Transportation

An efficient and inexpensive transportation system contributes to;

• Greater competition in the market place.
• Greater economies of scale in production
• Reduced price of goods

Selection of Modes

The selection of different modes of transportation is done on the basis of;

• Price
• Average transit time
• Transit time variability
• Loss and damage

Modes of Transportation

Rail

Rail is a long hauler and slow mover of raw materials and of low valued manufactured products and prefers to move shipment sizes of at least a full carload. Rail services exist in two legal forms;

1. Common carrier
2. Privately owned

Advantages

1. Provides cheapest and fastest mode of transport for commodities in bulk.
2. In respect of high rated commodities like cotton piece goods, soaps and detergents, medicines and general merchandise railways provides door to door services like containers and freight forwarders. The railways also change competitive freight rates. In this case there are sizeable savings to the consignor or consignee. These rates are cheaper for longer distances.
3. Railroad documents are honoured by banks and are negotiable instruments. They provide flexibility in a commercial transaction.
4. Consignment is secure in transit with the railways.
5. Looking from an overall national angle, Indian railway is more energy efficient and has a far superior safety record as compared to road transport.

Truck

Trucking is a transportation service for semi finished and finished products. Truck and rail services show some distinct differences even though they compete in many of the same product shipment.

1. In addition to the common and private legal classification of carriers trucking offers services as contract carriers as well.
2. Tucks can be judged less capable of handling all types of freight than rail mainly due to highway safety restriction that limit the dimensions and weight of shipment
3. Trucking offers reasonably fast and dependable delivery of less than carload shipments.

Air

The newest but the least utilized mode of transport. The appeal of air transportation is in its unmatched origin destination speeds, especially over long distances. In addition air transport generally offers excellent frequency and reliability of services particularly to major metropolitan areas.

Advantages

• Speed of transportation
• Emergency transport

Types

• Regular domestic truck line carriers
• All cargo carriers
• Local service airlines
• Supplemental carriers
• Air taxies
• Commuter airlines
• International carriers

Water

Water transportation service is limited in scope of several reasons. Domestic water service is confined to the inland waterway system which requires shippers to be located on the water ways or to use transportation more in combination with water. Water service on the average is slower than the rail. Water services are provided in all legal form and most commodities shipped by water move free of economic regulations. Loss and damage cost resulting from transporting by water are considered low relative to other odes because damage is not much of a concerned with low valued bulk product and losses due to delay are not serious.

Pipeline

It offers a very limited range of services and capabilities. The most economically feasible products to move by pipeline are crude oil and refined petroleum products. Products movements by pipeline are very slow only about 3 – 4 miles per hour. Concerning transit time, pipeline service is the most dependable of all modes because there are few interruptions to cause transit time variability. Product loss and damage for pipeline is low because;

• Liquids and gases are not subject to damage to the same degree as manufactured products.
• The no. of dangers that can be fall a pipeline operation is limited.