The Transportation System
The Transportation System
Transportation accounts for between one-third and two-thirds of total logistics costs; for most firms, it is the most important single element of logistics costs. Firms and their products’ markets are often separated geographically. Transportation increases the time and place utility of products by delivering them at the right time and to the right place where they are needed. By doing so, the customers’ level of satisfaction increases, which is a key factor for successful marketing.
A comprehensive discussion of transportation is beyond the scope of this text, so we focus here on essential issues of transportation systems, which are more related to the physical flows of materials.
Transport Modes and Their Characteristics
Various options for moving products from one place to another are called transportation modes. Road, rail, air, water, and pipelines are considered the five basic modes of transportation by most sources. In addition, digital or electronic transport is referred to as the sixth mode of transportation in some texts. Any one or more of these six distinct modes could be selected to deliver products to customers (Figure 2.2). However, all transport modes may not be applicable or feasible options for all markets and products.
Road
Road transport—also known as highway, truck, and motor carriage—steadily increased its share of transportation. Throughout the 1960s, road transport became the dominant form of freight transport in the United States, replacing rail carriage, and it now accounts for 39.8% of total cargo ton-miles, which is more than 68% of actual tonnage.
The key advantages of road transport over other transportation modes are its flexibility and versatility. Trucks are flexible because they offer door-to-door services without any loading or unloading between origin and destination. Trucks’ versatility is made possible by having the widest range of vehicle types, enabling them to transport products of almost
Transportation accounts for between one-third and two-thirds of total logistics costs; for most firms, it is the most important single element of logistics costs. Firms and their products’ markets are often separated geographically. Transportation increases the time and place utility of products by delivering them at the right time and to the right place where they are needed. By doing so, the customers’ level of satisfaction increases, which is a key factor for successful marketing.
A comprehensive discussion of transportation is beyond the scope of this text, so we focus here on essential issues of transportation systems, which are more related to the physical flows of materials.
Transport Modes and Their Characteristics
Various options for moving products from one place to another are called transportation modes. Road, rail, air, water, and pipelines are considered the five basic modes of transportation by most sources. In addition, digital or electronic transport is referred to as the sixth mode of transportation in some texts. Any one or more of these six distinct modes could be selected to deliver products to customers (Figure 2.2). However, all transport modes may not be applicable or feasible options for all markets and products.
Road
Road transport—also known as highway, truck, and motor carriage—steadily increased its share of transportation. Throughout the 1960s, road transport became the dominant form of freight transport in the United States, replacing rail carriage, and it now accounts for 39.8% of total cargo ton-miles, which is more than 68% of actual tonnage.
The key advantages of road transport over other transportation modes are its flexibility and versatility. Trucks are flexible because they offer door-to-door services without any loading or unloading between origin and destination. Trucks’ versatility is made possible by having the widest range of vehicle types, enabling them to transport products of almost