense. From

bringing raw materials from the source stations to the manufacturing facilities and
later distributing the finished goods from these locations to the consumer market via
warehouses is an essential service that would not have been possible without it. It is
the transportation that ensures the availability of goods and services to the consumer
in a timely manner.
Each movement of cheap and affordable manpower, coordination between
scarcely and more supplied areas has helped in mass production and greater sales
figures. This has led to profit maximization. It is a fact that most business activities
are dependent upon transportation and are also influenced by its role.
4.4 Contribution of Transport in Sustainable Development Goals
Development of sustainable is very important in every pattern especially in this
century, therefore, in the discussion of sustainable development is very important.
Sustainable transport is central to sustainable development. The 2030 Agenda states
that “Sustainable transport systems, along with universal access to affordable, reliable,
sustainable and modern energy services, quality and resilient infrastructure and other
policies that increase productive capacities, would build strong economic foundations
for all countries”.

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Figure (4.4) - “Contribution of Transport in Sustainable Development Goals”

With impacts across a range of sustainable development goals (SDGs), it is key
to achieving the 2030 Agenda for sustainable development and the Paris Agreement
on Climate Change. Sustainable transport (SDGs 17) enables the mobility of people
and goods; it contributes to poverty eradication and inequality reduction by generating
jobs, enabling access to jobs and supporting livehoods.
Sustainable development at the transportation sector can be divided into three
major sections: society, economy and environment. Transportation sustainable
development requires balancing to achieve the minimum expectations in these three
sectors. For increasing the role of transportation in sustainable development, we need
to use some strategies for increasing sustainability. These strategies include promoting
public transportation, demand management, improving road management, pricing
policies, vehicle technology improvement, using clean fuels, cultural enhancement,
and transportation planning.
Sustainable transport has many benefits: it can ensure food security, improve
access to important services such as health, education and finance, enable inclusive
economic growth, empower women and vulnerable groups and further the health and
well-being. It can also support the realization of human rights.
Sustainable transport enables connectivity at all levels, allows for community
interaction, helps integrate markets and economies, enhances rural-
urban linkages, and facilitates international trade. It underpins regional and global
supply chains and improves their efficiency; it contributes to trade competitiveness
and can boost resilience to systemic and external disruptions including economic
shocks, pandemics and climate-related disasters and extreme weather events.

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CHAPTER – 5
CONCLUSION
Advanced in transportation has made possible changes in the way of living and
the way in which societies are organized and therefore have a great influence in the
development of civilizations. The development and management of the transportation
system are critical in economic and social development as we mentioned earlier, most
strategic and important public transport decisions are made with capital cost
constraints which are based on many factors.

In a mixed economy, one of the ways of measuring the success of

government’s influence on the economy is by comparing how it has affected logistics
and transport growth. A government wants an efficient transport system because it
allows easier movement of labor from households to firms, goods and services
between firms, and from firm to households. Additionally, it allows labor to easily
move between firms, and products and services from firms to households.
However, there are many challenges, problems and issues related to
transportation systems such as safety, cost and quality that require effective solutions
and improvement using surveys and comparisons by decision-making methods and
techniques. Due to the rising challenges in the transport world through the
implementation, maintenance and distribution of the projects and increase of
population of the cities, the level of quality in the transport system is an important
factor in the global field and of the market socio economies.
To conclude, the level of transportation is a reliable indicator of development
for every nation. Therefore, basically, the development of transportation sectors is
critical characteristics and very important at multiple levels of the nations.
5.1 Suggestion and Recommendation
Sustainable transport is crucial for regional development, linking countries to
regional and global markets, promoting trade opportunities and stimulating economic
growth. In many regions, however, developing countries may lack strong institutions,
sufficient financial and human resources, and the specialized expertise needed not
only to develop and effectively deploy sustainable transport systems but also to

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implement them in a coherent way along with other elements, such as urban and land
planning and intermodal transport connectivity including air transport and logistics.
Addressing these challenges by building local, national, and regional capacity
across all levels of government, jurisdictions, organizations, and modes is as important
as developing the necessary infrastructure. This notion is also reflected in SDG 17 of
the 2030 Agenda, which aims to strengthen the means of implementation and
revitalize the global partnership for sustainable development.
In addition, policies, strategies, and other measures that leverage integrated
regional transport connectivity for economic growth, while at the same time, enabling
progress towards a sustainable and low-carbon development path should be promoted.
Finally, regional and interregional economic integration and cooperation should be
promoted such as improvements to the planning of transportation infrastructure and
mobility, connectivity enhancements and facilitation of trade and investment.

REFERENCES

https://impoff.com/importance of transportation

https://www.marketing91.com/importance of transportation

https://impoff.com/importance-of-transportation

https://transportgeography.org/contents/chapter3/transportation-and-economic-
development/

https://www.marketing91.com/importance-of-transportation/

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