Transport improvements usually increase the scale and scope of economic (mostly for freight) and social interactions (mostly for passengers). There is a wide range of economic benefits conveyed by transportation systems, some direct (capacity and efficiency), some indirect (accessibility and economies of scale), and some induced (multipliers and opportunities). They are impacting transport supply and demand as well as the economy:
- Direct Impacts. The direct benefits are mostly related to capacity and efficiency improvements that impact users and operators, particularly in terms of time and cost savings. Corporations involved in the provision of transport services earn an income and pay wages to their employees.
- Indirect Impacts. The indirect benefits mostly relate to accessibility gains and better economies of scale. While employers and the retail sector (as well as other activities such as institutions) gain better access to labor or customers, the customers of freight transport services (distribution centers, manufacturing, retailers) derive some productivity gains that are the outcome of better transport services. Landowners also usually derive higher rents from the increasing intensity of passenger and freight traffic taking place in the vicinity. Both passenger and freight traffic also convey additional demands for goods and services (e.g. fuel, maintenance, repairs, insurance). Freight-related activities also benefit from a wider range of suppliers for their inputs and markets for their outputs.
- Induced Impacts. The induced benefits are mostly related to economic multipliers and increased opportunities. Society benefits from increased mobility since individuals have a wider range of options for their activities and the associated social opportunities (education, social interactions, leisure). An economy usually becomes more competitive, attracts new and expanded economic activities, and has more complex distribution networks. At this level, transportation becomes a factor in promoting economic competitiveness.
The question remains about what is the extent of the economic benefits for specific modes and locations.