MEANING AND DEFINITION
“The process of moving an item from point
A to point B.”
“Safe, efficient, reliable, and sustainable
movement of persons and goods over time
Importance of transportation:
1) Place Utility.
2) Industrial Development.
3) Employment Opportunities.
4) High Standard of Living.
5) Distribution of Perishable Goods.
- Product is locked up during transit, hence inaccessible
- Positive amount of time is spent in transporting material.
- Time is a resource[Temporal Resource] expended in
- During the time product is locked up costs are incurred in
proportion of time.
- Administration costs, Salaries, Maintenance costs are
- Fuel costs are high[Creates air pollution, congestion,
It is a temporary storage in stationery vehicle. Product storage
is expensive in transport vehicle. In some situations Product is
done such as:
When the cost of unloading and reloading the product in the
Warehouse is more expensive.
When storage space is limited. Or,
At other times, temporary storage is used due to diversion. This
occurs when an original delivery destination is changed while
the inventory is in transit.
PRINCIPLES OF TRANSPORTATION
Types of Transportation
2. Rail Transport.
3. Water Transport.
4. Air Transport.
5. Pipeline Transport.
6. Ropeway Transport.
1. Door to Door Service.
2. Economical over short distances.
4.Limited Capital Expenditure.
1. Irregular and Unreliable.
2. Unsuitable for Long Distances
3. No Uniformity in Rates.
4. Limited Speed.
5. Affected by Weather.
1. High Speed.
2. Suitable for Long Distances.
3. Bulky Goods.
5. Large Carrying Capacity.
1. Huge Capital Expenditure.
2. High Overheads.
3. No Door to Door Service.
4. No Competition.
5. Inflexible Mode.
2. Quick service.
3. Natural Highways.
5. High Speed.
1. High Cost of Construction and Maintenance.
3. Limited Carrying Capacity.
4. International Restrictions.
5. Unsuitable for Bulky Goods.
1. Cheapest Mode of Transport.
2. Large Carrying Capacity.
4. Protection to Goods.
2. Huge Capital Expenditure.
3. High Cost of Maintenance.
4. No Door to Door Service.
5. Special Packing.
Generally liquids like oils,
crude, petroleum products are
More than 6350 KM of Pipeline
exits in India.
Currently 27% of petroleum
products are moved by
pipelines in India.
* Advantages of Pipeline;
1. Suitable for All Weather.
2. Low energy Consumption.
3. Space Utilization.
* Disadvantages of Pipeline;
1. State of Commodity to be transported is
3. High fix Costs.
Ropeway Transport is used for
transporting materials in hilly areas.
In India 16% of total area is hilly,
Currently in India nearly 178 Km rope
ways are used for transportation.
* Advantages of Ropeway;
1. Transports Bulk Material over Short
2. Lower Capital Costs.
3. Less environmental damage.
* Disadvantages of
1. Limited Scope.
COST STRUCTURE FOR EACH MODULE:
Mode Fixed Costs Variable Costs
Rail High- Equipments, Terminals
, Tracks ,etc
Road Low-Highway provided by
Medium-Fuel , Maintenance, etc
Water Medium-Ships and
Low-As capacity is huge
Pipeline Highest-Right of the way ,
construction, Equipment for
control station and Pumping
Lowest-Insignificant labour costs
Air Low-Aircraft and cargo
High- Fuel, labour, Maintenance
COST RATIO OF LOGISTICS ELEMENTS
Cost Ratio 17.5 11 29.5 11.9 5.5 17
Factors affecting Transportation Costs:
Product Related Factors Market Related Factors
Density Whether the Product is transported
Internationally, Seasonality of
Stow ability Location of Markets, which
determines the distance goods must
Ease or Difficulty of Handling Nature & extent of government
Liability Balance or imbalance of Freight
Traffic in to and out of a Market
Transportation and logistics systems have interdependent
relationships that logistics management needs
transportation to perform its activities and meanwhile, a
successful logistics system could help to improve traffic
environment and transportation development.
Since transportation contributes the highest cost among the
related elements in logistics systems, the improvement of
transport efficiency could change the overall performance of
a logistics system.