Exam 2: Transportation: The Critical Link in the Economy

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Modalsplit is an analytical tool used to study and analyze the total transportation market for passenger and freight transport according to volume and mode.For passenger transportation more than 77 percent of the passenger mile traffic is private highway traffic.Since 1970 air travel has decreased in relative cost,as such air traffic passenger miles has increased,but it is still relatively small.Looking at freight,intercity modal split is dominated by trucks.Since 1990,rail share has increased in ton-miles due to the rising cost of fuel,but the lower cost recently has aided motor carriers.

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The initial construction of nearly all transportation infrastructure and their maintenance is supported by the government (with the exception of freight rail service which is largely privately funded).Transportation is key to economic growth and prosperity and impacts all elements of business.Additionally,transportation infrastructure is beyond the ability of anyone industry to fund and maintain.In order to keep industry from acting opportunistically,and avoid market failures the government is also involved in establishing policy and regulation with respect to transportation safety and organization.
The government involvement in transportation may lead to certain drawbacks for some parts of the public.For instance,through right of the eminent domain,if government makes a determination that a certain route is important to societal transportation good,the government can seize personal property.
The transportation network is also important for national defense.The system of national highways mean that the government can quickly mobilize armies from one side of the country to another during a time of conflict.
The maintenance of the existing transportation infrastructure has become a major issue in the 21?? century because of competing demands for public funds such as medical care and national defense.The current situation is a major challenge for future economic expansion.In addition,there is a need for additions or improvements to the infrastructure.