1. LOGISTICS MANAGEMENT TRANSPORTATION
 Logistikos (Greek) and Logisticos (Latin) meaning “science of Transportation choices will affect product pricing, on-time delivery
computing and calculating. performance, and the condition of goods when they arrive all of
 Tries to have the right product, in the right quantity at the right which affects consumer satisfaction.
place at the right time with the right cost.
Major Forms of Transportation
Basic Targets: Quality of Service and Low cost
Logistics = Supply + Materials Management + Distribution In shipping goods to its warehouses, dealers and customers, the
company can choose among five transportation modes as follows:
Scientific Definition: process of planning, implementing and
controlling the efficient, effective flow and storage of goods, services 1. Railroad – This method’s advantage is its ability to handle
and related information from point of origin to point of consumption bulky products at lowest cost.
for the purpose of conforming to customer requirements 2. Trucks or Motor Transportation – This is characterized by
the ability to move small shipments economically at varying
Key Components / Key Activities sizes , short distances and deliver shipments to any point
A. Core – contribute most of the total cost of logistics or they are in the country served by road and highways.
the essential to the effective coordination and completion of the
logistics task Types of Carriers:
1. Customer service (Marketing Department) – customer a. Common carriers – provides services between
needs predetermined points on a scheduled basis and is
2. Transportation – movement of goods from supplier to available to all shippers at standard times. This
buyer, most fundamental and important component serves the public at large, moving goods of all types.
3. Inventory Management – How much and when to order, These are public utility vehicles.
Purchase control b. Contract carriers – is an independent organization
4. Information flows and order processing – order checking, selling transportation services to others on a contract
technical details such as price, delivery period, payment basis. They have formal arrangements with
terms, acknowledgement of orders. customers for transporting goods, usually for definite
B. Support periods of time. These are rented cargo trucks.
1. Warehousing – space determination, stock layout, stock c. Private carriers – the shipper owns its own truck.
placement These are operated by business firms or individuals
2. Materials Handling – equipment selection& replacement for the transportation of their own goods.
policies, order picking procedures, stock storage and
timing 3. Water Vessels – Major advantage of water transportation is
3. Purchasing – supply source selection, purchase timing, its low cost but its greatest disadvantage is its slowed
purchase quantities shipping mode. Mostly used for bulky, non-perishable
4. Protective Packaging – designed for handling, storage, products such as grain, petroleum products, cement, steel
protection from loss/damage and coal.
5. Cooperate with production/operations – specify aggregate 4. Pipelines – Used primarily by petroleum industry to move
quantities sequence and time, production output, schedule oil and natural gas.
supplies 5. Airplanes – Fastest but expensive transportation for
6. Information Maintenance – data analysis, control shipments. High-value, low weight goods are often
procedures shipped by air. Although transporting cost of air shipments
may be higher, total cost of distribution may be lower
WAREHOUSING – a storage place wherein finished goods are because of reduction in packing, unpacking expenses, and
stored till they are sold. Effectiveness of organization’s elimination of outlaying warehouses.
marketing strategy depends on making the right decision
regarding warehouse. Containerization – shippers combining two or more transportation
Warehouse are treated as switching facilities rather than modes. This is consists of putting goods in boxes or trailers that are
storage place. It is a major cost center, many customer easy to transfer between two transportation modes.
problem are the direct result of improper warehousing
management. a. Piggyback describes the use of rail and trcks.
b. Fishyback, water and trucks
Major issues that need to be considered for warehouse: c. Trainship, water and rail
1. Location, size & number of warehousing facilities d. Airtruck, air and trucks
2. Warehouse layout
3. Design of building Shippers consider the following criteria:
4. Ownership of the warehouse 1. Speed
2. Frequency
3. Dependability
4. Capability
5. Availability
6. Traceability
7. Cost

2. Factors determining transportation rates among different
commodities:
1. The distance involved. Generally speaking, the longer the
haul, the greater is the cost of services to be provided.
2. Loading characteristics of the articles. The greater the
possibility for product damage or breakage during loading,
the higher is the rate.
3. The risk of loss or damage
4. The volume in which the traffic moves and regularity of
traffic movement. The more regular the movement is, the
greater the economy.
5. The amount of liability assumed by the carrier.
6. The type of equipment required. Goods requiring
refrigeration while in-transit have higher rate than those
needing box packing only.
7. Special services required like livestock, fruits, vegetables
and meat require proper care during transit.