Major Transportation Modes
Air Road Pipeline Rail Water
• Cost components
• Fixed infrastructure
• Labor and fuel
• Variable –
• Key issues
• Location/number of
• Fleet assignment
• Crew scheduling
• Prices and
• Use of more than
one mode of
move a shipment
• Grown considerably
with increased use
• May be the only
option for global
• More convenient
for shippers – one
• High fixed cost
• Primarily for crude
• Best for large and
• Pricing structure
encourages use for
• Move commodities
over large distances
• High fixed costs in
• Scheduled to
• Transportation time
can be long
• Limited to certain
• Ocean, inland
• Very large loads at
very low cost
• Dominant in global
Any operation that stores, repackages, stages, sorts, or centralizes goods or
Small shipments in ...
Large economical shipments out ...
From a logistics perspective, customer service is the outcome of all logistics
activities or supply chain processes.
Customer service, when utilized effectively, is a prime variable that can have a
significant impact on creating demand and retaining customer loyalty.
Order entry and ends with delivery of product to customers.
Equipment service maintenance other technical support.
The speed and dependability with which items ordered can be made available.
oTo facilitate storage and handling.
oTo promote better utilization of transport equipment.
oTo provide product protection.
oTo promote the sale of the product.
oTo change the product density.
oTo facilitate the use of the product.
oTo provide reuse value for the customer.
oEconomies of Scale
Risk In Products
oPerishability (fresh fruits and whole blood)
oFlammability tendency to explore (gas, oil)
oValue, ease be stolen (pens. watches. cigarettes)
oSpecial treatment, whether transportation, storage or packaging, adds to the
cost of distribution.