Economic Organisation Transport It provides the initial key for then spatial understanding of Economic activity and also reflects the territorial differentiation of man’s economic activities

Transport and Location Choice Three principles of Spatial Interaction Complementarity ( Supply and Demand) Transferability ( Major factor transport cost ) Intervening Area ( substitution)

Three Principles of Spatial Interaction Complementarity is necessary for any kind of economic spatial interaction to take place. For movement to take place, at least one place must demand something another place can supply, and the demand and supply must be complementary. In other words, not only must one place want to buy what the other can supply, but they must also agree on a price. Transferability is also necessary for interaction to occur. As distance increases, transportation costs rise accordingly. At some point, the costs of transporting a material to a market may exceed the buyer’s ability or willingness to pay. In such circumstance, no transaction is possible Intervening opportunities constrain the level of interaction between two places. Consider the example of walking a mile for a Camel cigarette. Perhaps a nicotine addict would walk a mile for a cigarette if he or she had no other choice. On the other hand, if cigarettes were available at a location only a block away at approximately the same price as in the store located a mile away, it would be most unlikely that the consumer would decide to walk the extra distance when he or she need not do so.

Factors Affecting Transport Cost or Transferability Length of Haul Usually greater the distance greater will be the transport cost but with respect to length of haul the cost per unit decreases with increasing distance. Cost of transportation increases but at a lower rate with distance from point of origin Postage stamp rate at times is used.

Area Characteristics between complementary places Territory between two places or more break of bulk points the transport cost will be affected land, water, air Modes of Transport Ships and barges, trains, trucks, air lines pipelines, human

Nature of items to be shipped Higher value higher transportation charges Volume of Traffic Two ways traffic volume and commodity volume Back haul possibilities Lowers cost of transportation Trade routes and Spatial Interaction Mirrors the economic development

Physical Bases of Economic Activity Climate, Soils, vegetation and Economic Activity Wet tropical Lands and Economic activity Dry lands and economic activity Cool lands and Economic activity The warm temperate lands and economic activity Mountains and economic activity Rivers and economic activity.

ECONOMIC BASIS Principle of Comparative Territorial Advantage Price and Principle of Supply and Demand Scale of Economies and Locational Strategies External Economies and activity Location Transportation Pricing Systems