Modes of Transportation -Air transport -Transport -Cost influencing transportation -Selection of mode

1. Air Transport

2. AIR TRANSPORT
Air transport has the highest speed compared to any other transport .
Operating cost are highest but fixed cost are lower than rail or road.
Air transport are highly reliable during emergency and seasonal demand

3. ADVANTAGES
 Bring closer
Far and new market within reach.
 Flexible
Carry both heavy & bulky
 Less damage to goods
Minimum handling
 High Speed
Fastest mode of transport ,suitable for long distance.
 Quick service
Comfortable, efficient & quick transport service

4. DISADVANTAGES
 Restricted Products
Certain items are not allowed
 Narrow coverage
Air transport facilities are not available everywhere because
airports are in big cities.
 Risky
Because a minor accident may lead to substantial loss.
 Very Costly
Costliest mode of transport
 Unreliable
 Due to the weather condition

5. Rope way transport
Used for transporting materials in
hilly areas. It connect point of
supply and demand by shortest
route.
ADVANTAGES DISADVANTAGES
•Transports bulk material over short
distance
• Limited scope of operation because
it can function only on hilly area
•Lower capital cost •Its slow mode of transport
•Its ideal for hilly area
•Does not pollute the environment

6. Transport formats
Common Carrier
Private carriers
Contract carrier
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7. Common Carrier
Basic foundation of public transportation is common
carrier.
Offer service at non-discriminatory price to public
Contract carrier
Provides transport services for select customers.
Agreement between a carrier and a shipper for a specified transportation service

8. Private carriers
A firm providing its own transportation.
It’s not for hire, not carry hazardous goods and takes care of employee safety, vehicle
safety
E E x x e e m m p p t t c c a a r r r r i ie e r r It does not follow economic regulation
Exempt commodities include unprocessed agricultural products and extracted
raw material.

9. Factors influencing transportation cost and
Product related
pricing
 Density
Refers to weight and space aspects
Weight and space are important
 Stowability
Product dimensions
Items with rectangular shapes
Market related
Product related factors

10.  Handling
Equipments required for loading or unloading
 Liability
products are prone to damage
 Location
 Govt regulation
 transportation
Market related factors

11. Cost associated with transportation
Movement cost
Inventory costs
Obsolescence
Insurance
Cost of fuel Packaging
to drive the
vehicle
Inventory
holding cost,
Longer the
inventory =
Larger cost
Transit time is
larger the
inventory
becomes
waste, when it
arrives
Its dependant
on mode
selected as
bad road
condition
needs strong
packaging.
Cost
proportion
al to risk
of damage
and loss in
transit

12. Freight rate structure
 These are transportation rates charged by carriers for shipping
the goods to buyers.
Principles of freight rate
 Should cover all cost of transportation
 Vehicle utilization
•Terminal detention
•Nature of goods
•Density, Consignment
•Stowability
Public use
Govt policy

13. TRANSPORT INFRASTRUCTURE
For transportation, strong infrastructure is primary
Elements of transportation infrastructure
Terminal
Facility
Vehicles
Right of Way
Prime movers
Carrier org
Well
maintained
loading and
unloading
facilities ,
platforms,
railway road
Their size,
shape and
speed Passage for
vehicle
should be in
good
condition
These are the
transportation service
providers in business,
TRANSPORTATION=
BUISNESS

14. Transportation Hidden Cost
Transportation of raw materials, project materials and
equipment include 20-30% of total capital cost.
In India, entrepreneurs get incentives set up manufacturing
facilities in rural area but they lack infrastructure.
Eg:-Vehicles get stuck in muddy road- materials doesn't reach
to site, vehicle accidents these increase transportation cost.
Delays- non receipt of equipment, machinery, raw
materials-delays run into months.
Due to such delays the project suffer heavy loss

15. SELECTION OF MODE OF TRANSPORTATION
Characteristic of goods Cost
Availability
Delivery time
Distance
Frequency
Goods are expensive
then fastest mode of
transportation
Depending upon the
nature of goods
Satisfy customers the
goods should be available,
mode of transportation -
accessible
Depends on the distance. Short
distance= road way, long=sea or air
way
Before selection a mode
of transport the cost
factor is imp
Details on delivery
such as schedule
delivery time, date of
delivery etc
Selecting mode of transport its service
frequency should be analyzed ,no. of
times the carrier go to and fro towards
source and destination