PHYSICAL DISTRIBUTION

CHAPTER 25

Nature & ScopePhysical Distribution

Process of transporting, storing, & handling goods to make them available to consumers

Transportation of goods The marketing function of moving

goods from a seller to a buyer.

Types of Transportation Truck

Convenient, most flexible form of transportation

Interstate Commerce Commission (ICC) – regulates transportation of goods between states

Staggers Rail & Motor Carrier Act- Relaxed Rules & Regs. 4 Types

Common- any business in area for a fee Contract- On a selective basis according to an agreement Private- Transport for an Individual Business Exempt- free from direct regulations of rates & operating

procedures. Usually agricultural products or local

Types of Transportation Rail

Used for carrying large quantities of heavy and bulky items.

Ton-Mile- movement of one ton of freight one mile

Piggyback & Fishtail, Specialized Services, Package cars, Diversion-in –transit, Processing –in-transit

Ships and Boats Can handle large quantities and large products.

Internal Waterways- connecting waterways International Waterways- Connect continents & countries

Types of TransportationAir

Used for high-value, low-weight items. Also used for perishable items.

Pipelines Most frequently used to transport oil,

water, and natural gas. Normally owned by the company using them

Storing Goods Storage

Marketing function of holding goods until they are sold

Why? Production is faster then consumption Timing- agricultural products

Stabilize prices Discounts for buying in bulk Faster delivery

? ? ? ? UTILITY TIME & PLACE UTILITY

Where to store goods Private warehouse

Owned by a business for its own use Public warehouse

Available to any business that will pay for its use Distribution center

Warehouse designed to speed delivery of goods, minimize storage costs

Bonded warehouse Store products that require payment of federal tax

Cannot be removed until tax is paid Can be private or public

Partnering for SuccessCase Study p. 332

Why did they decide to contract distribution?

Did it save money?

What services are being preformed?

What about long time vendors?

THE END