TRANSPORTATION

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 and space”

Importance of transportation:1) Place Utility.2) Industrial Development.3) Employment Opportunities.4) High Standard of Living.5) Distribution of Perishable

Goods.6)Emergency Transportation

TRANSPORTATION FUNCTIONALITY

Functions of Transportatio

n

Product Movement

Product Storage

Product Movement Temporal:

- 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 Transportation . - During the time product is locked up costs are

incurred in proportion of time. Financial:

- Administration costs, Salaries, Maintenance costs are expended.

Environmental: - Fuel costs are high[Creates air pollution, congestion, Noise pollution.

Product Storage:

It is a temporary storage in stationary 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.

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

Principles of

Transportation

Economy of

Scale

Economy of

Distance

Types of Transportation

1.Road Transport.2. Rail Transport.3. Water Transport.4. Air Transport.5. Pipeline Transport.6. Ropeway Transport.

Road Transport: * Advantages;

1. Door to Door Service.2. Economical over short

distances.3. Flexibility.4.Limited Capital Expenditure.

* Disadvantages;

1. Irregular and Unreliable.2. Unsuitable for Long Distances

3. No Uniformity in Rates.4. Limited Speed.5. Affected by Weather.

Rail Transport:

* Advantages;

1. High Speed.2. Suitable for Long

Distances.3. Bulky Goods.4. Protection.5. Large Carrying Capacity.

* Disadvantages;

1. Huge Capital Expenditure.2. High Overheads.3. No Door to Door Service.4. No Competition.5. Inflexible Mode.

Air Transport:

* Advantages;

1. Flexible.2. Quick service.3. Natural Highways.4. Protection.5. High Speed.

* Disadvantages;

1. High Cost of Construction and Maintenance.2. Costliest.3. Limited Carrying Capacity.4. International Restrictions.5. Unsuitable for Bulky Goods.

Water Transport:

* Advantages;

1. Cheapest Mode of Transport.

2. Large Carrying Capacity.3. Safety.4. Protection to Goods.5. Flexibility.

* Disadvantages;

1. Slow.2. Huge Capital Expenditure.3. High Cost of Maintenance.4. No Door to Door Service.5. Special Packing.

Pipeline Transport:

Generally liquids like oils, crude, petroleum products are transported.

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.4. Continuous.

* Disadvantages of Pipeline;

1. State of Commodity to be transported is limited.

2. Leakages.3. High fix Costs.

Ropeway Transport:

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 Distance.

2. Lower Capital Costs.

3. Less environmental damage.* Disadvantages of Ropeway;

1. Limited Scope.

COST STRUCTURE FOR EACH MODULE:

Mode Fixed Costs Variable Costs

Rail High- Equipments, Terminals , Tracks ,etc

Low

Road Low-Highway provided by government

Medium-Fuel , Maintenance, etc

Water Medium-Ships and Equipment

Low-As capacity is huge

Pipeline Highest-Right of the way , construction, Equipment for control station and Pumping capacity

Lowest-Insignificant labour costs

Air Low-Aircraft and cargo handling systems

High- Fuel, labour, Maintenance

COST RATIO OF LOGISTICS ELEMENTS

Invent-ory

Man-age-ment

Trans-porta-tion

Pack-aging

Order-ing

Ware-housing

Cost Ratio

17.5 11 29.5 11.9 5.5 17

2.5

7.5

12.5

17.5

22.5

27.5

32.5

Factors affecting Transportation Costs:

Product Related Factors

Market Related Factors

Density Whether the Product is transported Domestically or Internationally, Seasonality of Product Movement

Stow ability Location of Markets, which determines the distance goods must be transported

Ease or Difficulty of Handling Nature & extent of government regulation

Liability Balance or imbalance of Freight Traffic in to and out of a Market

CONCLUSION:

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.

THANKY

O

U