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
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Hence, variable costs are influenced by both distance and shipment size.
Water
Water carriage—as the oldest mode of transportation—accounts for 5% of total freight ton-miles (around 3.3% of actual tonnage) in the United States. Sampson et al. describe the nature and characteristics of water carriage as follows:
Water carriage by nature is particularly suited for movements of heavy, bulky, low-value-per-unit commodities that can be loaded and unloaded efficiently by mechanical means in situations where speed is not of primary importance, where the commodities shipped are not particularly susceptible to shipping damage or theft, and where accompanying land movements are unnecessary.
As already mentioned, the majority of commodities transported by water are semi processed and raw materials; thus, water transportation competes primarily with rail and pipeline. Water carriage can be broken into the following distinct categories:
1. Inland waterways (such as rivers and canals)
2. Lakes
3. Coastal and intercostals oceans
4. International deep sea
Water transportation service is limited in scope, mainly for two reasons: its limited range of operation and speed. Water service is confined to waterway systems; thus, unless the origin and the destination of movement are located on waterways, it needs to be supplemented by another transportation mode (rail or motor carrier). In addition, the average speed of water carriage is
Transportation, a system for moving people or goods from one place to another. Throughout the history there are many ways of transportation, such as road, boat, airplane that only appeared around last century, etc. People use these tools to transport goods or themselves from one destination to another. Even though different vehicles provide different speed and volume for transportation, the most common and beneficial route is the land route. The dominant way of transportation on land is always the train. The train not only can travel at a high speed it can also carry many things. The railroad played a huge role in the human history making it one of human’s best invention.
Of the three forms of transportation, rail has the highest fixed costs, motor carriers the greatest variable costs, and air transport, the greatest variable costs of service and logistics optimization. Starting with rail, the cost structure has the highest fixed cost components, driven by infrastructure and terminal costs. Rail is therefore the most difficult to negotiate a lower transportation cost for, as the fixed costs form an inflexible pricing structure for retail service providers. The quality of rail service varies significantly across nations and regions as well, leading to greater variability in costs when a shipment moves across national and regional boundaries. Given the highly fixed cost structure of rail systems, there is significant room for improvement from an efficiency standpoint. The use of containerization is continually adding to greater efficiencies to this mode of transport (Jennings, Holcomb, 1996).
Another challenge for people is when you have to transport water from one place to other places for them not to dry up like the Colorado River in El Mayor Mexico. For example the Colorado River some of its water is transported ported through, eastward across the Rocky Mountains to Denver and other cities in Colorado. The Colorado River Aqueduct carries water to metropolitan Los Angeles, and the Central Arizona Project supplies the Phoenix and Tucson areas.” The American canal provides water for the Imperial Valley of southern California, the imperial valley is very active for
day. The Railroads created a cost efficient way to move people or supplies, even its earliest days
For centuries, various civilizations have developed several methods to redirect water from its source to a specified locations. Early Egyptians used a shaduf to lift buckets of water from rivers and as the need to divert water further away from groundwater sources, the more sophisticated the methods became. The Romans built extensive quanats to deliver a fresh water supply while providing a sewage system. Ounce urbanization ensued, the demand for water would require this resource to travel hundreds of miles to reach its destination. Aqueducts, canals, ditches, and dams are all used today to transport water from areas who have an abundance of potable water to areas that lack drinkable water. This was exemplified in the short film “Water on the Edge”. The film addresses the many problems California faces after decades of using various methods for water diversion. Some of the problems include outdated watering systems, maintaining the health of natural systems, and providing water throughout the state while in a drought.
Until the invention of railways in 1814 water transportation was the preferred method. Starting with the use of natural bodies of water and expanding to man made ones. Such as the Erie canal that connects the great lakes to the Atlantic Ocean with the Hudson river. The economic difference made by this canal was so large the cost of a bag of flour went from $120 to $6. This change in transport made New York city go from the 5th most active maritime port to 1st by 1850. These changes to the American landscape vastly helped economic quality, that would better the American people on a short term basis.
Container vessels, 18-wheelers, boxcars: these are probably the first things that come to mind when we think of freight. While ships, trucks, and railroads are some of the most significant components of freight, very complex systems and networks are also in place to support moving the goods that businesses and consumers want and need to nearly every corner on the planet. Of course, without actual goods, there is nothing to move, leading experts to refer to freight activities as goods movement.
Transportation During the Industrial Revolution In the early stages of the Industrial Revolution many people would find out their simple way of life would become very difficult when it came to transportation. When people transported goods they would usually transport it via merchant ship. The merchant ship would bring the people and goods from different places among the globe.
The majority of movement of materials and goods across continents is through container ships, however, in some cases, planes are used to transport goods. Trucks and trains move materials and goods and within a country or a continent. In some cases, ships sail in rivers, as is the case in parts of Canada. The shares of freight transport as the percentage of the total tone-km by road, inland waterways, and railways in the EU are 75.9%, 6.7%, and 18.4% respectively (EUROSTAT, 2016). In the USA, trucks are the most used means of transportation for moving freight up to 750 miles. Trains move items in bulk beyond the 750-mile limit up to 2000 miles (United States Department of Transportation, 2015).
The availability of water is an issue that requires careful management and planning in order to maximize access. Areas in the Western United States have rapidly growing populations without the natural water sources to sustain them. The art of getting water from where it is or who has it to where it is needed or who needs it is the practice of water trading. Deals made between states to ensure access to water.
Today, container ships are used as major transport method between countries, and most of products, which are called dry cargo such as daily products, processed food, timbers and metals, are transported by container ship.
Passenger and freight transportation systems have a number of similarities in the investment evaluation process, with a few significant differences. The table below offers an initial look at the stakeholders for each and their relative financial interests.
Initially, there is the mode of land transportation. Roads, rails and pipelines fall under this category. These land logistics are very important because they extend the delivery services for air and water transport from airports and seaports. The main transport mode of land logistics are railway, road freight and pipeline transport. The advantage of railway transport is that it has carrying capacity and lower influences by weather conditions
Transport plays a critical role in the supply chain and according to Bhattacharya et al. (2014) it is becoming one of the key components of the whole supply chain valuation for many organizations. Transportation is the movement of good from one location to another. Supply chain is a network of individuals, organizations, activities, resources and technology that is involved in formation and sale of a product, which is from the delivery of source materials from the supplier to the manufacturer, through to the end user. Hopkins (2007) states that supply chain professionals look at whole business procedures, which is from raw materials to manufacturing, wholesaling and retailing. And by
As quoted by Rodrigue, J-P (2013), “the most important transport problems are often related to urban areas and take place where transport systems fails to satisfy the various requirements of urban mobility because of several reasons. Productivity of any urban area is highly dependent on its transport system and also its efficiency to regulate goods, workers and consumers between multiple origins and destinations”.