LOGISTICS MANAGEMENT

4. TRANSPORTATION
 DEFINITION
• Transport or transportation is the movement of humans, animals and
goods from one location to another. In other words, the action of transport
is defined as a particular movement of an organism or thing from a point A
to a Point B. Modes of transport include air, land (rail and road), water,
cable, pipeline and space. The field can be divided into infrastructure,
vehicles and operations. Transport enables trade between people, which is
essential for the development of civilizations.

• Transport infrastructure consists of the fixed installations, including roads,

railways, airways, waterways, canals and pipelines and terminals such as
airports, railway stations, bus stations, warehouses, trucking terminals,
refuelling depots (including fuelling docks and fuel stations) and seaports.
Terminals may be used both for interchange of passengers and cargo and
for maintenance.
• Vehicles traveling on these networks may include automobiles, bicycles,
buses, trains, trucks, helicopters, watercraft, spacecraft and aircraft.

• Operations deal with the way the vehicles are operated, and the
procedures set for this purpose, including financing, legalities, and
policies. In the transport industry, operations and ownership of
infrastructure can be either public or private, depending on the country
and mode.

• Passenger transport may be public, where operators provide scheduled

services, or private. Freight transport has become focused on
containerization, although bulk transport is used for large volumes of
durable items. Transport plays an important part in economic growth and
globalization, but most types cause air pollution and use large amounts of
land. While it is heavily subsidized by governments, good planning of
transport is essential to make traffic flow and restrain urban sprawl.
 Functionality
Transportation provides two major logistical
services:

• 1. Product movement
• 2. Product storage
 What are the Important Functions of
Transport?
• The entire economic, social and political life of
a modern country depends upon an efficient
system of transport.

• The benefits of transport can be studied under

the following categories.
A. Economic Benefits/Functions:
The economic effects of good transport facilities are as follows:

1. Extensive Market:

• Transport helps in the assembly of raw materials and distribution of finished

goods. It makes it possible to move goods from the place of production to the
place where they are to be consumed. In the earlier days, there were only
local markets due to the absence of safe means of transport. Now-a-days,
trade is not restricted to the boundaries of a nation, but has spread
throughout the world.

• Development of the efficient means of transport has knit together all the
nations of the world into the one big world market. Even the perishable
articles like fish, dairy products, meat etc. are being transported to distant
places of the world. But for good transport facilities, such a development in
trade and commerce would not have been possible.
2. Mobility of Labour and Capital:

• Transport reduces the rigours of immobility of certain factors of

production. Mobility of labour and capital increases with the
development of transport. An efficient network of transport
services encourages the movement of people from one place to
another.

• Labour can migrate to the place where they can get better job
opportunities, which reduces the exploitation of workers. The
development of Australia and United States would not have
been possible without immigrations from Europe. With the
development of transport, the investment of capital is also
channelized to new lands and other places of the world.
3. Specialisation and Division of Labour:

• Transport helps each region and country to make

optimum and efficient use of its national resources.
Each region can concentrate on production of
those goods for which its resources are best suited.
Thus, movement of goods and people from one
place to another leads to specialisation and
division of labour which results in minimum
wastage of resources and reduction in the cost of
production.
4. Economies of Large Scale Production:

• Transport has helped the development of large

scale industries. It would not have been
possible for these industries to procure raw
materials, gather large number of workers and
sell the finished goods, without the efficient
facilities of transport. Thus, transport has made
possible the various economies of large scale
production which tend to reduce unit cost of
production and help the economy.
5. Stability in Prices:

• Transport facilities .iron out wild fluctuations.

Goods can be transported to places where
there is scarcity and the prices are high from
places where there is surplus and the prices
are low. Such movement of goods helps in
maintaining uniform prices throughout the
country and further tends to equalise the
prices of goods throughout the world.
6. Benefits to Consumers:

• Improved means of transport benefit the

consumers in many ways. The consumers can
enjoy the benefit of use of many goods, which
cannot be produced at their place, by
transporting such goods from other distant
places. Further, it helps in reducing the cost of
goods of consumers and increases their
purchasing power.
7. Employment Opportunities and Increase in the National Income:

• The various means of transport provide employment to millions of

people throughout the world. The economic development of a
country depends upon the improved means of transport. Thus,
transport contributes substantially to the national income of the
nations.

8. Discouragement to Monopoly:

• The scope of total income is extended by the development of the

means of transport. As commodities can be quickly transported from
one place to another, local producers cannot charge prices at their
own will. This discourages monopoly and encourages competition.
9. Development of Agriculture:

• Transport has helped in the development of

agriculture also. The business of agricultural
products has grown to such a large extent only
do to the efficient means of transport. It
would not have been possible to use modern
techniques of agriculture, improved quality of
seeds and fertilisers, etc., but for good
transport facilities.
10. Industrial Development:
• Transport facilitates the industrial development of a
country. It helps the growth of industries by making
available various factors of production. It would not
have been possible to make such rapid industrial
development without efficient means of transport.

11. Increase in National Wealth:

• Transport helps in increasing the national wealth of
a country by facilitating agriculture, industry, trade
and commerce.
B. Social Benefits/Functions:

• Transport has substantially influenced the life of the people.

• The various social advantages of an efficient transport are as follows:

• 1. Discovery of New Lands:

• Transport has helped the discovery of new lands and the growth of
cities and urban areas. Due to the availability of long distance cheap
transport, land has been utilised to the maximum advantage of the
people all over the world. Even the waste lands are now being used.
It also increases the value of land. We, generally, find the value of
land, situated on the road side or near the railway station or bus
stand, has increased manifold.
• 2. Diffusion of population:

• It reduces the concentration of population in the area of

production. People can reach from distant places if there is an
adequate and efficient system of transport.

• 3. High Standard of Living:

• Transport helps in the increase of production thereby raising the

standard of living of the people. It is possible only through the
means of transport that the ‘five M’s-men, material, money,
machinery and management’ can be assembled at the place of
production. So, industries depend upon efficient system of
transport and it creates new industries.
• 4. Mutual Understanding:

• It removes the problem of distance, helps the people of different

regions to come in contact with each other, encourages
exchange of ideas and culture and promotes co-operation,
understanding the cordial relations, amongst the people of the
world.

• 5. Ability to Face Natural Calamities:

• Transport enables the society to face natural calamities such as

famine, earthquake, drought, floods, etc. In such emergencies,
commodities can quickly be transported to the places of mishap.
• 6. Broadens the Outlook of the People:

• Transport promotes mutual understanding. It has

broadened the outlook of the people of the world
and has knitted together all the nations of the world.

• 7. Destroys Ignorance:

• It promotes culture, removes prejudices and destroys

ignorance! It helps in spreading knowledge and
furthering the cause of education.
C. Political Benefits/Functions:

In addition to the economic and social advantages, transport

enjoys a great political significance:

• 1. National Unity, Integration and Peace:

• Transport helps in maintaining internal peace and national unity

of a country. It brings about national integration. A vast country
like India cannot be held together without efficient means of
transport. Transport encourages economic and political
interdependence by promoting specialisation and division of
labour and this strengthens the need for unity and national
integration.
• 2. National Defence:
• Transport is essential for strengthening the national defence
of a country. In the days of war, it is only through improved
means of transport that the defence personnel, material and
equipment can be moved rapidly to the border areas. Defence
of a country, therefore, necessitates the existence of
improved transport facilities.

• 3. Political Awakening:
• Efficient means of transport help in creating political
awakening in .he people and the growth of civilization.

• 4. Source of Revenue:
• Transport helps in increasing the national wealth and income
of a country. It is also a source of revenue to the Government.
 The Participants
Public

Government

Consignor (Shipper) Carrier and Consignee

Agents (Receiver)

Information
Technology
 Transportation Mode
• A Diversity of Modes
• Road transportation
• Rail transportation and pipelines
• Maritime transportation
• Air transportation
• Intermodal transportation
• Telecommunications
• Maritime Circulation
• Air Traffic Flows
Global Submarine Cable Network
 Distance, Modal Choice and Transport Cost

• Different transportation modes have different cost functions

according to the serviced distance. Road, rail and maritime
transport have respectively a C1, C2 and C3 cost functions.
While road has a lower cost function for short distances, its
cost function increases faster than rail and maritime cost
functions. At a distance D1, it becomes more profitable to
use rail transport than road transport while from a distance
D2, maritime transport becomes more advantageous. Point
D1 is generally located between 500 and 750 km of the
point of departure while D2 is near 1,500 km. Although the
above relation is rather straightforward, it does not fit
reality well, mainly for the following reasons:
Container
 Types
• Other than the standard, general purpose container, many variations exist
for use with different cargoes. The most prominent of these are
refrigerated containers for perishable goods, that make up six percent of
the world's shipping boxes. And tanks in a frame, for bulk liquids, account
for another 0.75% of the global container fleet.

• Although these variations are not of the standard type, they mostly are ISO
standard containers – in fact the ISO 6346 standard classifies a broad
spectrum of container types in great detail. Aside from different size
options, the most important container types are:

• General-purpose dry vans, for boxes, cartons, cases, sacks, bales, pallets,
drums, etc., Special interior layouts are known, such as:
• rolling-floor containers, for difficult-to-handle cargo
• garmentainers, for shipping garments on hangers
• Ventilated containers. Essentially dry vans, but either passively or actively
ventilated. For instance for organic products requiring ventilation
• Temperature controlled – either insulated, refrigerated, and/or heated
containers, for perishable goods
• Tank containers, for liquids, gases, or powders. Frequently these are
dangerous goods, and in the case of gases one shipping unit may contain
multiple gas bottles
• Bulk containers (sometimes bulktainers), either closed models with roof-
lids, or hard or soft open-top units for top loading, for instance for bulk
minerals. Containerized coal carriers and "bin-liners" (containers designed
for the efficient road and rail transportation of rubbish from cities to
recycling and dump sites) are used in Europe.
• Open-top and open-side containers, for instance for easy loading of heavy
machinery or oversize pallets. Crane systems can be used to load and
unload crates without having to disassemble the container itself. Open
sides are also used for ventilating hardy perishables like apples or potatoes.
• Platform based containers such as:
• flat-rack and bolster containers, for barrels, drums, crates,
and any heavy or bulky out-of-gauge cargo, like machinery,
semi-finished goods or processed timber. Empty flat-racks
can either be stacked or shipped sideways in another ISO
container
• collapsible containers, ranging from flush folding flat-racks
to fully closed ISO and CSC certified units with roof and
walls when erected.
• Containers for Offshore use have a few different features,
like pad eyes, and must meet additional strength and design
requirements, standards and certification, such as the
DNV2.7-1 by Det Norske Veritas and the European standard
EN12079: Offshore Containers and Associated Lifting Sets.
• A multitude of equipment, such as generators, has been
installed in containers of different types to simplify
logistics – see containerized equipment for more details.

• Swap body units usually have the same bottom corner

fixtures as intermodal containers, and often have folding
legs under their frame so that they can be moved
between trucks without using a crane. However they
frequently don't have the upper corner fittings of ISO
containers, and are not stackable, nor can they be lifted
and handled by the usual equipment like reach-stackers or
straddle-carriers. They are generally more expensive to
procure.
 Assignment Chapter 4
• Railroads have the largest percentage of
intercity freight ton-miles, but motor carriers
have the largest revenue. How do you explain
the relationship?
An-225