9.2 – Transport Planning and Governance

Authors: Dr. Jean-Paul Rodrigue, Dr. Theo Notteboom and Dr. Brian Slack

Transport planning focuses on the public provision and financing of transportation assets, particularly roads and public transit systems.

1. The Purpose of Planning

“Long-range plans engender the dangerous belief that the future is under control.”

Max Gunther

Transport planning usually addresses specific problems or broad transport concerns at a local level and has been traditionally a preoccupation of lower-tier governments (state, county, municipal). Because of this fact, transport planning is most developed in the urban sphere, and it is there where most experience has been gathered. The planning process, however, has several similarities with the policy process. Identifying a problem, seeking options, and implementing the chosen strategy are also essential steps in planning. Because it deals with localized problems, the solutions adopted in transport planning tend to be much more exact and specific than policy directives.

The common perspective is that planning is the realm of the public sector, although the private sector owns and operates substantial transportation assets. This implies that planning can be undertaken by private transport actors, such as carriers, to manage their assets at a scale beyond that of the public sector. The time horizon is an important part of the planning process:

  • Strategic planning. A high-level long-term planning horizon that relies on strategic plans implementing a vision. They tend to be capital-intensive and focus on developing large transport infrastructures like highways and terminals. Strategic planning recognizes a problem, such as the lack of capacity, and elaborates remediation policies and strategies. Policies can evolve due to economic and technological changes, so an adaptable strategic planning environment is necessary.
  • Tactical planning. Involves both financial and strategic planning, often reported through business plans. Budgeting for allocating resources to specific activities and projects is part of the financial planning process. The time horizon usually involves three to five years and allocates resources to different activities to meet specific objectives. This assumes a competitive environment in which the allocation of resources will affect the structure and level of demand.
  • Operational planning. Involves decisions solving practical problems related to transport operations, usually within a year. The time horizon is too short to allow significant changes in the transport supply, such as by infrastructural investments, but allows for the allocation of mobile assets such as vehicles.

Three basic approaches can be identified concerning the hierarchical decision structure of the planning process:

  • Top-down planning. The government or a related authority sets the strategic goals and prepares plans. On the positive side, such an approach can offer a comprehensive and long-term perspective to transport planning. The main issue is the potential for conflicts with stakeholders as they may not agree with the nature, the allocated resources, or the implementation of the planning goals.
  • Bottom-up planning. Stakeholders such as carriers and operators are the main drivers of the planning process by providing actionable input. The government or related authority uses these inputs to create a strategic plan with limited oversight. One advantage is that the planning process effectively reflects the goals of the core stakeholders and market potential, leading to support. However, such an approach may be subject to capture by special interest groups and opportunistic behavior taking advantage of public funds to develop projects of limited value.
  • Hybrid planning. The government or related authority sets the strategic intent of the planning process and asks stakeholders to propose projects supporting the main goals. The process involves a form of consensus, which can be a structured confrontation between different interests. Hybrid planning seeks a balance between macroeconomic objectives and microeconomic goals.
The Time Horizon and Decision Structure of Transport Planning

Conventionally, planning was a field dominated by engineers who gave it a distinctly mechanistic character. The planning process was considered a series of rigorous steps to measure likely impacts and propose engineering solutions and their financing. For instance, there were four major steps in this standard approach applied to urban transport planning; trip generation, trip distribution, modal split, and route selection. Planning evolved to rely on mathematical models, including regression analysis, entropy-maximizing models, and critical path analysis that are part of custom-designed software or, more generally, used as components of Geographic Information Systems.

There are many reasons why the results of these models should be treated with caution:

  • They are only as good as the data they manipulate, and often the data is inaccurate or incomplete. The requirement for data has led to complex and costly collection processes, often delaying decisions.
  • They are based on assumptions that the mathematical relationships between variables remain constant. Socioeconomic and technological changes often change assumptions.
  • They can be manipulated to produce the outcome that would be the most preferred by the actors promoting policy or a project. For instance, only specific scenarios can be considered, and negative conditions are not allowed to be data points.
  • Because the predictions were rarely subjected to subsequent evaluation, their validity is largely questioned. In this context, models will attempt to predict the future since projections rarely question the validity of the methodology, even when they turn out to be highly inaccurate.
The Prediction of Future Outcomes
Common Flaws in Forecasting
Vicious Circle of Congestion

The predictions of future traffic levels produced by the four-stage sequence are then used to identify urban planning options. Since the most common prediction of the modeling is that present capacities will be unable to cope with expected traffic growth, the tendency has been to produce planning solutions that call for expanding capacity. This has been referred to as predict and accommodate. It is the solution that has typified much of the urban transport planning from the 1940s to the 1980s. It has given rise to the expansion of highway construction that reinforced the dominance of the automobile. Rarely postmortems of the prediction models are undertaken. As it was learned through empirical observations, the issue of induced demand has distorted traffic outcomes since additional capacity incites additional traffic.

2. Contemporary Transport Planning

Planning is commonly scale-specific and multidimensional. In cities, traffic problems have increased significantly since the 1970s, despite a great deal of urban transport planning. There is a growing realization that perhaps planning has failed, and the wrong questions have been asked. Rather than estimate traffic increases and then provide the capacity to meet the expected growth, it is now accepted that what is required is better management of the transport system, particularly maintenance, through new approaches to planning. Just as urban planning requires the input of many specialists, transport planning uses a multi-disciplinary perspective to broaden the scope of the planning process. Planning is still a multi-step process, but it has changed considerably:

  • Goals and objectives. While the goal of traditional transport policy, improving accessibility, is still valid, it must be considered in the context of other desirable goals. For instance, improving safety and health, reducing vehicle emissions, improving equity, enhancing economic opportunities, improving community livability, and promoting mobility are all valid. However, the prioritization of goals results in a very different planning process. Defining goals becomes a much more complicated stage in contemporary planning and can lead to conflicts. Increasingly, goals have turned to consider managing demand rather than trying to build capacity.
  • Options. Given the possible range of goals that transport planners must consider, providing a set of possible options becomes necessary. Several objectives may be desirable, and thus, it is important to consider what they imply. Several scenarios may have to be considered, and they must become important components of the planning process.
  • Identification of actors, institutions, and stakeholders. Given that transport planning has the potential to influence so many elements of society, it is important that those affected by the transport problem and its potential resolution should be identified so that they can be engaged. This would be a much broader list of affected parties than those involved in transportation activity and requires recognizing a role for citizen participation. Failure to do so runs the risk of a project meeting significant opposition from stakeholders perceiving that they have been left out or can be negatively impacted.
  • Predicting outcomes, identifying benefits, and assessing costs. The stage of predicting the outcomes for each of the options is a critical step in the process. Models continue to play an important role, but whereas the traditional models were based on the number of trips, modeling is increasingly becoming more activity-based. Urban transport is seen in the context of scheduling household decisions in time and space. Demographic and social data are used extensively, and mathematical models have become more sophisticated. Nevertheless, there are roles for other types of analyses, including non-objective forecasts. The predicted outcomes must then be assessed as to their benefits and costs. These may be expressed in monetary terms, but many transport planning situations call for measurement in other terms, such as visual effects, environmental externalities, and employment impacts.
  • Choosing a course of action. Evaluation of the scenarios must consider the costs and benefits from the frequently conflicting perspectives of the stakeholders and actors. Extensive public consultation may be required, potentially creating delays. The information must be disseminated and explained so an informed public can participate in the debate. Ultimately, it will be the politicians who decide. Still, they are swayed by the strength of the arguments presented by the transport professionals and, in publicly contentious cases, by pressure from interest groups.
The Transport Planning Process

The vast preponderance of transport planning, particularly at the urban level, has been devoted to passengers involving road transportation and public transit. The automobile and public transit issues have preoccupied planners since individual mobility can be highly political; drivers and users are also voters. Yet, the mobility of freight represents a significant part of many problems that planning seeks to address. Planning for freight movements, such as city logistics, is emerging. As a large private sector activity, it is difficult to control, and the industry itself makes many of the decisions that affect trucking. The emergence of large distribution centers on the outer fringes of metropolitan areas is taking place without much public control or oversight. This also involves large freight transport terminals such as ports, rail yards, and airports with freight activity, often under the jurisdiction of a separate authority responsible for planning.

The models and data used in transportation planning are of limited relevance when applied to the mobility of freight. For example, demographic data, such as household size, the backbone of passenger analysis, are irrelevant to freight flows within the manufacturing sector. However, it matters for home deliveries. The bi-polar daily peak of traffic movements applies only to passengers, freight movements being distributed in a different profile over a 24-hour period. Therefore, a more comprehensive freight planning process is emerging. In many cities, there is limited data on freight traffic, so planning takes place ad hoc. A much greater focus on freight planning is required since freight distribution is an important component of urban mobility and activities, with facilities such as distribution centers, ports, airports, and rail yards important components.

Typical Car and Truck Trips Distribution by Time of the Day
Trips by Public Transport in the United States 1903 2019

3. Transport Demand Management

In questioning the paradigm of building capacity, transport planners have turned increasingly to managing both demand and the transport system. Building roads has produced a car and truck-oriented society that can constrain modal alternatives. Car ownership is beyond the ability of the transport planner to control directly, and the question remains if this should be the case. Still, land use and density affect car use and ownership, both elements that planners can affect. High population densities favor walking, bicycling, and public transit use. This is why that a great deal of attention in planning is being paid to densification and integration. This includes concentrating development along well-served transport corridors (transit-oriented development) and increasing densities in areas undergoing rehabilitation.

Managing the demand for transport is made up of a large number of small interventions that cumulatively can impact demand but, in particular, improve the livability of cities. A sample of well-practiced and successful interventions includes:

  • Park and ride. Parking spaces are provided, usually close to an expressway, where drivers can board public transit (e.g. buses or light rail) that provide service to the city center. This has become a staple feature in the outer zones of many North American and European cities. Its success is variable, however, and there is some evidence that park and ride may increase car use, as people who may have used regular bus services now use their cars to drive to the car parks.
  • Traffic calming. Measures that seek to reduce the speed of vehicles in urban areas, such as speed bumps and street narrowing. For residential streets, the goal is to make their use by drivers unattractive because of the obstacles. For thoroughfares, the objective is to reduce the average speeds. The measures indicate the need for much greater attention to street design and layout.
  • Priority lanes for buses and high occupancy vehicles and truck routes. Lanes on major thoroughfares and expressways can be reserved for buses, taxis, and passenger vehicles with several occupants. This has become an essential feature of transport planning in North America, where major highway expansion projects offer priority lanes. The goal is to encourage the use of buses and high occupancy vehicles that can be seen to travel at higher speeds along the reserved lanes by other drivers who may be stuck in traffic jams. The setting of truck routes allows for better segregation between passengers and freight traffic and more fluidity in traffic flows.
  • Teleworking and alternate work schedules. Encouraging work hours other than the dominant 9 to 5 schedule. One of the most salient problems in transport planning is that demand is concentrated in two main peak periods. In the past, efforts were made to meet this demand by increasing road capacity, which resulted in the under usage of the off-peak capacity. Promoting flexible schedules and encouraging teleworking are policies that seek to spread out the demand for transport over more hours and even reduce the demand altogether. The Covid-19 pandemic underlined the potential and feasibility of teleworking, particularly in roles requiring information technologies.
  • Promoting micro-mobility. In some countries, particularly the Netherlands, the bicycle is an important mode of travel. Walking, cycling, and other forms of micro-mobility, such as electric bikes and scooters, are energy efficient and encourage physical activity. However, in automobile-dependent cities, micro-mobility is difficult to integrate with trucks and cars. Encouraging greater use of micro-mobility requires significant planning adjustments, such as providing sidewalks, reserved lanes, charging stations, and bike stands.
  • Car or ride-sharing. Conventionally, such schemes encouraged drivers to share car use with neighbors or co-workers when their mobility coincided. Information technologies have enabled the extension of car-sharing schemes to a wider base of ride-sharing through platforms that reconcile drivers offering mobility and users.
  • Enhancing pedestrian areas. In many areas of high population density, the quality of life (enhanced safety, less pollution, etc.) and the visual attractiveness of streetscapes can be enhanced by excluding vehicles from streets altogether or limiting access to public transport vehicles. In Europe, this has become a distinctive feature of the historic cores of many cities.
  • Improving public transit. Public transit use has declined in most cities. Yet it is the only alternative to the car in these cities, and thus enhancing the use of transit has become a major planning objective. Improvements include making transit more attractive by improving bus schedules and the appearance and comfort of transit vehicles and stations. At the same time, efforts are underway to widen the range of transit alternatives. These include extending commuter rail services and constructing new systems such as light and heavy rail modes.
  • Parking management. Restricting on-street parking and charging higher rates for parking. This also applies to the parking of delivery vehicles, which has become an important issue with the growth of e-commerce and the associated home deliveries.

4. Pricing

While planning interventions may positively affect transport demand, a more direct approach involving imposing more stringent cost measures on users can be an option. For instance, it is widely accepted that car users pay only a small proportion of the actual costs of their vehicle use. Economists argue that users should bear the external costs of their mobility. As rational as this argument may be, there are several problems with its application:

  • First, there are difficulties in measuring externalities, with considerable variations in estimates between different studies. Different types of use, speeds, engines (internal combustion engines and electric), vehicle weight, or driving conditions, make it challenging to produce broadly accepted values. Decision-makers have difficulty in agreeing to impose charges when there is a diversity of evidence about external costs.
  • Second, there are practical difficulties in collecting these costs. One of the easiest and most widely used methods is a gasoline tax. However, it is a crude approach because it imperfectly distinguishes between driving conditions and engine type. A fuel-efficient vehicle may have just as high consumption in heavy urban traffic as a less efficient vehicle in a rural setting. The growth in alternative fuels, such as electric vehicles, will further challenge fuel taxes.
  • Third, is the political difficulty of imposing such additional costs on the public. Free access to roads tends to be seen as a right, and it is intensely unpopular to propose any new forms of revenue generation that hint at additional taxation.

The use of pricing mechanisms trends toward the greater application of some forms of tolling is accelerating. Congestion pricing (or cordon pricing) has been applied in several jurisdictions where access to certain areas, usually the CBD, is tolled. A seminal application was the decision to charge private vehicles for entry into Central London in early 2003. Despite a great deal of opposition, this program has proved successful. Other cities, such as Stockholm (2007) and Milan (2012), implemented similar schemes. However, such strategies can be unpopular, as in the case of New York, which was initially proposed in 2007 and approved in 2019 but subject to delays in its implementation. As of 2023, it was still to be implemented. The commonality of congestion pricing applied to central areas concerns high density and limited transport capacity, such as parking spaces (high cost of parking), creating high demand and the willingness of users to pay for access. An even more drastic example is Singapore, where extreme measures limiting car purchases, high vehicle licenses, electronic tolls on highways, and cordon pricing in the downtown area have restrained car use.

Another form of charging is the imposition of tolls on new highways and bridges. In North America, the public had become used to the notion that highways are free of access, a legacy of the Interstate Highways Act, primarily funded by Congress. The legislation now permits private companies to build and operate private roads and bridges and to collect tolls to cover costs. A similar trend applies to developing economies such as China, where many new highways and bridges are toll-based to recover capital investments. A common trend, irrespective of the context, is that any new highway project will likely include tolls.

With congestion pricing, certain highway lanes are tolled at variable rates. When traffic is moving freely, there are no charges for the tolled lanes. But as traffic builds up and speeds are reduced, such as during peak hours, the costs of using the reserved lanes increase. The collection of the tolls is electronic, and drivers are informed of the current charges by large signs. Therefore, drivers are given a choice to stay in the slower lanes for free or move to the tolled lanes at a cost that is proportionate to the speed on the congested lanes. In the ride-sharing sector, congestion pricing mechanisms are also applied (surge pricing), particularly when demand exceeds supply. As fares increase, more drivers are incited to provide ride-sharing services, and users consider postponing their trips until an equilibrium is reached.

Congestion pricing schemes are not just the purview of road transportation. Early in its history, commercial aviation saw the implementation of higher landing fees at congested airports, particularly during peak hours. An outcome was to use higher capacity aircraft, push general aviation away to smaller airports, and generate more revenue to improve facilities. Ports, canals, and waterways can also use forms of congestion pricing, such as the Panama Canal, that offers the opportunity to book a certain number of daily passage slots at a higher rate to be guaranteed a specific time window. There is even an opportunity to book a high-priority passage at a very high cost compared with the regular toll.

5. Governance in Transportation

Transport policy and planning require governance, which is associated with the practical usage of existing resources as well as the allocation of new resources, such as investments. Like all sectors of activity, transportation has a unique set of characteristics about its governance as both the public and private sectors are actively involved.

Governance concerns the ownership and management of assets and resources to fulfill goals such as profit or welfare through the exercise of authority and institutional resources. It concerns the public as well as the private sectors but tends to apply differently depending on if public or private interests are at stake. In both cases, a significant concern is performance, which is how effectively available assets are used.

The governance of transport infrastructure is particularly relevant because of its strategic, economic, and social importance and the cross-jurisdictional character of many infrastructures, such as highways, rail, and telecommunication networks. Transport is not a mere convenience but a fundamental infrastructure that must systematically and continuously be available to its users. This is where governance plays the important role of ensuring continuity in operations. Effective governance is complex to assess since it is not linked with a specific governance structure, but generally conveys several advantages:

  • Confidence. It provides confidence that an activity, such as a terminal, a transit system, or a logistics zone, is effectively managed. This can involve daily operations as well as the planning, design, and funding of new infrastructure. Effective governance is linked with consistent and reliable services as well as a good level of responsiveness and feedback when an unexpected issue arises.
  • Capital costs. Lowers capital costs as investors and financial institutions have confidence that the allocated capital will be effectively used to develop and expand productive assets, generating returns. Avoiding wasteful investments and practices tends to attract private capital.
  • Competitiveness. Improves the capability to compete through the retention of existing users and the attraction of new ones. This can take many forms, such as lower costs, but factors such as clear expectations and transparency are also significant. Keeping market considerations constant, organizations with better governance are usually more competitive than organizations with less effective governance.
  • Stability. It confers long-term resilience in the organization, providing stability in capital markets and the financial institutions supporting them. Many transportation infrastructures have a long life span that can be more effectively managed with a stable long-term governance structure.

For transport infrastructures such as port terminals, airports, highways, inland ports, or logistics zones, many different forms of governance are in place, which shape modes of financing, operations, functioning, and external relationships. This includes mechanisms and options for the respective roles of public and private actors in the ownership, management, and operation of transport infrastructure and terminals. This is particularly important as large transport infrastructure involved in global flows of passengers and freight that are complex, capital intensive, and of strategic importance to the economic welfare of regions. Therefore, the capital intensiveness and the long life span of transportation infrastructures underline the need for effective governance to ensure that the infrastructures are adequately funded, maintained, operated, and expanded.

There are two main components of transport governance; ownership and operations. Ownership involves who is the owner of the terminal site and facilities (including equipment):

  • Public ownership. Common because of the economic and strategic importance of many terminals. In several jurisdictions, passenger railroads are owned by the national government, and the passenger stations are thus under the control of the state-owned railway company, as is the case in China, Europe, and North America. Public ownership of ports and airports is also prevalent and can occur at the state or municipal levels of government. Under public ownership, investment in infrastructure and planning future expansion is carried out by the public authority using public monies or public guarantees for capital borrowed from private markets. The private sector is then offered leasing opportunities through concessions in which terms and duration can be negotiated.
  • Private ownership. Less evident in transport terminals, but there are numerous exceptions for specific modes. Examples include road freight (distribution centers), rail freight transport in North America (terminals and rights of way), and where privatization has taken place in ports and airports in the United Kingdom and New Zealand. Here, private capital is used to provide infrastructure.

Operations involve the day-to-day management and carrying out of terminal activities:

  • Public control. This is typical in many ports, state-controlled railroads, and publicly-owned airports. In these cases, the public authority provides the handling equipment, contracts with the labor force, and operates the rail, airport, and port terminals.
  • Private companies. Manage and carry out operations in privately owned terminals. They are also active operators in many publicly owned facilities under a concession agreement. The latter is a growing trend in ports and airports, where facilities are leased to terminal operators for fixed terms. The types of concessions vary considerably in terms of duration and conditions. Some are short-term, a few years or so; more typically, they are long-term concessions of 15 to 30 years. In some, the owner provides equipment, such as gantry cranes in ports. In others, concession holders are expected to invest in equipment. In some, they are required to use public employees, while in others, they may use their own workers.
Lifespan Life Cycle of Main Transport Assets
Public and Private Roles for Transport Infrastructure and Terminals
Container Terminals of the Worlds Major Port Holdings 2019

Public ownership and operations have been important in many modes because of the strategic importance of transport and the long-term investments required that the private sector may be incapable or unwilling to make. In this way, the terminals can be owned and operated as public goods and integrated with regional and national economic policies. On the other hand, public facilities are seen as slow to respond to market conditions, with a propensity to over-invest in non-economic developments, and with high user costs. The default commonly leaves the governance structure as it is since inertia is the usual norm for managing large infrastructures.

Related Topics

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