By Dr. William Oliver Hedgepeth
Faculty Member, Transportation and Logistics Management
I teach a course in transportation economics. These two terms, “transportation” and “economics,” are a metaphor to bridge strategic thinking about transportation as a business model and operational realities. Both terms are a foundation for the five modes of transport: rail, air, truck, sea and pipeline.
I am always on the lookout for books that bridge the gap between what truck drivers must know and what CEOs of transport companies are not sure they know. This textbook, Concepts of Transportation Economics by Canadian professor Barry E. Prentice and American professor and economist Darren Prokop, is one that I would recommend for students at the bachelor’s and master’s degree level.
A Book That Reveals Small Business and Economic Realities
As a former co-owner of a trucking company in Virginia and Alaska from 2006 to 2010, I have a good sense of what truck drivers must know about the transportation business from a small business perspective. Like most small businesses, trucking companies are concerned with creating revenue.
A trucking company is also concerned about operating expenses (trucks, a warehouse and fuel) as well as fines and road taxes from federal or state government or law enforcement agencies, all of which eat away at slim profit margins. The 2008 realities of fuel price surges and the recession taught me an economics lesson.
Teaching Transportation Economics Requires Many Qualities
Teaching transportation economics involves a bit of hand holding, coaching, mentoring and listening. I constantly watch for any slippage in my students’ understanding of economic concepts.
When small business owners are among my students earning a B.A. or M.A. degree in Transportation and Logistics Management (TLMT), they come prepared with stories that often provoke laughter in the group discussions. Those stories are tinged with a bit of fear as the students gaze into the abyss of the term “economics.”
You can almost see their eyes roll as they read the syllabus and start to read the first chapter of their transportation economics text. You sense their hesitation from their initial emails, which say things like, “I put this class off to the very end. I can graduate with my degree if I pass this class. But I am worried I can’t do it.”
As a professor, I wait and watch for such comments to surface. Then I send a personal email to that student assuring them that I am here to guide them through this different language of economics.
A new announcement is posted for week one and maybe week two on the concepts under discussion. Depending on the number of students exhibiting that nervousness, I may produce a YouTube video of me sitting at my desk, telling them these concepts are easy, showing my face, my expression and my compassion. I let them know that we can chat any time during office hours or beyond.
As my university has discovered, constant and daily contact is needed to keep students engaged and reinforce their confidence that they will more than just survive a course in economics and transportation. For example, I was on Skype just today with a soldier stationed in Qatar. It was 8 p.m. his time, afternoon for me. A few minutes of face time, listening and explaining does calm nerves.
This Textbook Provides Commonsense Explanations of Economic Reality
After reading Concepts of Transportation Economics, I was reminded of the books and columns written by American economist Tom Sowell. Jason Riley of The Wall Street Journal wrote that Sowell “could write popular books…that could be understood by people who knew nothing about economics.” That review of Sowell’s works reminded me of how easy it was to read this book.
In my 2017 Skype interview with co-author Dr. Barry Prentice, he describes his book as studying “transportation through the lens of economics.” Prentice sees his book as being more beneficial to business students than to students working on a degree in economics.
Truck driver students should be able to describe the “why” aspect of the intensive competition the trucking industry faces, similar to what I faced as a trucking company owner. Often, the “why” gets lost in the daily tension of getting loads for a short- versus a long-haul contract.
Concepts of Transportation Economics was written for students studying business administration, transportation management, supply chain management or logistics management. It’s ideal for students who drive trucks, work on railroads, handle air cargo, work on merchant marine ships, or lay gas pipelines across the U.S. and Canada.
It is a book for everyone who should know how the language of economics enriches their business and their understanding of the transport business. Concepts of Transportation Economics is a commonsense explanation of transportation and its place in the real-world concepts of economics.
Book Could Serve as Springboard to Future Research for Faculty and Students
Where would faculty teaching transportation economics focus their scholarly research? Look to the transportation network of all cargo movement, which is defined at a strategic level as a hub-and-spoke network. “The tension in the hub and spoke is the place to study,” Prentice says.
Any research of that tension could lead to new discoveries in logistics, transportation and economic theories. Is that hub-and-spoke network about to shift? Yes, it is. Look at the current United States policy on cross-border trade deficits.
The economy is in for a major stress test. Tensions are building that could affect world transportation economics.
In the book, Prentice asserts that “logistics lacks theory.” Even if you disagree with this statement, we should all start thinking about what research is lacking in this field.
About the Author
Dr. Oliver Hedgepeth is a professor in the School of Business. He is the former program director of Reverse Logistics Management and Transportation and Logistics Management. Prior to joining APU, Dr. Hedgepeth was a tenured associate professor of Logistics and chair of the Logistics Department at the University of Alaska Anchorage with a focus on hybrid airship and RFID research. His book, “RFID Metrics,” was published in 2007 by CRC Press and is in revision with CRC Press.
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