Transportation and its modes

sunandaC

New member
TRANSPORTATION

Transportation plays an important role in economic success by allowing for the safe and efficient distribution of goods and services throughout the supply chain. Transportation links the various integrated logistics activities. Without transportation the integrated logistics system breaks down.

Some view transportation as the glue that holds the entire system together. Without the transportation link raw material cannot flow in to the warehouses and plants nor can be finished product flow out of the plant to field warehouses and finally to the customer.

Transportation physically moves the products from where they are produced to where they are needed. This movement across space or distance adds value to products. This value added is often referred to as place utility. Time utility is created by warehousing and storing products until they are needed. Transportation is also a factor in time utility, it determines how fast and how consistently a product moves from one point to another.

This is know as time in transit and consistency of services respectively. If a product is not available at the precise time it is needed, there may be expensive repercussions, such as lost sales, customer dissatisfaction when the product is being used in the manufacturing process.

TRANSPORTATION FUNCTIONALITY

It can be divided in to 2 broad functions namely

(A) PRODUCT MOVEMENT

Where the product is in the form of material, assemblies, work in progress, finished goods transportation is necessary to move it to the next stage of the manufacturing process closer to the ultimate customer. A primary transportation function is product movement up and down, the value chain since transportatation utilizes time , financial and environment resources it is important that items be moved only when it truly enhances product value.
The major objective of transportations to move products from an origin location to a prescribed destination while minimizing time financial and environmental resources cost. Lost and damage expenses must be minimized.



(B) PRODUCT STORAGE

A less common function is temporary storage. Vehicles make rather expensive storage facilities. However if the transit product requires storage but will be moved again shortly the cost of loading and unloading the product in the warehouse may exceed the the per day charge of storage of transportation vehicle. In circumstances where warehouse space is limited utilizing transportation vehicles may be a viable option.

One method would be involving loading product on the vehicle and then have it to take a indirect route to its destination.

Another method is by way of diversion. This occurs when an original shipment destination is changed while the delivery is in transit.


PRINCIPLES OF TRANSPORTATION

There are 2 principles of transportation

1) ECONOMY OF SCALE

This refers to the characteristics that transportation cost per unit of weight decreases when the size of shipment increases. It is also generally true that larger capacity transportation vehicles such as rail or water are less expensive per unit of weight than smaller capacity vehicles like truck and tempo. Transportation economies of scale exist because fixed expenses associated with moving and loading can be spread over the loads weight. The more the load, the less will be the cost per unit weight. The fixed expenses include administrative cost of taking the transportation order, time to position the vehicle for loading and unloading.

2) ECONOMY OF DISTANCE

Refers to the characteristic that transportation cost per unit of distance decreases as distance increases. These principles are important considerations when evaluating alternative transportation strategies. The objective is to maximize the size of the load and the distance that is shipped while still meeting customer service expectations.
FACTORS INFLUENCING TRANSPORTATION COST AND PRICING

Factors influencing transportation cost or pricing can be grouped into 2 major categories namely

• Product related factors
• Market related factors

PRODUCT RELATED FACTORS

1) DENSITY

It refers to a products weight to volume ratio. Items such as steel canned foods, building products and bulk paper have high weight to volume ratios. They are relatively high weight to volume ratios. They are relatively heavy given their size. On the other hand products such as luggage and toys have low weight to volume ratios and thus are relatively lightweight given their size. In general low density products those with low weight to volume ratios tend to cost more to transport on a kilo basis than high density products

2) STOW ABILITY

It is the degree to which a product can fill the available space in a transport vehicle. For example petroleum products in bulk have excellent stow ability because they can completely fill the container in which they are transported. Other items such as automobiles, machinery, livestock and people do not have good stow ability. A products stow ability depends on its size, shape, and other physical characteristics.

3) EASE OR DIFFICULTY OF HANDLING

Difficult to handle products are more costly to transport. Products that are uniform in their physical characteristics require less handling expenses and are therefore less costly to transport.

4) LIABILITY

It is an important concern. Products that have high value to weight ratios are easily damaged and are subject to higher rates of theft, cost more to transport. Where the transportation carrier assumes greater liability higher price will be changed to transport the product.

MARKET RELATED FACTORS

1) degree of intra- mode and inter mode competition
2) Locations of markets, which determine the distance goods, must be transported.
3) Nature and extent of government regulations of transportation carriers.
4) Balance of imbalance of freight traffic into and out of market.
5) Seasonality of product movement
6) Whether the product domestically or internationally.


MODES OF TRANSPORT​

• AIRLINES

Air lines are the fastest terminal to terminal mode of transportation. They specialize in time sensitive movement of documents, perishable items, medical supplies etc. airlines transport small volume shipments and are very cost effective and time saving. They are also the preferred mode for travel passengers. Their services are rarely disrupted mostly due to bad weather conditions.

• MOTOR CARRIERS

They are the most flexible mode of transportation. They provide direct service from shippers to final consumers. They are the second fastest mode of transportation with additional advantage of door to door flexibility and wide coverage. As their trailers can vary in size and can control their temperatures. They can carry almost everything. Their rates are high as compared to other modes of transportation but must less than air. Their problem arises when they have to face bad weather or traffic congestion as they cause an indefinite delay of delivery.

• PIPELINES

Pipelines are a unique mode of transportation. They are fixed in place and the product moves through them. Tons and tons of products in liquid or gaseous state are transported through this method. As the pipeline provide continuous flow of products the materials provided through pipeline reaches destination quickly and keeps flowing continuously. Pipeline delivery is most dependable and remains unaffected by weather changes. This mode of transportation is expensive initially as building cost is high but once constructed does not really need running expenses. Hence in the long run it is very cost effective.

• RAILROADS

Rail road transport a significant amount of domestic freight they carry high density low valued freight over long distances across the country at rates lower than air and road but more than water and pipeline. They carry anything from coal and stones to grains and automobiles. Railroads have excellent networks and can handle a variety of goods, but lack excellence due to sub standards infrastructure and unreliable equipment. Due to competition from other modes of transport the rails are trying to improve customer service.

• WATER CARRIERS

Water carriers dominate the international transportation because of their cost structure and their ability to transfer large volumes. They transport various commodities and their products range from ores and grains to Christmas toys. They also haul liquid products and crude oil, because of this they have a variety of ships to carter to their needs. Standardized containers are loaded ans shipped to different destinations. Water carriers compete with railroads on certain routes and pipelines for the movement of liguid and gaseous products, but they are relitavely slow, unreliable and highly dependent on weather conditions.


Water carriers can be divided into 2 broad categories namely:

1. LINERS
2. TRAMPS

1. LINERS

As the liners sail at a specific time they are not always filled to capacity, but because of their schedule timings they are more reliable and they reach their destinations on time.

2. TRAMPS

The tramps sail only when they reach full capacity, hence their departure time varies calling for un necessary delays. They are more popular when delivery time is not critical.
 

bhautik.kawa

New member
TRANSPORTATION

Transportation plays an important role in economic success by allowing for the safe and efficient distribution of goods and services throughout the supply chain. Transportation links the various integrated logistics activities. Without transportation the integrated logistics system breaks down.

Some view transportation as the glue that holds the entire system together. Without the transportation link raw material cannot flow in to the warehouses and plants nor can be finished product flow out of the plant to field warehouses and finally to the customer.

Transportation physically moves the products from where they are produced to where they are needed. This movement across space or distance adds value to products. This value added is often referred to as place utility. Time utility is created by warehousing and storing products until they are needed. Transportation is also a factor in time utility, it determines how fast and how consistently a product moves from one point to another.

This is know as time in transit and consistency of services respectively. If a product is not available at the precise time it is needed, there may be expensive repercussions, such as lost sales, customer dissatisfaction when the product is being used in the manufacturing process.

TRANSPORTATION FUNCTIONALITY

It can be divided in to 2 broad functions namely

(A) PRODUCT MOVEMENT

Where the product is in the form of material, assemblies, work in progress, finished goods transportation is necessary to move it to the next stage of the manufacturing process closer to the ultimate customer. A primary transportation function is product movement up and down, the value chain since transportatation utilizes time , financial and environment resources it is important that items be moved only when it truly enhances product value.
The major objective of transportations to move products from an origin location to a prescribed destination while minimizing time financial and environmental resources cost. Lost and damage expenses must be minimized.



(B) PRODUCT STORAGE

A less common function is temporary storage. Vehicles make rather expensive storage facilities. However if the transit product requires storage but will be moved again shortly the cost of loading and unloading the product in the warehouse may exceed the the per day charge of storage of transportation vehicle. In circumstances where warehouse space is limited utilizing transportation vehicles may be a viable option.

One method would be involving loading product on the vehicle and then have it to take a indirect route to its destination.

Another method is by way of diversion. This occurs when an original shipment destination is changed while the delivery is in transit.


PRINCIPLES OF TRANSPORTATION

There are 2 principles of transportation

1) ECONOMY OF SCALE

This refers to the characteristics that transportation cost per unit of weight decreases when the size of shipment increases. It is also generally true that larger capacity transportation vehicles such as rail or water are less expensive per unit of weight than smaller capacity vehicles like truck and tempo. Transportation economies of scale exist because fixed expenses associated with moving and loading can be spread over the loads weight. The more the load, the less will be the cost per unit weight. The fixed expenses include administrative cost of taking the transportation order, time to position the vehicle for loading and unloading.

2) ECONOMY OF DISTANCE

Refers to the characteristic that transportation cost per unit of distance decreases as distance increases. These principles are important considerations when evaluating alternative transportation strategies. The objective is to maximize the size of the load and the distance that is shipped while still meeting customer service expectations.
FACTORS INFLUENCING TRANSPORTATION COST AND PRICING

Factors influencing transportation cost or pricing can be grouped into 2 major categories namely

• Product related factors
• Market related factors

PRODUCT RELATED FACTORS

1) DENSITY

It refers to a products weight to volume ratio. Items such as steel canned foods, building products and bulk paper have high weight to volume ratios. They are relatively high weight to volume ratios. They are relatively heavy given their size. On the other hand products such as luggage and toys have low weight to volume ratios and thus are relatively lightweight given their size. In general low density products those with low weight to volume ratios tend to cost more to transport on a kilo basis than high density products

2) STOW ABILITY

It is the degree to which a product can fill the available space in a transport vehicle. For example petroleum products in bulk have excellent stow ability because they can completely fill the container in which they are transported. Other items such as automobiles, machinery, livestock and people do not have good stow ability. A products stow ability depends on its size, shape, and other physical characteristics.

3) EASE OR DIFFICULTY OF HANDLING

Difficult to handle products are more costly to transport. Products that are uniform in their physical characteristics require less handling expenses and are therefore less costly to transport.

4) LIABILITY

It is an important concern. Products that have high value to weight ratios are easily damaged and are subject to higher rates of theft, cost more to transport. Where the transportation carrier assumes greater liability higher price will be changed to transport the product.

MARKET RELATED FACTORS

1) degree of intra- mode and inter mode competition
2) Locations of markets, which determine the distance goods, must be transported.
3) Nature and extent of government regulations of transportation carriers.
4) Balance of imbalance of freight traffic into and out of market.
5) Seasonality of product movement
6) Whether the product domestically or internationally.


MODES OF TRANSPORT​

• AIRLINES

Air lines are the fastest terminal to terminal mode of transportation. They specialize in time sensitive movement of documents, perishable items, medical supplies etc. airlines transport small volume shipments and are very cost effective and time saving. They are also the preferred mode for travel passengers. Their services are rarely disrupted mostly due to bad weather conditions.

• MOTOR CARRIERS

They are the most flexible mode of transportation. They provide direct service from shippers to final consumers. They are the second fastest mode of transportation with additional advantage of door to door flexibility and wide coverage. As their trailers can vary in size and can control their temperatures. They can carry almost everything. Their rates are high as compared to other modes of transportation but must less than air. Their problem arises when they have to face bad weather or traffic congestion as they cause an indefinite delay of delivery.

• PIPELINES

Pipelines are a unique mode of transportation. They are fixed in place and the product moves through them. Tons and tons of products in liquid or gaseous state are transported through this method. As the pipeline provide continuous flow of products the materials provided through pipeline reaches destination quickly and keeps flowing continuously. Pipeline delivery is most dependable and remains unaffected by weather changes. This mode of transportation is expensive initially as building cost is high but once constructed does not really need running expenses. Hence in the long run it is very cost effective.

• RAILROADS

Rail road transport a significant amount of domestic freight they carry high density low valued freight over long distances across the country at rates lower than air and road but more than water and pipeline. They carry anything from coal and stones to grains and automobiles. Railroads have excellent networks and can handle a variety of goods, but lack excellence due to sub standards infrastructure and unreliable equipment. Due to competition from other modes of transport the rails are trying to improve customer service.

• WATER CARRIERS

Water carriers dominate the international transportation because of their cost structure and their ability to transfer large volumes. They transport various commodities and their products range from ores and grains to Christmas toys. They also haul liquid products and crude oil, because of this they have a variety of ships to carter to their needs. Standardized containers are loaded ans shipped to different destinations. Water carriers compete with railroads on certain routes and pipelines for the movement of liguid and gaseous products, but they are relitavely slow, unreliable and highly dependent on weather conditions.


Water carriers can be divided into 2 broad categories namely:

1. LINERS
2. TRAMPS

1. LINERS

As the liners sail at a specific time they are not always filled to capacity, but because of their schedule timings they are more reliable and they reach their destinations on time.

2. TRAMPS

The tramps sail only when they reach full capacity, hence their departure time varies calling for un necessary delays. They are more popular when delivery time is not critical.

hey

I read your article and really liked it. I am also uploading a document where you will get more information Transport Modes and consolidation.
 

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