The Transportation System

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The Transportation System Transportation accounts for between one-third and two-thirds of total logistics costs; for most firms, it is the most important single element of logistics costs. Firms and their products’ markets are often separated geographically. Transportation increases the time and place utility of products by delivering them at the right time and to the right place where they are needed. By doing so, the customers’ level of satisfaction increases, which is a key factor for successful marketing. A comprehensive discussion of transportation is beyond the scope of this text, so we focus here on essential issues of transportation systems, which are more related to the physical flows of materials. Transport Modes and Their…show more content…
Hence, variable costs are influenced by both distance and shipment size. Water Water carriage—as the oldest mode of transportation—accounts for 5% of total freight ton-miles (around 3.3% of actual tonnage) in the United States. Sampson et al. describe the nature and characteristics of water carriage as follows: Water carriage by nature is particularly suited for movements of heavy, bulky, low-value-per-unit commodities that can be loaded and unloaded efficiently by mechanical means in situations where speed is not of primary importance, where the commodities shipped are not particularly susceptible to shipping damage or theft, and where accompanying land movements are unnecessary. As already mentioned, the majority of commodities transported by water are semi processed and raw materials; thus, water transportation competes primarily with rail and pipeline. Water carriage can be broken into the following distinct categories: 1. Inland waterways (such as rivers and canals) 2. Lakes 3. Coastal and intercostals oceans 4. International deep sea Water transportation service is limited in scope, mainly for two reasons: its limited range of operation and speed. Water service is confined to waterway systems; thus, unless the origin and the destination of movement are located on waterways, it needs to be supplemented by another transportation mode (rail or motor carrier). In addition, the average speed of water carriage is
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