1.4 – The Setting of Global Transportation Systems

Author: Dr. Jean-Paul Rodrigue

Global transportation systems emerged in the 20th century, particularly with the internal combustion engine, the jet plane, and the container.

1. Transportation in the Fordist Era (1920-1970)

The adoption of the assembly line epitomized the Fordist era as the dominant form of industrial production, an innovation that substantially benefited transportation. The internal combustion engine, or four-stroke engine by Daimler (1889), which was a modified version of the Diesel engine (1885), and the pneumatic tire (1885) by Dunlop made road vehicles operations faster and more comfortable. Compared with steam engines, internal combustion engines have a much higher efficiency by using a lighter fuel; petrol. Petrol, previously perceived as an unwanted by-product of the oil refining process, which was seeking kerosene for illumination, became a convenient fuel for the emerging land transport system. Initially, diesel engines were bulky, limiting their use to industrial and maritime propulsion, a purpose which they still fulfill today.

The internal combustion engine permitted extended flexibility of movements with fast, inexpensive, and ubiquitous (door to door) transport modes such as automobiles, buses, and trucks. Mass producing these vehicles changed the industrial production system considerably, notably by 1913, when Ford began producing the Model T car using an assembly line. From 1913 to 1927, about 15 million Ford Model Ts were built, making it the second most-produced car in history behind the Volkswagen Beetle. Economies of scale realized along the assembly line were passed on to the consumer, making the automobile even more affordable and popular. The rapid diffusion of the automobile marked an increased demand for oil products and other raw materials such as steel and rubber. This led to the creation of large manufacturing clusters.

Economies of scale also improved transportation in terms of capacity, which enabled to move low-cost bulk commodities such as minerals and grain over long distances. The process was, however, slow to start as cargo ships required large amounts of labor to be loaded and unloaded. This technical limitation informally imposed a limit of 10,000 deadweight tons to break-bulk cargo ships that will remain as such until containerization began in the late 1950s. Still, the gradual growth of international trade and particularly World War II gave a strong impetus for shipbuilding. The end of the war left an ample supply of military cargo ships, namely Liberty Ships, which could be cheaply used for commercial purposes and became the workhorses of global trade until the 1960s. Oil tankers are a good example of the application of the principle of economies of scale to transport larger quantities of oil at a lower cost, especially after WWII, when global demand surged. Maritime routes were thus expanded to include tanker routes, notably from the Middle East, the dominant global producer of oil. The very long distances concerned in the oil trade favored the construction of larger tankers. In the 1960s, tanker ships of 100,000 tons became available, to be supplanted by VLCCs (Very Large Crude Carriers) of 250,000 tons in the 1970s and by the ULCCs (Ultra Large Crude Carrier) of 550,000 tons at the end of the 1970s.

What remained a challenge was the loading and unloading of cargo, which remained unchanged. Loading items such as amphorae, barrels, bags, or crates was slow and labor-intensive. Unitization, where batches of break-bulk cargo could be combined into one handling unit, was difficult to achieve because of the volume and weight limits that could be handled manually. Since antiquity, amphorae were used as load units but had limitations for carrying goods other than bulk. Technical advances such as using ropes for bundling cargo provided some improvements, but methods and productivity remained similar. From a material handling perspective, a port of the late 19th century would be difficult to differentiate from a port of the 17th century. The cost of loading and unloading a ship could easily account for up to three-quarters of the total maritime transportation costs.

The pallet became the first effective load unit, particularly after the invention of the forklift in 1937. Pallets permitted better handling of goods as they could be more effectively managed and stored. By the early 1930s, about three days were required to unload a rail boxcar containing 13,000 cases of unpalletized canned goods. With pallets and forklifts, a similar task could be done in about four hours. It was during World War II, however, that the massive adoption of pallets as the standard supply unit load by the US military, permitted fast handling of goods and turnaround of transport assets. This underlined the growing importance of efficient transportation systems in the competitiveness of nations, let it be for commercial or military gain.

Although the first balloon flight took place in 1783, due to the lack of propulsion, no practical applications for air travel were realized until the 20th century. The first propelled flight was made in 1903 by the Wright brothers and inaugurated the era of air transportation. The initial air transport services were targeted at mail since it was a type of freight that could be easily transported, and due to technical limitations in carrying capacity initially proved to be more profitable than transporting passengers. 1919 marked the first commercial air transport service between England and France, but air transport suffered from limitations in terms of capacity and range. Several attempts were made at developing dirigible services with Atlantic crossed by a Zeppelin dirigible in 1924. However, such technology was almost entirely abandoned in 1937 after the spectacular Hindenburg accident, in which the hydrogen-filled reservoirs of the dirigible burned. The 1920s and 1930s saw the expansion of regional and national air transport services in Europe and the United States with mass-produced propeller aircrafts such as the Douglas DC-3.

Through the first half of the 20th century, the Atlantic remained an important technical challenge for long-distance transportation modes since it linked large markets in Europe and North America. The post World War II period was the turning point for air transportation as the range, capacity, and speed of aircraft increased as well as the average income of the passengers. A growing number of people were thus able to afford the speed and convenience of air transportation. The application of the gas turbine principle led to the development of jet engines. 1952 marks the beginning of commercial jet services with the Comet, but a design flaw grounded the plane the following year. In 1958, the first successful commercial jet plane, the Boeing 707, entered into service and revolutionized international movements of passengers, marking the end of passenger transoceanic ships (liners) and replacing propeller planes for long-distance services. The jet plane enabled the setting of time-dependent trade relations between producers across the world (such as electronics), created a long-distance market for perishables (fruits, vegetables, flowers), and supported the development of mass tourism.

Basic telecommunications infrastructures, such as the telephone and the radio, were mass-marketed during the Fordist era. However, the major change was the broad diffusion of the automobile, especially from the 1950s, as it became a truly mass consumption product and when the first major highway systems, such as the American Interstate, began to be built. No other modes of transportation have so drastically changed lifestyles and the structure of cities, notably for developed countries. It created suburbanization and expanded cities to areas larger than 100 km in diameter in some instances. In dense and productive regions, such as the Northeast of the United States, Western Europe, and Japan, the urban system became structured and interconnected by transport networks to the point that it could be considered as one vast urban region; the Megalopolis.

2. A New Context for Transportation: The Post-Fordist Era (1970-2000s)

Among the significant changes in international transportation from the 1970s are the massive development of telecommunications, the globalization of trade, more efficient distribution systems through the application of logistics, and the considerable development of air transportation.

Telecommunications enabled growing information exchanges, especially for the financial and service sectors. After 1970 telecommunications successfully merged with information technologies. As such, telecommunication also became a medium of doing business, in addition to supporting and enhancing other transportation modes. The information highway became a reality as fiber optic cables gradually replaced copper wires, multiplying the capacity to transmit information between computers. Global submarine cable networks, which have existed since the setting of telegraph networks in the 19th century, were overhauled with fiber optics to become the backbone of the global telecommunication system, particularly the internet. However, this growth was dwarfed by the tremendous growth in the processing power of personal computing devices, which are now fundamental components of economic and social activities across the world. A network of satellite communication was also created to support the growing exchanges of information, especially for television images, but remains of marginal use because of lower bandwidth. Out of this wireless technology emerged local cellular networks that expanded and merged to cover whole cities, countries, regions, and then continents. Telecommunications have reached the era of individual access, portability, and global coverage, enabling global media systems.

The diffusion of railways in the late 19th and early 20th centuries considerably improved the efficiency of inland transportation. However, the growth of trade and the economies of scale provided by railways placed additional pressures on ports where the bottleneck was the interface between maritime and inland transport systems. Containers were introduced by the American entrepreneur Malcolm McLean who initially applied containerization to land transport but saw the opportunity of using container shipping as an alternative to acute road congestion in the early 1950s before the construction of the first Interstate Highways. The first containership (the Ideal-X, a converted T2 oil tanker) set sail in 1956 from New York to Houston and marked the beginning of the era of containerization.

Before the introduction of containers, loading and unloading at ports could account for between 50% and 70% of the cost of break bulk shipping. Containers, the main agents of the modern international transport system, enabled increased flexibility of freight transport, mainly by reducing transshipment costs and delays; handling a container requires about 25 to 40 times less labor than its equivalent in bulk freight. Loading and unloading operations that required days could now be done in a matter of hours. The first containerships were spending about 18% of their operational time at ports while a breakbulk ship would spend 40%. From a cost perspective, the cost of loading and unloading cargo went from about $5 per ton for breakbulk cargo to about 15 cents per ton with containers. This enabled further the unitization trend brought forward by the pallet, particularly since pallets could be loaded into containers. The initial attempts at containerization thus aimed are reducing maritime transshipment costs and time. Later on, the true potential of containerization became clear when interfacing with other modes became an operational reality, mainly between maritime, rail, and road transportation.

In 1960, the Port Authority of New York and New Jersey, foreseeing the potential of containerization, constructed the first specialized container terminal next to Port Newark; the Port Elizabeth Marine Terminal. Unlike conventional break bulk operations that required storage sheds adjacent to piers, containerization requires large paved open spaces for container storage. The Sea-Land Company established the first regular maritime container line in 1966 over the Atlantic between North America and Western Europe. It took more than a decade for the container to become a standardized form of maritime shipping as ports and shipping lines were initially reluctant to provide the required capital investments. By the early 1980s, container services with specialized ships (cellular containerships, first introduced in 1968) became a dominant aspect of international and regional transport systems, transforming the maritime industry. However, the size of those ships remained for 20 years constrained by the size of the Panama Canal, which de facto became the Panamax standard. In 1988, the first post-Panamax containership was introduced, an indication of the will to further expand economies of scale in maritime container shipping. The container revolution was concomitant with globalization by supporting an increasingly complex system of trade involving parts, manufactured goods, and even commodities. Few other transport innovations had such an impact on the global economic landscape.

Air and rail transportation experienced remarkable improvements in the late 1960s and early 1970s through massification and network developments. The first commercial flight of the Boeing 747 between New York and London in 1969 marked an important landmark for international transportation, mainly for passengers. Still, air freight became a significant economic function of air transportation in the 1980s. This giant plane could transport up to 400 passengers, depending on the configuration. It permitted a considerable reduction of airfares through economies of scale and opened intercontinental air transportation to the mass market. Attempts were also undertaken to establish faster than sound commercial services with the Concorde (1976; flying at 2,200 km/hr). However, such services proved to be unprofitable, and no new supersonic commercial planes have been built since the 1970s. The Concorde was finally retired in 2003 but the setting of supersonic passenger services remains a market that can be developed. At the regional level, the emergence of high-speed train systems provided fast and efficient inter-urban services, notably in France (1981; speeds up to 300 km/hr) and in Japan (1964; Shinkansen; speeds up to 275 km/hr). Later, high-speed services were expanded in Europe, and more recently, high-speed train systems were constructed in China, Korea, and Taiwan.

3. The Setting of Global Mobility Systems (2000s-)

While transportation allowed to trade raw materials and finished goods, it also allowed making better use of the comparative advantages of regions. In the first half of the 20th century, the setting of regional manufacturing clusters specializing in sectors such as transport equipment, textiles, or foodstuff became prevalent. By the second half of the 20th century, trade liberalization and the formation of economic blocs allowed for the fragmentation of production at the global level. A conjunction of trade liberalization, containerization, and technological innovations modified the operational scale of transport systems and their network structure. The setting of gateways and hubs became particularly prevalent, leading to an extended scale for transportation that reflects commercial considerations less subject to political or regulatory constraints. This particularly impacted air transport systems with a network hierarchy of services ranging from regional services with hub-and-spoke networks to globally interconnected city pairs.

The increasing efforts to manage freight and reinforced the development of logistics and global supply chains. Major transportation equipment manufacturers, particularly car manufacturers, became dominant actors of transnationalism. Even if the car is not an international transport mode, its global diffusion has expanded the global trade of vehicles, parts, raw materials, and fuel (mainly oil). Car production, which used to mainly take place in the United States, Japan, and Germany, became a global industry with a few key players part of well-integrated groups such as Ford, General Motors, Hyundai, and Toyota. Car manufacturing is a supply chain intensive industry associated with the circulation of parts within manufacturing clusters. Although manufacturing clusters emerged in the first half of the 20th century, by the 21st century clusters became prevalent across a wide range of activities and locations. Accessibility and connectivity offered by intermodal transportation allowed for the setting of logistics clusters nearby terminal facilities. These clusters became the regulators and coordinators of distribution systems spanning large regions.

Transportation systems at all scales are being transformed by their integration with information technologies, a process also known as the digitalization of mobility, leading to a higher level of integration between modes as well as the automation of transportation operations. This is related to the fourth industrial revolution, impacting mobility and global value chains. To remain competitive, corporations that were created in earlier parts of the industrial revolution needed continuously to adapt their business model considering technological innovations and the business opportunities they provided. The historical evolution of transportation is, therefore, strongly associated with the evolution of economic, social, and managerial processes.

The global transportation system is marked by growing infrastructure, economic and environmental constraints, leading to the search for alternatives. Transportation modes have a dependence on fossil fuels, and second, road transportation has assumed dominance and being increasingly congested. The general rise in oil prices since the 1970s induced innovations in transport modes, the reduction of energy consumption, and the search for alternative sources of energy (electric car, adding ethanol to gasoline, hybrid car, and fuel cells). Still, the reliance on fossil fuels continues with particularly strong growth of motorization in developing economies.

Since the onset of the Modern Era in the 15th century, transportation has played a significant role in the development of the global economy. Like most technological innovations, transportation innovations take place in waves that reflect the cumulative development of infrastructures. Although each wave played out differently, developed economies such as Europe and the United States, first saw the setting of canal systems, which were then complemented by rail transport systems. Later, the internal combustion engine supported the development of extensive road systems. From the 1950s of air transport systems developed to service regional and international markets. With containerization, the global transportation system further evolved to support global supply chains.

Related Topics


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