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Introduction Transportation plays a key 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 into the warehouses and plants, nor can be finished product flow out of the plant to field warehouses and finally to the customer. If a product is not available at the precise time it is needed, there may be expensive repercussions, such as lost sales, customer dissatisfaction, and production downtime, when the product is being used in the manufacturing process. Transportation Functionality Transportation is the most visible of all functions of logistics and high contributor to logistics cost. We can see trucks, containers and wagon loads of material being moved from place to place as an activity directly associated with trade and business. We should also appreciate that this is an activity that adds highest amount of cost to the activity of making inputs and outputs available to consu mers. Transportation function moves the products to meet customer expectations at minimum cost. A) PRODUCT MOVEMENT : What is moved? Raw material, semi finished items, WIP, finished goods, packaging material, rejected material movement is required up or down the supply chain. How is this done? What resources are used? Resources used by transportation: a) Temporal -- product is locked up during transit, hence inaccessible. We have to spend a positive amount of time in transporting material. Time is a resource [temporal resource] that is expended in transportation. During the time the product is locked up costs are incurred in proportion to the time. b) Financial -several cost elements like administration costs, salaries, maintenance costs are expended. Loss on account of product loss and damage also needs to be accounted for. c) Environmental -Fuel consumed is a big cost in transportation. This activity is a fuel guzzler, eats up natural fuels like oil, directly and indirectly. 67% of all domestic fuel usage in the US is by transportation activity. Creates congestion, air pollution and noise pollution. Environmental cost is tangible and sustainability intangible. As transportation utilizes temporal, financial and environmental resources items must be moved only when product value is enhanced. B) PRODUCT STORAGE : Temporary storage in stationery vehicles kept moving on a circuitous route. Product storage is expensive in a transport vehicle. But some times keeping overall cost in mind this is adopted. a. When unloading and loading is more expensive than storage. b. When storage space is limited. [situation when inventory levels are very high]
The fixed costs in transportation includes administrative costs of taking the transportation order. The administrative cost of shipping 1 kg of goods and 1000 kg of goods is same. These do not vary with the volume of shipment. This benefit is Economy of scale.00. 2. Transportation economy of distance is also referred to as tapering principle since rates or charges taper with distance. while the 1. it can be said that an economy of scale exists for the 1000-pound shipment.g.00. They are 1. Parties to a transportation decision are those who have a stake in transportation. The rationale of distance economies is similar to that for economies of scale. Transportation makes business happen which is fundamental to the economy of any society. invoicing and equipment cost. These parties have very important roles to play in transportation environment. thereby decreasing costs per unit of weight. Longer distances allow the fixed expenses to be spread over more miles.000 pound shipment has per a unit of weight cost of $0. Carrier: is the service provider who carries the consignment from shipper to consignee. Hence transportation is planned in a single long lap rather than number of short laps to reach the destination. Hence in order to gain benefits in terms of reduction in transportation costs logistician tries to consolidate the bulk and then ship the consignment rather than shipping half truck loads or half container loads. the economies in scale are achieved because fixed expenses associated with moving a load are spread out. E. 3. Consignee: is the party to whom the goods are sent. resulting in lower overall per mile charge. time to position the vehicle for loading and unloading. When scale increases.01. suppose the cost to administer a shipment is $ 10. Government represents general public whose interest they have to protect. buyer and directly or indirectly government. 4. They are seller. Their demand can not be met without transportation. Then the 1-pound shipment has per a unit of weight cost of $10. Economic prosperity to the society is the objective of the government of the day. E. 5. Participants in Transportation Decis ions Normal commercial transaction has limited number of parties to the business decision. Public want goods produced at different parts of not only country but also world. General public: is another party who has a large stake in the transaction involving transportation. But a transportation decision has number of parties to the decision. Thus.Principles of Transportation Principles of Transportation Economy of Economy of a) Economy of scale Scale Distance It is common knowledge that per unit transportation cost comes down as the bulk of the items transported increases. b) Economy of distance The transportation cost per kilometer comes down as the distance moved increases.g. Government also collects tax on the transaction. Shipper: shipper (or Consigner) is a party who wants to transport the goods to his customer in a business transaction. The fixed costs and costs like overheads of loading and unloading are spread over the distance through which the load is moved. When alternate transportation strategies are evaluated to meet customer service expectation. -2- . Government: has a role to play as they are keenly interested in transportation and have a stake in it. a shipment of 1000 miles will cost less than two shipments (of the same combined weight) of 500 miles. economy of scale and economy of distance are fundamental.
height etc. 3) Right of way: passage to move on: Rails. platforms railways yards. 2) Vehicles: trucks. Inventory costs: it is quite clear that inventory holding costs are temporal costs and are directly proportional to the transit time. airlines. shipping lines are service providers. when the transit time is quite large. ships or wagons depending on the mode. But rise in customer service beyond a certain level does not result into increased revenue. 4) Prime movers: the power houses moving the vehicle of transport shortage of which seriously affect transportation. Good service provides a vital fillip to business and trade. Railways.Impact of transportation mode on other costs associated with transportation. So customer service should be raised to be able to meet customer expectations. Other situations are product deterioration time & expiration date of the product. larger are the costs. If this infrastructure is inadequate transportation gets slowed down resulting into a major obstacle in the growth of trade and business in that area. roads. Packaging: These costs are mode dependent as bad road condition needs robust packaging and smooth transit does not need such packaging. Conventionally. airways. -3- . 5) Carrier organizations: are the transportation service providers in business. (Or important elements of Transportation that adds to Transportation costs. In other words it is only cost and not value. Their size. Shortage of good locomotives impairs the utility of railway as a mode of transport. limitations on speed. Mode of transport determines the transit time and thereby influences these costs.) a) b) Modal Movement costs: cost of power to drive the vehicle of transport depends on the mode selected. For transportation to take place a strong infrastructure is primary. roadways. Transportation is their core business. Obsolescence: Specially. the inventory can become redundant when it arrives at the point of use. if we use this particular passage. weight. Transit capital remains blocked during transit time and unavailable for use. product life cycles are shrinking and hence this cost becomes highly relevant. Û Elements of transportation infrastructure 1) Terminal facilities: well maintained loading unloading facilities. Insurance: this cost obviously proportional to risk of damage and loss in transit as this is liability of carrier. But the current thinking is to increase response time to customer need rather than increase the stock. When we try to raise customer service level costs are incurred. shape & speed. The second method is cheaper than the conventional. Customer Service Costs: shortage of product when demanded by the customer leads to customer dissatisfaction and thereby loss of sale for the company. This will also depend on handling system. Longer the inventory is in transit. We know that in the changed environment. Pilferage: this cost can be eliminated by switching to options like container transport. Breakage: this depends on smoothness of transit and handling system associated with the mode. c) d) e) f) g) h) Transport Infrastructure Infrastructure is the main facilitator for any activity to take place. as stock of inventory are well understood. companies stockpile to raise service level. This is done by improving information flow to anticipate demand and reduce transit time by changing to faster mode of transport. space for movement of vehicles.
Advantages of Rail Transport y y y y y Capability to efficiently transport large tonnage over long distances. length of haul and flexibility. Intermodal operations have also expanded through alliances. speed. (Railroads must maintain their own track). coal. oil. Less flexible. reliability. -4- . switching yards and terminals. The replacement of steam by diesel power reduces the railroads variable costs. thereby being an important mode of transport in the country. certain items are moved on priority ± particular items might not be on priority list. less expensive to operate and quick as it can bypass rail yards and go direct to the products destination. motor carries. Rail experiences relatively low operating costs. There are unit trains where the entire train carrying the same commodity. terminals but it operates with low running costs. having two levels of containers. are on priority list) Cost in Rail Transport y y y Railroad operations incur high fixed costs because of expensive equipments. Rail network accounts for 226 billion tonne kilometers and 55. airlines. capacity. switching yards. pipelines. To capitalize on this basic advantage. Rail Network Rail network is fully owned and operated by government of India. Rail network stands for maximum tonne kilometers moved in India now. Which mode is the best depends on the freight hauled cost.Modes of Transportation There are five major modes of freight transportation. which are bulk products such as coal or food grains. Useful for heavy and bulk products. Rail roads are even concentrating on development of special equipment. Disadvantages of Rail Transport y y y y Not effective for small loads and short distances. Electrification offers potential for more reductions. further decreasing variable costs. steel etc. double stack railcars. thereby doubling the capacity of each car. In the US. This major step for facilitating movement of goods throughout the country at a very low cost for promoting trade and business in the country. Secondary transportation is needed.8% of total tonne kilometers moved in 1982 in India. Various modes of transport are used for taking the parcel to the addressee by this business. We can see an example of this practice in their courier business. railroads and water carriers. There are also various types such as articulated cars for extended rail chassis. inter modal transport by railways through alliances and acquisition is practiced to provide hassle free service to customers. In India. Rail network needs a high capital investment due to the right of way. Each of these modes has distinct characteristics that give them advantage over the others. Moves only on specific routes. Speed of operation. railways focus on specific products rather than on broad range. right of way. New labour agreements have reduced work force requirements. Unit trains are faster. (food.
Octroi posts are notorious for delays and harassment of carriers.this is the strength of roadways. Vehicle availability: limited availability trucks pose a constraint to this business. No other mode can connect any given pair shipper consignee as roadways. Now as more and more truck manufactures have come into business this facility is likely to be short lived. as we saw earlier.Road Transport Road transport is rapidly pulling the carpet from under the feet of railways. Octroi: is along standing grouse of carriers.irrespective of the mode chosen ultimately the consignment reaches the doorsteps of the customer by road. Ultimate mode transport: .2 billion tonne kilometers were moved by roadways in 1982. Restrictive permits: carriers resent restrictive regime of permits and licenses imposed by the government all over the country. -5- y y y y y y y y y y y . road transport reaches the goods to the consignee very fast. This is 44. Important features of this mode of transport are discussed below:y High flexibility and speed: . We have experience transportation contractors or carriers going on strikes to project their problems with the government.2% of total tonne kilometers moved by all modes as against 55. Neither any other mode can handle the variety as roadways do. Its popularity is growing everyday. post world war. Maintenance and spares costs and availability of service facilities : as the road networks quite extended and reaches deep in the rural India non availability of such services is a problem. Low capital costs as compared to railways: . 179. Old motor vehicles act: the legislation that controls movement of vehicles on the roads is an important law for this business.railways obviously need huge amount of capital for setting up the infrastructure in view of the need of rails for movement. In India. accidents and damage.8% by railways. As there is no need for shunting and waiting for as in railways. Disputes with government: on account of conflicting interests between the parties to transportation decision. Operating costs are higher: due to fuel requirement and higher labor requirement. Occasional fuel shortages: as the fuel is not available in full measure in the country internally scarcity is experienced once in a while. There is a feeling that this law is now outdated and new legislation should made to tackle the challenge of current business environment. This feature makes roadways ideal for small shipments over short distances. Bad and unsafe road conditions: pathetic condition of our roads a major stumbling block for business which causes delays. This feature along with flexibility forms the formidable strength of this mode.
Costs in Road Transport y In companies to railroads. Disadvantages of Road Transport y y y y Delays in transit time due to bad road condition and climatic hazards Unsuitable for very heavy and large size loads. Highly suitable for short distances. Requirement of specific road permits. Highest availability since they can drive directly from origin to destination. Increasing cost of accessories and components. Advantage of Road Transport y y y y y Door to door service to customer which neither rail nor sea nor air transport can offer. Wastage of time at octroi check post in doing formalities.) Capital investment in case of roadways is much less than railways designed to carry equivalent quantum of traffic. Transport is quite speedy. the cost of making a road is 1/6th that of laying a railway line. (On per unit basis. Very flexible as they can operate on all types of roads. Unsuitable for very long distance. motor carriers have relatively small fixed investment in terminal facilities and operate on publicly maintained highways. The variable cost per mile for motor carriers is high because a separate power unit and driver are required for each trailer or combination of tandem tailors. Restriction of movement of vehicles on all India basis.Problems faced by Road Transport y y y y y y y y Pathetic road conditions Shortage of quality fuels (adulteration problem). y y -6- . More chance of accidents and damages to goods. and tolls are considerable. user fees. Non availability of professional persons. these expenses are directly related to the number of units and miles operated. Although the cost of license fees. Non recognition from industry.
Shallow water vessels like diesels towed barges are flexible but are limited by their range of operations and speed. Low speed. -7- . rivers or canals. Advantages of Water Transport y y y y The main advantage of water transportation is the capacity to move extremely large shipments. diesel driven ships came into existence since 1920. Costs in Water Transport y y Water transport ranks between rail and motor carrier in the fixed cost aspect. Suitable for long distances and large volume shipments. Sailing vessels existed since that far away times. Disadvantages of Water Transport y y y The main disadvantage of water transport is the limited range of operation and low speed. Lack of clarity in thinking receding water levels in rivers and tough competition offered by other modes of transport appear to the hurdles. Although water carriers must developed and operate their own terminals. Capacity to carry huge bulk. Main advantage of water transportation is its capacity to move extremely large shipment at a very low cost. it is spread over large volumes and hence the cost per unit is low. Main features of water transport are the following: y y y y y y y Low capital costs and low operating costs. Maneuverability is low due to size. Example: Mechanized water transport came into being in the form of steam ships since 1800. the right ±of ± way is developed and maintained by the government and results in moderate fixed costs as compared to railways and highways. Limitation due to availability of harbor. Labor restrictions on loading and unloading at docks create operational problems and tend to reduce the potential range of available traffic. Unless the port and destination are adjacent. Regularity in sailing. Water transport is classified into deep water transportation and navigable inland water transportation or domestic water transportation on lakes. supplementary haul by rail or truck is required.Water Transport This mode is the link between countries separated by water. Though operating costs are high. Business is known to have existed between far off lands for long time in the past. Inland water transport is not used to its full potential in India although we have used mechanized Inland Water Transport [IWT] since early 1800. Deep water ships designed for ocean and lakes are limited to deepwater ports. The capability to carry very high cargo at an extremely low variable cost places this mode of transport in demand when low freight rates are desired and speed of transit is secondary consideration.
Airways & airports are maintained by governments [airport authority]. Fixed costs are lower than rail or road or pipeline. Air transport brings distant market closer perishables market in gulf countries. Thus fixed costs of airfreight are associated with aircraft purchase & requirement for specialized handling systems and cargo containers. -8- . water & pipeline.Air Transport Generally. Full potential of peak seasonal demand can be exploited moving entire facility to meet peak demand. Overcomes the hassle and cost of setting up depots and service centers overseas. y Minimum handling of cargo & hence less damages y Low insurance premium due to less transit time y Helps in meeting committed delivery times. Product can be shipped directly from the factory as time of high importance. Advantages of Air Transport y y y y y y y y Brings distant and new market within the reach Extends export market Meets seasonal demand at fastest rate Reduces time of delivery for urgent needs Flexibility in carrying goods of varied nature Minimum handling of cargo and hence less damages Low insurance premium due to less transit time Helps in meeting committed delivery time. this transport mode is used in emergency rather than in normal times. The variable cost. In fact Air transport ranks second only to highway with respect to low fixed cost. Test marketing is easy. Disadvantages of Air Transport y y y y y Comparatively costly mode of transport Caters on primary transport [airport to airport only] Certain categories of items are not allowed to be transported [hazardous goods as specified by IATA] Facilities not available through out the country Shipping space available is limited. Main features of this mode of transport y y y y y y Speed of transport is highest. however is extremely high as a result of fuel maintenance & lab our intensity of both in flight and ground crews. Cost in Air Transport y y y The air transport costs are highest The fixed cost of air transport is low as compared to rails. But operating costs are highest.
All Whether Mode of Transport Low Energy Consumption & hence Low Cost Lower Operating & Maintenance Cost Under Ground hence No Additional Space Required Can Reach To Remote & Distant Places Transit Losses Are Minimum Cheapest Mode Of Transport Disadvantages of Pipeline Transport y y y y y Ideal only For Continuous Operations (Bulk Products) Only For Bulk Liquid & Gas Transportation So Far Restricted To Very Few Route National Consensuses Are Required Continuous Vigilance Is Required Costs in Pipeline Transport y y y Pipelines have highest fixed cost and lowest variable cost among transport modes High fixed costs results from right. -9- . petroleum products are transported in a pipeline.Pipeline Transport Ø Pipelines What is transported in a pipeline? Generally liquids like oils. gases. vapors and solids in powder form are also transported in pipelines. Gases and vapors. Pipelines are stationery Physical state of the commodity to be transported is limitation. construction and requirements for control stations.natural gas. More than 5000km of pipeline exists in India for crude and petroleum products. huge quantity of water is necessary which a concern is for an environment is. lime. due to right of way and laying of pipeline. In addition to the products above slurries. and pumping capacity. LPG. Advantages of Pipeline Transport y y y y y y y y Reliable & Continuous Mode All Seasons. iron-ore. Since pipelines are not labor intensive. Slurries-coal slurry. in India LPG pipeline in existence. crude. This mode of transport can release capacity of other modes for transport for essential commodities. the variable operating cost is extremely low once the pipeline has been constructed. In India pipelines are extensively used for transporting crude and petroleum products. In India pipeline is used for transporting iron ore. Main Features of this Mode of Transport y y y y y y y y y Reliable all weather means of transport Low energy consumption Pipeline being under ground space occupation in minimal Pipeline operates all the time except when it is shut down for maintenance No empty container or wagon to be brough t back Highest fixed costs. and lowest operating costs [ not labor intensive] Not flexible by nature.of ± way.
stainless steel. aluminum etc. Thermal containers ± have facility to maintain required temperatures. contributing to a sizeable volume of sea freight. This mode is good when gradients are steep as road or rail would take a very long route to negotiate the gradient. High cube containers have similar dimensions but the height is 9¶. Types of Containers y y y y y y y y Normal containers are 8¶x 8¶ x 40¶ (40 feet containers). Liquid containers ± usually made of non-corrosive steel with man holes. shipping interests save substantially on packaging cost and take advantage of safe. In bigger types of container ships are handled by shore-based equipment like harbor cranes.Rope Ways Transport Used for transporting materials in hilly and otherwise inaccessible area. to be evolved providing a possible combination of rail. Advantages of rope ways transport y Transports bulk materials over short distance y Lower capital costs y Ideal for Hilly areas Disadvantages of rope ways transport y y Limited scope of operations Slowest mode of transport Containerization The concept of ³UNIT LOAD´: Containerization is the method of distributing merchandise in a unitized form thereby permitting an inter-modal transport system. Bulk container ± for bulk cargo with manholes to facilitate loading and unloading by gravity. etc. Gas containers ± with thick walls and special metals having fittings for filling and emptying. Ropeways cause minimum ecological imbalance.10 - . . Unit Load Devices as containers are being transported through ships in recent times. Garment containers ± has hangers. containers are also made of various materials. canal and maritime transport. There are various types of containers-closed. This has led to the establishment of dry ports. A container is a metal box of standard dimensions (20¶x8¶x8 or 40¶x8¶x8). road. Fruits produced in hilly area are brought to low land for further transportation to consumption centers. open refrigerated. Containerization has led to inter-modal transportation systems wherein cargo is transported from the point of origin to the po int destination [door to door] on the basis of a single contracts and a through freight rate . secure and speedy transit of cargoes. General cargo containers ± used for general cargo. By using containers. such as steel. Ropeways connect point of supply & demand by shortest route. which are essentially inland inter modal clearing Houses.
to take advantage of the inherent economy of each mode. 3.Benefits of Containerization 1) 2) 3) 4) 5) 6) Ease of handling once stuffed. Piggyback or trailer. Better quality transportation. 2. There can be road restrictions particularly in case of 40¶ containers. This service combines the long haul. which moves the trailer by rail for long distances. A motor carrier then moves the trailer for short -distance pickups and deliveries. More competitive shipment rates. Less packing needs. Inter-modal Operators Inter-modal operators: They use two or more carriers of different modes in the through movement of a shipment. . 4. Disadvantages Need for special cranes and equipment Dimensions are restricted Not useable for some trades like live stock Container owning company has to ensure full utilization ----shipping back empty containers will be very expensive 5. 1. low-cost advantage of rail with accessibility of motor.on flatcar (TOFC) is a specialized form of containerization in which rail and road transport coordinate. the carrier places the carrier trailer on a rail flatcar. In piggyback. Less risk of damages and pilferage.11 - . Provision for through movement/ through documentation. Rail Piggyback Birdy back Air Truck Fishy back Water Piggyback / TOFC: (Road + Rail) Pipeline The best-known and most widely used Inter-modal system is the trailer on a flatcar (TOFC).
which reduces fuel efficiency & results in higher movement costs in addition to the higher cost of the equipment. The disadvantages have tended to outweigh the advantages. Road ± Railers or Trailer ± Trains: (Road + Rail) using single vehicle They combine motor & rail transport in a single piece of equipment. However. The goods can be transported by water transferring the shipment to surface transport and again finish by water transport. These are examples of the oldest form of Inter-modal transport. railcar. Mini Bridge Mini Land Bridge is a variant of land bridge in which freight movement is only water ± land movement. The other two international options are Mini Land Bridge and Micro Bridge. COFC allows for inexperience and efficient transportation of a wide variety of goods. The Land Bridge concept is based on the benefit of ocean and rail combination that utilize a single tariff. The advantages of this inter modal form of transport are that rail flatcars are not required & that the switching time to change wheels on the trailer is less than loading and unloading the trailer from the flatcar. The big advantage of micro bridge is that it provides a combined rate. the wheels of the trailer are retracted & the trailer rides directly on the rail tracks. The fishy back train ± ship and containership concept loads a truck trailer. Fishy . This service provides door-to-door rather than port-to-port transportation. . E. the trailer has both rubber truck tiers & steel rail wheels. Over highways. They utilize waterways. Birdy .g. Mini ± land Bridge (also called as Mini Bridge) is a special case of land bridge where foreign cargo originates or terminates at a point within the same country. The major disadvantages of road-railers are the added weight of the rail wheels.back It is a combination of Air & Truck Movement. which is lower than the total cost of the separate rates.back There are two 1) Train ± ship & 2) Container ± ship. which is one of the least expensive modes for line ± haul movement. Container on Flat Car (COFC) Railways offer double ± stack cars.12 - . A container coming to JNPT from a foreign destination will be placed on a rail car and transported to Chennai from where it will again be loaded on a vessel for transferring to say port Blaire. but instead of placing the trailer on a flatcar for rail movement. Micro Bridge It is a relatively new service being provided by ports in contrast with mini bridge. which allow two containers to be transported on one railcar. or container onto a barge or ship for the line haul move. which moves containers by a combination of sea and rail. in a single tariff that is lower than the sum of the separate rates. in clubbing rail and ocean transportation on. The road-railer resembles a conventional motor carrier (truck) trailer. Land Bridge A variant of this Intermodal option is the ³LAND BRIDGE´ concept. resulting in very low usage of this inter modal option. This type of service allows a shipper to transport goods over water and surface without having to waste time and money unloading and reloading trailers or railcars. tractor power units transport the trailers in the normal way.
are not constrained by economic regulation. Common carriers have the responsibility to offer service at non-discriminatory prices to the public. o r it may limit transport to specialized commodities such as steel. Exempt carriers. Selection of a specific carrier : from within the chosen mode or inter modal form. Involves selecting legal carrier type: common. Typical exempt commodities include unprocessed agricultural products and extracted raw materials. If the exempt carrier is engaged in interstate movement.: inter modal transportation include rail -road [piggy back]. The firm must own or lease the transport equipment and provide managerial direction. CONTRACT CARRIERS: Contract carriers provide transport services for select customers. Inter modal transportation which used two or mode modes to provide service over a given traffic lane may be selected. They have the right to transport all commodities. Selection of transportation mode by the firm: The choices include the basic modes of road rail water. Private. exempt or private. rates. commodities hauled or market served. vehicle safety. Now pvt. . The basis for the contract is an agreement between a carrier and a shipper [customer using the service] for a specified transportation service at a previously agreed cost. E. Typical exempt markets include the zones around airports or metropolitan areas. E. From an operating authority perspective there are four carrier classes: Common. number of passengers etc. Carriers can transport goods for another company to reduce ³empty miles´. Contract. specified and indicates if such service is to be on a scheduled or unscheduled basis. The traditional exemption was for specified. Private carriers are not for hire and are not subject to economic regulation. PRIVATE CARRIERS: A private carrier consists of a firm providing its own transportation. and Exempt COMMON CARRIERS: The basic foundation of public transportation system is the common carrier. although they must comply with regulations concerning hazardous goods movements. 2. as their name implies. Although. and other social regulations established by government agencies. contract carriers must receive authorization. EXEMPT CARRIERS: Exempt carriers. Earlier.g. Typical exempt markets include unprocessed agricultural products and extracted raw materials.Transport Formats In addition to classifying transportation by mode. another common grouping is the legal status or format of carrier operating authority.13 - . employee safety. truck-air and rail water. requirements are normally less restricted than common carriers operating authority. the private carrier was required to own a product it transported that is no longer the case. The primary distinction between private and for -hire carriage is that the transportation activity must be incidental to the pri mary business of the firm to qualify as private carrier.: BEST bus or Auto rickshaw is a type of common carrier-with regulations on area of operation. rates must be published. air and pipeline. however must comply with the licensing and safety laws of the states in which they operate. contract. Carrier Selection Steps involved in the carrier selection process are: 1. regulated. regarding transportation operations.g.
: stopping in transit II. loading and unload ing facilities. damage in transit and special services available from carrier E.14 - . c) Capacity determines whether a particular carrier can physically perform the transport service desired. Service performance TRANSPORTATION COST: This is a major carrier selection determinant.g. Reliable time enables the marketer to gain product differentiation and competitive advantage in the market place. b) Reliability refers to the consistency of the transit time a carrier provides. Capacity refers to the carriers ability to provide the facility required d) Accessibility considers the carriers ability to provide service over the route question.CARRIER SELECTION DETERMINANTS Transportation cost I. It refers to carriers physical access to facilities e) Security concerns the arrival of goods in the same condition they were in when tendered to the carrier. . It includes the minimum weights. SERVICE PERFORMANCE: a) Transit time is the total time that elapses from the time the consignor makes goods available for dispatch until the carrier delivers the same to the consignee. Transit time and reliability affect inventory and stock-out costs. packaging.
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