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(1) INTRODUCTION:-

We use various products in our daily life. But do we know where are they produced? Many

of them are produced at different places far away from our locality. So how do we get them

at our place? These are carried on from all those places through rail, road or air and are made

available to us at our locality. You must have seen trucks, tempo, bullock carts etc., whichcarry products or even raw materials from one place to another. Similarly, you also must have

seen people travelling from one place to another by buses, trains, cars, scooters, rickshaws,

cycles, etc. 

This movement of goods and individuals is very important in business. Because of this, raw

materials reach the place of manufacture, finished products reach the place of sale or

consumption, individuals move around to manage the business, etc. In this lesson, let us learn

how goods and passengers move from one place to another.

Since logistics advanced from 1950s, there were numerous researches focused on this area in

different applications. Due to the trend of nationalisation and globalisation in recent decades,

the importance of logistics management has been growing in various areas. For industries,

logistics helps to optimise the existing production and distribution processes based on thesame resources through management techniques for promoting the efficiency and

competitiveness of enterprises. The key element in a logistics chain is transportation system,

which joints the separated activities. Transportation occupies one-third of the amount in the

logistics costs and transportation systems influence the performance of logistics system

hugely. Transporting is required in the whole production procedures, from manufacturing to

delivery to the final consumers and returns. Only a good coordination between each

component would bring the benefits to a maximum.

(2) Meaning of Transport:-

Transport refers to the activity that facilitates physical movement of goods as well as

individuals from one place to another. In business, it is considered as an auxiliary to trade,

that means, it supports trade and industry in carrying raw materials to the place of production 

and distributing finished products for consumption. Individuals or business firms that engage 

Business Studies themselves in such activities are called transporters. Generally, transporters

carry raw material, finished products, passengers, etc. from one place to another. So it

removes the distance barrier. Now-a-days goods produced at one place are readily available

at distant places. People move freely throughout the world because of transport. It is

associated with every step of our life. Without transport, we, as well as business units cannot

move a singe step.

Transport or transportation is the movement of people, animals and goods from one

location to another. Modes of transport include air,  rail,  road,  water,  cable,  pipeline, and

space. The field can be divided into infrastructure,  vehicles, and operations. Transport is

important since it enables trade between peoples, which in turn establishes civilizations.

Transport infrastructure consists of the fixed installations necessary for transport, and may be

roads,  railways,  airways,  waterways,  canals and pipelines, and terminals such as airports, 

railway stations,  bus stations,  warehouses, trucking terminals, refuelling depots (including

fuelling docks and fuel stations), and seaports. Terminals may be used both for interchange of 

passengers and cargo and for maintenance.

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Vehicles travelling on these networks may include automobiles,  bicycles,  buses,  trains, 

trucks,  people,  helicopters, and aircraft. Operations deal with the way the vehicles are

operated, and the procedures set for this purpose including financing, legalities and policies.

In the transport industry, operations and ownership of infrastructure can be either public or

private, depending on the country and mode.

Passenger transport may be public, where operators provide scheduled services, or private. 

Freight transport has become focused on containerization, although bulk transport is used for

large volumes of durable items. Transport plays an important part in economic growth and

globalization, but most types cause air pollution and use large amounts of land. While it is

heavily subsidized by governments, good planning of transport is essential to make traffic

flow, and restrain urban sprawl. 

(3) Importance of Transport:-

Followings are the points of importance of transport.

a. Makes available raw materials to manufacturers or producers: Transport makes it

possible to carry raw materials from places where they are available, to places where they can

be processed and assembled into finished goods. 

b. Makes available goods to customers: Transport makes possible movement of goods from

one place to another with great ease and speed. Thus, consumers spread in different parts of 

the country have the benefit of consuming goods produced at distant places. 

c. Enhances standard of living: Easy means of transport facilitates large-scale production at

low costs. It gives consumers the choice to make use of different quantities of goods at

different prices. So it raises the standard of living of the people. 

d. Helps during emergencies and natural calamities: In times of national crisis, due to war

or internal disturbance, transport helps in quick movement of troops and the supplies needed

in the operation. 

e. Helps in creation of employment: Transport provides employment opportunity to

individuals as drivers, conductors, pilots, cabin crew, captain of the ship, etc. who are directly

engaged in transport business. It also provides employment to people indirectly in the

industries producing various means of transport and other transport equipments. People can

also provide repairing and maintenance services by opening service centres at convenient

locations. 

f. Helps in labour mobility: Transport helps a lot in providing mobility to workers. You maybe aware that people from our country go to foreign countries to work in different industries

and factories. Foreigners also come India to work. In India, people also move from one part

to another in search of work. Similarly, it is not always possible to have workers near the

factory. Most industries have their own transport system to bring the workers from where

they reside to the place of work. 

g. Helps in bringing nations together: Transport facilitates movement of people from one

country to another. It helps in exchange of cultures, views and practices between the people

of different countries. This brings about greater understanding among people and awareness

about different countries. Thus, it helps to promote a feeling of international brotherhood.

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(4) The Role of Transportation in the Supply Chain:-

Transportation refers to the movement of product from one location to another as it makes its

way from the beginning of a supply chain to customer’s hands. Transportation plays a key

role in every supply chain because products are rarely produced and consumed in the same

location. Transportation is a significant component of the cost most supply chain incurs.

Any supply chain’s success is closely linked to the appropriate use of transportation. Wal-

Mart has effectively used a responsive transportation system to lower its overall costs.

The role that transportation plays in logistics system is more complex than carrying goods for

the proprietors. Its complexity can take effect only through highly quality management. By

means of well-handled transport system, goods could be sent to the right place at right time in

order to satisfy customers’ demands. It brings efficacy, and also it builds a bridge between

producers and consumers. Therefore, transportation is the base of efficiency and economy in

business logistics and expands other functions of logistics system. In addition, a good

transport system performing in logistics activities brings benefits not only to service qualitybut also to company competitiveness. 

(5) Modes of Transport:-

We find that basically transport is possible through land, air or water, which are called the

different modes of transport. On land we use trucks, tractors, etc., to carry goods; train, bus,

cars etc. to carry passengers. In air, we find aeroplanes, helicopters to carry passengers as

well as goods. Similarly in water we find ships, steamers, etc., to carry goods and passengers.

All these are known as various means of transport. 

Let us discuss about various modes of transport.

The modes of transport can be broadly divided into three categories: Land transport, Water 

Transport and Air transport. 

(I) Land Transport: 

Land transport refers to activities of physical movement of goods and passengers on land.

This movement takes place on road, rail, rope or pipe. So land transport may further be

divided into Road transport, Rail transport, Ropeway transport, pipeline transport.Let us

know the details about each of them.

a. Road Transport

Roads are the means that connect one place to another on the surface of the land. You must

have seen roads in your village, in towns and cities. Not all of them look alike. Some of them

are made of sand and some may be of chips and cement or coaltar. You find different

vehicles plying on roads like bullock carts, cycles, motorcycles, cars, truck, buses, etc. All of 

these constitute different means of road transport. The means of road transport may be

divided into three types: - 

i. Man driven;

ii. Animal driven; andiii. Motor driven. 

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You might have seen individuals carrying goods on their head or back, in bicycles or on

thelas, move from one place to other. People also ride a bicycle or use rickshaw to travel

short distances. We also find animal driven vehicles like carts (drawn by bullocks, camels,

horses, donkeys, etc.) used in rural areas to carry crops, straw, fodder and sometimes even

people. Sometimes even animals are directly used to carry goods from one place to another.

In areas, which are normally covered with snow throughout the year, we find sledges pulledby dogs used to carry both passengers and goods. 

Compared with man driven and animal-driven means of road transport, motor driven means

of transport have become more important over the years. This is due to their speedy

movement and larger carrying capacity. Extension of roads to every corner of the country

have also enhanced the use of motor driven transport. The types of motor vehicles used to

carry goods and passengers include auto-rickshaws, scooters, vans, buses, tempos and trucks,

etc. In Kolkata, tramway also forms part of road transport for carrying passengers.

Advantages of Road transport

Road transport has the following advantages.(i) It is a relatively cheaper mode of transport as compared to other modes. 

(ii) Perishable goods can be transported at a faster speed by road carriers over a short

distance. 

(iii) It is a flexible mode of transport as loading and unloading is possible at any destination.

It provides door-to-door service. 

(iv) It helps people to travel and carry goods from one place to another, in places which are

not connected by other means of transport like hilly areas.

Limitations of Road transport

It has the following limitations.

(i) Due to limited carrying capacity road transport is not economical for long distance  

transportation of goods. 

(ii) Transportation of heavy goods or goods in bulk by road involves high cost.

(iii) It is affected by adverse weather conditions. Floods, rain, landslide, etc., sometimes

create obstructions to road transport.

b. Rail transport

Transportation of goods and passengers on rail lines through trains is called rail transport. It 

occupies an important place in land transport system of our country and is the mostdependable mode of transport to carry goods and passengers over a long distance. Besides

long distance, local transport of passengers is also provided by local trains or metro-rail in

some metropolitan cities. Rail transport is available throughout the country except some hilly

or mountainous regions. In India two types of trains are found. One is passenger train and

other is goods train. While passenger trains carry both human beings and a limited quantity of 

goods, the goods trains are exclusively used for carrying goods from one place to another.

These trains are driven by rail engines and they use steam, diesel or electric power to move.

Let us now discuss the advantages and limitations of rail transport. 

Advantages of Rail transport

(i) It is a convenient mode of transport for travelling long distances. 

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(ii) It is relatively faster than road transport.

(iii) It is suitable for carrying heavy goods in large quantities over long distances.

(iv) Its operation is less affected by adverse weathers conditions like rain, floods, fog, etc. 

Limitations of Railway transport

(i) It is relatively expensive for carrying goods and passengers over short distances. 

(ii) It is not available in remote parts of the country.

(iii) It provides service according to fixed time schedule and is not flexible for loading or 

unloading of goods at any place. 

(iv) It involves heavy losses of life as well as goods in case of accident. 

c. Pipelines transport

In modern times, pipelines are used for various purposes. Water supply to residential and 

commercial areas are carried on with the help of pipeline. Petroleum and natural gas are also

transported from one place to another through pipelines. This is the most convenient as wellas economical mode of transport for petroleum as well as natural gas in comparison to road

and rail transport, provided the volume to be transported is large. But the cost of installation

and maintenance requires large capital investment. 

d. Ropeway transport

Ropeway refers to a mode of transport, which connects two places on the hills, or across a  

valley or river. In the hilly areas, trolleys move on wheels connected to a rope and are used  for carrying passengers or goods, especially building materials, food, etc. The famous ―Uran  

Khatola Jagdamba‖ in Gujarat that carries pilgrims to the temple is an example of ropeway 

transport, which carries more than 100 passengers at a time.

(II) Water transport 

Water transport refers to movement of goods and passengers on waterways by using various

means like boats, steamers, launches, ships, etc. With the help of these means goods and

passengers are carried to different places, both within as well as outside the country. Within

the country, rivers and canals facilitate the movement of boats, launches, etc. Since the goods

and passengers move inside the country, this type of transport is called inland water transport.

When the different means of transport are used to carry goods and passengers on the sea route

it is termed as ocean transport. Let us know further about these two types of water transport.

I. Inland water transport

Inland water transport use boats, launches, barges, streamers, etc., to carry goods and 

passengers on river and canal routes. These routes are called inland waterways and are used

in domestic or home trade to carry bulky goods. Passenger transport through waterways is not

so popular in our country. Inland water transport system exists only in few states like. West

Bengal, Andhra Pradesh, Assam, Tamil Nadu, etc. 

II. Ocean transport

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Ocean transport refers to movement of goods and passengers with the help of ships through

sea or ocean waterways. It plays an important role in the development of international trade.

It is also used for transporting goods and passengers in the coastal areas. Ocean transport has

its fixed route, which links almost all the countries of the world.

Sea transport may be of the following two types. 

i. Coastal Shipping - In this transport, ships ply between the main ports of a country. This

helps in home trade, and also in carrying passengers within the country. 

ii. Overseas shipping - In this transport, ships ply between different countries separated by

sea or ocean. It is mainly used for promotion and development of international trade. It is

economical means of transport to carry heavy machines and goods in bulk. Overseas

transport is carried out on fixed routes, which connect almost all the countries. In ocean

transport, different types of ships are used to carry passengers and goods. These may be

classified as under.

a. Liners - A liner is a passenger or cargo vessel, which belongs to a regular shipping

company. These ships ply over a fixed route according to a prescribed schedule or timetable. 

b. Tramps - A tramp is a cargo ship, which does not make regular trips but plies whenevercargo is offered to it. It does not follow a fixed route or a prescribed timetable like that of 

liners.

Advantages of water transport

Water Transport has the following advantages:

a. It is a relatively economical mode of transport for bulky and heavy goods.

b. It is a safe mode of transport with respect to occurrence of accidents.

c. The cost of maintaining and constructing routes is very low as most of them are naturally  

made. 

d. It promotes international trade. 

Limitations of water transport

Water transport has the following limitations. 

i. The depth and navigability of rivers and canals vary and thus, affect operations of different

transport vessels.

ii. It is a slow moving mode of transport and therefore not suitable for transport of perishable

goods.

iii. It i s adversely affected by weather conditions.

iv. Sea transport requires large investment on ships and their maintenance.

(III) Air transport 

This is the fastest mode of transport. It carries goods and passengers through airways by

using different aircrafts like passenger aircraft, cargo aircraft, helicopters, etc. Besides

passengers it generally carries goods that are less bulky or of high value. In hilly and

mountainous areas where other mode of transport is not accessible, air transport is an

important as well as convenient mode. It is mostly used for transporting goods and

passengers during natural calamities like earthquake and floods, etc. During war, air transport

plays an important role in carrying soldiers as well as supplies to the required areas. Air

transport may be classified as domestic and international air transport. While domestic airtransport mainly facilitates movement within the country, international air transport is used

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for carrying goods and passengers between different countries. Air transport is carried out in

fixed air routes, which connect almost all the countries.

Advantages of Air transport

It has the following advantages. i. It is the fastest mode of transport. (not an advantage)

ii. It is very useful in transporting goods and passengers to the area, which are not  accessible

by any other means. 

iii. It i s the most convenient mode of transport during natural calamities. 

iv. It provides vital support to the national security and defence.

Limitations of air transport

It has the following limitations.

i. It is relatively more expensive mode of transport.

ii. It is not suitable for transporting heavy and bulky goods.iii. It i s affected by adverse weather conditions.

iv. It is not suitable for short distance travel.

v. In case of accidents, it results in heavy losses of goods, property and life.

(6) Advantages and disadvantages of Different modes of transport:-

Transportation plays a major role in the economy. It increases the production efficiency and it

links to the logistics system. Vehicle should have some characteristics which are used for

easy transport of goods and services.

Transportation is generally of two types. They are public transport and transport for non

generic-use. Public transport is nothing but which is used for meeting the needs of all sectors

of the people for transportation of goods and services. Transport non-generic will be for the

plant operations here the transportation means may be by the non-transport enterprises.

Coming to the different types of transport which are usage generally are:

1. Rail: 

 Advantages: 

  Ability of loading and unloading goods and services is more.

  Frequency of delivering the goods over long distances is more.

  Climatic conditions have no effect

  No traffic or congestion easy movement of the vehicle.

 Disadvantages: 

  Capital and initial investments are more.

  High material usage for the construction and even the fuel consumption

  The above are some of the advantages and disadvantages of using the rail.

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2. Road: 

 Advantages: 

  High flexibity and ability to move the vehicles fastly.

  Uses different routes to reach the destination quickly.

  Does door to door service  High safety for the cargo.

  Chance to select the carrier which is suitable for carrying the goods.

 Disadvantages: 

  It mostly depends on climatic conditions.

  High cost for long distances.

  Productivity is low.

  Some of the advantages and disadvantages are discussed above.

3. Air:  Advantages: 

  Highest speed

  Even delivers goods to remote places.

  High reliability

 Disadvantages: 

  Highest cost of transportation.

  Even adverse weather conditions effect the transportation.

  Material and fuel consumption is costly.

4.Water: 

 Advantages: 

  It is economical mode for transporting heavy loads and even cargo.

  It is the safest mode which provides convenience to the people without accidents.

  Cost of construction and maintenance is very low.

  It even provides international transport

 Disadvantages: 

  It is highly affected by the weather conditions.

  It requires large initial investment

  It is a slow process.

(7) Impact of Transportation:-

(I) Economic:

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Transport is a key component of growth and globalization, such as in Seattle, Washington, 

United States Transport is a key necessity for specialization — allowing production and

consumption of products to occur at different locations. Transport has throughout history

been a spur to expansion; better transport allows more trade and a greater spread of people.

Economic growth has always been dependent on increasing the capacity and rationality of transport.[26]

 But the infrastructure and operation of transport has a great impact on the land

and is the largest drainer of energy, making transport sustainability a major issue.

Modern society dictates a physical distinction between home and work, forcing people to

transport themselves to places of work or study, as well as to temporarily relocate for other

daily activities. Passenger transport is also the essence of tourism, a major part of recreational

transport. Commerce requires the transport of people to conduct business, either to allow

face-to-face communication for important decisions or to move specialists from their regular

place of work to sites where they are needed.

(II) Planning:

Transport planning allows for high utilization and less impact regarding new infrastructure.

Using models of  transport forecasting, planners are able to predict future transport patterns.

On the operative level, logistics allows owners of cargo to plan transport as part of the supply

chain. Transport as a field is studied through transport economics, the backbone for the

creation of regulation policy by authorities. Transport engineering, a sub-discipline of civil

engineering, and must take into account trip generation,  trip distribution, mode choice and

route assignment, while the operative level is handled through traffic engineering.

The engineering of this roundabout in Bristol, United Kingdom, attempts to make traffic flowfree-moving Because of the negative impacts made, transport often becomes the subject of 

controversy related to choice of mode, as well as increased capacity. Automotive transport

can be seen as a tragedy of the commons, where the flexibility and comfort for the individual

deteriorate the natural and urban environment for all. Density of development depends on

mode of transport, with public transport allowing for better spacial utilization. Good land use

keeps common activities close to peoples homes and places higher-density development

closer to transport lines and hubs; minimize the need for transport. There are economies of 

agglomeration. Beyond transportation some land uses are more efficient when clustered.

Transportation facilities consume land, and in cities, pavement (devoted to streets andparking) can easily exceed 20 percent of the total land use. An efficient transport system can

reduce land waste.

Too much infrastructure and too much smoothing for maximum vehicle throughput means

that in many cities there is too much traffic and many — if not all — of the negative impacts

that come with it. It is only in recent years that traditional practices have started to be

questioned in many places, and as a result of new types of analysis which bring in a much

broader range of skills than those traditionally relied on — spanning such areas as

environmental impact analysis, public health, sociologists as well as economists who

increasingly are questioning the viability of the old mobility solutions. European cities are

leading this transition.

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(III) Environment:

Traffic congestion persists in São Paulo, Brazil despite the no-drive days based on license

numbers. Transport is a major use of  energy and burns most of the world's petroleum. This

creates air pollution, including nitrous oxides and particulates, and is a significant contributor

to global warming through emission of  carbon dioxide, for which transport is the fastest-

growing emission sector. By subsector, road transport is the largest contributor to global

warming. Environmental regulations in developed countries have reduced individual vehicles'

emissions; however, this has been offset by increases in the numbers of vehicles and in the

use of each vehicle. Some pathways to reduce the carbon emissions of road vehicles

considerably have been studied. Energy use and emissions vary largely between modes,

causing environmentalists to call for a transition from air and road to rail and human-powered

transport, as well as increased transport electrification and energy efficiency. Other

environmental impacts of transport systems include traffic congestion and automobile-oriented urban sprawl, which can consume natural habitat and agricultural lands. By reducing

transportation emissions globally, it is predicted that there will be significant positive effects

on Earth's air quality, acid rain, smog and climate change.

(8) Six Issues That Impact SCM Effectiveness:-

SCM success just doesn't happen. Six issues must be recognized for maximizing supply chain

management. These are--

not about shipping or warehousing; it is logistics. The logistics focus is--

ion of goods. The modes andcarriers selected must complement the supply chain strategy and must be responsive to the

needs of customers and the entire chain.

both internal--the enterprise--and external, with customers and suppliers.

cost of discrete cost factors such as freight or warehousing.

in management is tailored to and responsive to each customer. To

gain a competitive advantage, service and time compression is vital to keep customers

replenished and inventories under control.

rk, must be both internal and

external. If it is not, then there are gaps, potential for delays and errors, and failures in thesupply chain process.

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challenge with international is that it significantly extends the supply pipeline and requires

that the logistics skills be in place. Differences in international must be recognized in

designing and managing the supply chain. Ships do not sail every day. Factors such as

customs clearance and document preparation and handling and their possible delays on

product movement must be recognized in the supply chain planning. Information technologyand its applications may not be as advanced in some countries. The concept of supply chain

management and logistics may not be practiced.

beyond the first tier of vendors. It must involve the vendors' vendors, and so on back through

the manufacturing process. The challenge is making the concept understood as you penetrate

deeper into the supply chain. If the first vendor does not adequately understand the concept,

then his vendors will not. It also pushes the information technology envelope beyond the

immediate enterprise and its suppliers and customers.

requirements; there is no universal way of doing supply chain management. This means that

vendors must respond to each customer if he is to be a viable supply chain participant. Aspecific way of handling each customer, his orders, his shipments, his invoices, and more,

must be developed and customized to that customer. This creates challenges within

organizations who look at how to efficiently perform a task, such as order entry or shipping.

They must instead be flexible and agile.

Some appear on the balance sheet. And some do not appear on either. Traditional accounting

concepts, formed around Generally Accepted Accounting Principles, cannot identify and

measure the real cost and savings of SCM. They do not track the process, instead they track 

individual cost elements. The difficulty in identifying supply chain benefits can create

internal confusion. Activity-based costing is an alternative to better measure SCM.

the customer and meeting his requirements. This is a flat organizational view recognizing the

SCM process with its flow of information and product. Organizations however are

hierarchical and create functional silos which make internal integration difficult.

Supply chain management can provide competitive advantage to those who practice and

participate in it. Companies must recognize the issues which can impact its effectiveness.

(9) Fundamentals of Transportation:-

(I) The Objective of Transportation- Satisfying customers while minimizing costs &

making a profit contribution.

(II) Legal Forms of Transportation- Transportation service companies are classified legally

as either common, contract, exempt, or private carriers. 

 –   Common carriers- offer transportation services to all shippers at published

rates between designated locations without discrimination. 

 –   Contract carriers- not bound to serve the general public. Contract carriers

serve specific customers under contractual agreements. 

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 –   Exempt carriers- exempt from regulation of services & rates & if they

transport certain exempt products like produce, livestock, coal, or newspapers.

 –   Private carrier- not subject to economic regulation & typically transports

goods for the company owning the carrier.

(III) The Modes of Transportation 

(a) Motor Carriers (trucks) - most flexible mode of transportation & account for over 80

% of U.S. freight. Trucks compete w/rail & air for short-to medium hauls. Weather is

primary disadvantage. 

•  Less-than-truckload (LTL) carriers or truck-load (TL) carriers. LTL carriers

move small shipments & fees are higher. 

•  General freight carriers carry the majority of goods shipped & include common

carriers.

•  Specialized carriers transport liquid petroleum, household goods, building materials,

& other specialized items.

(b) Rail Carriers- compete most favorably when the distance is long & the shipments are

heavy or bulky.

 –   Rail relatively slow & inflexible, rail roads have begun purchasing motor

carriers & can thus offer point-to-point pickup & delivery service known as

 trailer-on-flatcar (TOFC) service.

 –   Rail companies use each other’s rail cars. Keeping track of rail cars & getting

them where they are needed can be problematic.

 –   Railroad infrastructure & aging equipment are also problems for the railroads.

(c) Air Carriers- Very expensive relative to other modes but also very fast. Air carriers

transport about 5 % of the U.S. freight bill.

 –   Airlines cannot carry extremely heavy or bulky cargo.

 –   For light, high value goods that need to travel long distances quickly, most

small cities & towns do not have airports.

 –   Half of the goods transported by air are carried by freight – only airlines, Fedex.

(d) Water Carriers- Inexpensive, slow & inflexible. Include inland waterway, coastal &

intercostals, & deep-sea.

 –   Inland waterway transportation is used for heavy, bulky, low-value materials

(e.g., coal, grain). Competes w/rail & pipeline.

 –   Water carriers are paired w/trucks to enable door-to-door delivery.

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 –   Supertankers are +1,500 ft long & 200 ft wide. 

(e) Pipeline Carriers- Limited in variety they can carry.

Little maintenance once pipeline is running.

Materials hauled in a liquid or gaseous state.

(f)  Intermodal Transportation- Combinations of the various transportation modes, is

becoming an extremely popular method. 

 –   Trailer-on-flatcar (TOFC), container-on-flatcar (COFC), piggy-back

service. The same containers can be placed on board containerships &

airliners. 

 –   ROROs or roll-on-roll-off  containerships truck trailers & containers to be

directly driven on & off the ship, without the use of cranes.

(g) Third-Party Logistics Services- intermediaries facilitate use of the transportation

alternatives.

 –   Freight forwarders- consolidate shipments to fill trucks or rail cars.

 –   Transportation brokers- handle transportation requirements of shippers.

legally authorized to act as agents on shippers behalf.

 –   Shipper’s Associations- non- profit orgs that move member’s cargo.

Consolidate members’ shipments to get volume discounts. 

 –   Intermodal marketing companies  (IMCs) act as intermediaries between

intermodal rail carriers & shippers.

 –    Integrated logistics service providers provide services for a fee.

(IV) Transportation Pricing: 

 –   Cost-of-service pricing- vary based on fixed & variable costs. As volume

increases, the fixed costs portion goes down. 

 –   Value-of-Service Pricing- services priced at market bearing competitive

levels. A profit maximizing pricing approach. 

 –   Terms of Sale- price includes transportation FOB destination free on board to

the shipment’s destination. 

 –   Pricing Negotiation- Since the deregulation, negotiating prices is more

common. 

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 –   Rate Categories- rates can be classified a number of different ways.

Classified as class rates, exception rates, commodity rates, & miscellaneous

rates.

(V) Transportation Regulation & Deregulation:- 

 –   Pro- Government regulation is good in that it tends to assure adequate

transportation service throughout the country while protecting consumers in

terms of monopoly pricing, safety, & liability.

 –   Con- Transportation deregulation is good because it encourages competition

& allows prices to adjust as demand & negotiations dictate.

Today, U.S. transportation industry remains essentially deregulated

(a) Transportation Regulation 

 –   Granger laws of the 1870s broadly regulate the RRs. 

 –   Interstate commerce Act of 1887- Created the Interstate Commerce

Commission (ICC).

 –   Transportation Act of 1920- Made changes to IC act of 1887. 

 –   Motor Carrier Act of 1935 brought motor carriers under ICC control. 

 –   Transportation Act of 1940 establishing ICC control over domestic water

transportation.

 –   Federal Aviation Act of 1958 created to prescribe air traffic rules, make

safety regulations & plan the national airport system.

 –   Department of Transportation Act 1966 to coordinate the executive functions

of all transportation-related matters.

(b) Transportation Deregulation

 –   Railroad Revitalization & Regulatory Reform Act, passed in 1976.

 –   Rail-roads could change rates w/o ICC approval.

 –   Air freight was deregulated in 1977.

 –   Motor carriers were deregulated in 1980 to promote competitive, safe &

efficient motor transportation.

 –   The shipping Act of 1984 allowed ocean carriers to pool or share shipments,

assign ports, publish rates, & enter into contracts with shippers.

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ICC Termination Act of 1995 & the Ocean Shipping Reform Act of 1998 Interstate

Commerce Commission was eliminated, requirement for ocean carriers to file rates with the

Federal Maritime Commission also came to an end.

(10) FUTURE PROSPECTS OF LOGISTICS:-

Facing the worldwide competition, the improvement of logistics system should be advanced

by both private companies and government. Weeld and Roszemeijer (Ho, 1997) discerned

three revolutions in business that have substantial impacts on the purchasing and supply

strategies of the manufacturing sectors. These three revolutions are: (1) the globalisation of 

trade; (2) the coming of the information era; (3) more demanding consumers and

continuously changing consumer preferences. The main characteristics of future logistics

development are:

• Government role: To keep competitiveness of industries, the government has to lead the

way to assist the logistics industries. For instance, the idea of freight village of city logistics

provides the environment to promote logistics efficiency and to reduce operation costs.

However it involves large of investments and some problems relating laws and national

policies. Without the lead and support of government, achieving the plan is Difficult.• Growth of international goods transport: The up-growth of international freight transport

is contributed by several factors. Firstly, the blossoming of E-commerce pushes ahead the

international business activities. Secondly, the change of production strategy needs

international cooperation, e.g. importing the semi-finished products from countries with

Cheaper human resources to those with higher technology to assemble the final goods.

Thirdly, the pressure of globalised market, such as World Trade Organization (WTO), pushes

local industries to promote themselves to reach an international standard and face the

worldwide competition.•  Improvement of services: Providing a good customer service becomes a necessary

requirement of business operation with the intense competition of global market. The quality

of services is the main factor to affect consuming behaviour among the enterprises with high

similarity. The service systems involve several developed techniques now, such as Efficient

Consumer Response (ECR) and Quick Response (QR). In the near future, more new

techniques would be applied in providing better services for customers.

•  Revolution of logistics operation: IT techniques and its products bring efficiency and

fluency to the logistics systems. Radio Frequency ID (RFID) is one of these techniques. The

main difference between the bar-code system and RFID is that RFID does not need the action

of scanning the barcode on goods. RFID could save manual operation time dramatically.

RFID systems could sense the amount of goods input in the tags automatically andimmediately when the costumers push their trolley through the exit (Carroll, 2004).• Shorter product life cycle: With the current trend, the merchandise design is changing day

by day, and therefore, the product life cycle is shorter and shorter, especially in computer

science. To confront the impacts, logistics system must improve its efficiency and reliability

of goods delivery. Otherwise an inappropriate logistics system would hinder the

competitiveness of new products and the business profits.•  Improvement of logistics facilities: The advancement and development of logistics are

based on several techniques and complete theories. High-tech facilities and systems, e.g. ITS,

could bring more possibilities and advantages to logistics. For example, the improvement of 

related facilities, e.g. Forklift Trucks, is necessary for transport efficiency.

In the future, factory automation is the main target for the whole supply-chain procedures.It could help to improve efficiency and also reduce the operation costs.

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• Channel cooperation between companies: In order to save the logistics costs, a key

concept is to maximize the usage of available transport capacity. Integrating the logistics

demands between numerous departments helps achieve this purpose. In practice, a

conglomerate could develop its own logistics service for the branches. For some medium size

companies, they could cooperate transport channels with others.

• Specialized logistics delivery: One of the notable trends of logistics industries is specializeddelivery service. For instance, delivering fresh food from the place of origin needs low-

temperature containers. Compute chips, gases and petroleum need particular conveyances to

carry. These demands are rising since the products became more and more delicate.

• Logistics centres: The development of logistics centres is good for industry promotion and

the development of national economic system. Logistics centres could successfully shorten

the distance between production and marketing vertically and also integrate various industries

horizontally, and thus decrease the costs. Governments can propose special areas for

storehouses and logistics to reduce land acquisition. The future logistics will cooperate e-

commerce, the Internet and the newly door-to-door service to create new business prospects.

•  Freight transport: The alliance between middle-small size delivery companies is an

important trend in the future. The strategy could help to expand service areas and increaseservice quality, and meanwhile raise the loads of single trips to reduce delivery costs.