TRANSPORT IN BUSINESS PLANNING

Transport refers to the physical movement of people on goods from one place to
another.

TYPES / MODES OF TRANSPORT USED BY DIFFERENT BUSINESS

(a) Road transport

It consists of Lorries, pickups, cars, wheelbarrows (carts), buses, motorcycles,
bicycles, etc that move on roads.
(b) Railway transport
It involves the use of a train and basically carries bulky goods.

(c) Water transport

It deals with the movement of goods over water bodies like rivers, lakes and
oceans. Water vessels include; canoes, boats, ships, oil tanks, ferries, etc.
Water transport is mainly used to transport bulky goods between continents as
well as in countries that have large inland water bodies and rivers.
(d) Air transport
It involves the use of air crafts to carry passengers from one place to another. It
is a fast, convenient and comfortable mode of transport. This mode of transport
is very expensive and is normally used for transporting goods of high value,
those that are light and perishables and also urgently needed goods like drugs,
flowers, newspapers, etc.
(e) Pipeline transport
Pipelines are used to carry liquid and gaseous. Products like fuel, water and
gas from one place to another.
FACTORS TO CONSIDER WHEN CHOOSING A MODE OF TRANSPORT
1. Availability and safety of the mode.
An entrepreneur should choose a mode of transport that is easily available, to
be used whenever need arises. The mode chosen should also be safe for
transporting the goods.
2. Cost of transport
The cost of transport should be relatively cheap compared to the value of goods
to be carried to avoid the goods becoming too expensive.

3. Nature of goods
Perishable and urgently needed goods require a fast means of transport. In
such cases, a faster means of transport e.g. road or air would be preferable.
4. Size of load
Bulky goods may be transported by rail and lorries. If the goods are crossing
continents and oceans, water transport would be used. If the goods are light,
they could be transported by Air or road.
5. Distance to cover
Long distances can easily be covered by rail or air while roads would be
preferable for short distances.
6. Value of goods
Valuable goods like precious minerals (gold, diamond and mercury),
computers, watches, televisions, etc. may be transported easily by Air.
7. Flexibility
If the goods are to be sold en-route, road transport would be the most
preferable means because it is entirely controllable by the entrepreneur e.g.
bakeries, milk dealers, matooke, etc.
8. Speed and urgency
When goods are required urgently, a fast mode like air transport is preferable.
IMPORTANCE OF TRANSPORT IN PLANNING A BUSINESS
1. Transport bridges the gap between a producer and a customer. It brings
goods produced to customers.
2. It facilitates the movement of raw materials from their sources to
manufacturing firms for processing into finished or semi-finished goods
with an added value.
3. It helps to transport employees to their place of work in time.
4. It helps in moving goods from areas of plenty to areas of scarcity thereby
eliminating “black markets” and overcharging by ensuring that goods
needed by customers are available.
5. Transport links entrepreneurs to markets wherever they may be.
6. Movement of goods from various places avails customers with a choice
and variety. This can create customer loyalty due to ability to purchase
all he/she needs at one-stopping / shop.
7. With good transport system, entrepreneurs are able to get rid of surplus
stocks of areas with high demand for it.
8. Transport also encourages development of enterprises anywhere since
entrepreneurs are motivated to locate their ventures in areas with good
transport system.
9. It makes it easy to exploit new and distant resources.
10. It facilities communication e.g. movement of letters