LOGISTICS (REVIEWER)
PART TWO; CHAPTER 8: TRANSPORTATION
Transportation is the most expensive expenditure in logistics. It also provides four
value-added services such as product sorting, sequencing, modification, and just in
time or guaranteed delivery. The seven primary drivers for transportation costs are
distance, volume, density, stowability, handling, liability, and market factors.
Transport Functionality
Product Movement
Transportation provides two major logistical services: product movement and product
storage.
Inventory captive in the transport system is called in-transit inventory. Advancement
in information technology has helped a lot.
Weaknesses: It causes congestion, air pollution, and noise pollution.
Product Storage
Storage can also be referred to as demurrage (for rail cars) and detention (for trucks).
Diversion occurs when the original shipment destination changes.
Participants
Six parties influence transportation decisions: (1) shipper (consignor), (2) destination
party (consignee), (3) carriers and agents, (4) government, (5) Internet, (6) public.
Shipper & Consignee: issues include pickup and delivery time, loss and damage,
invoicing, and timely exchange of information.
Carrier & Agents: focus on minimizing labor, fuel, and vehicle operating costs.
Government: restricts markets they could service and approves prices they could
charge.
Internet: (1) medium of exchange to match carrier freight capacity with available
shipments, (2) purchase of fuel, equipment, parts, and supplies.
Public: accessibility, expensiveness, effectiveness, environmental protection,
security, and safety.
KZ 1
PART TWO; CHAPTER 8: TRANSPORTATION
Transportation is the most expensive expenditure in logistics. It also provides four
value-added services such as product sorting, sequencing, modification, and just in
time or guaranteed delivery. The seven primary drivers for transportation costs are
distance, volume, density, stowability, handling, liability, and market factors.
Transport Functionality
Product Movement
Transportation provides two major logistical services: product movement and product
storage.
Inventory captive in the transport system is called in-transit inventory. Advancement
in information technology has helped a lot.
Weaknesses: It causes congestion, air pollution, and noise pollution.
Product Storage
Storage can also be referred to as demurrage (for rail cars) and detention (for trucks).
Diversion occurs when the original shipment destination changes.
Participants
Six parties influence transportation decisions: (1) shipper (consignor), (2) destination
party (consignee), (3) carriers and agents, (4) government, (5) Internet, (6) public.
Shipper & Consignee: issues include pickup and delivery time, loss and damage,
invoicing, and timely exchange of information.
Carrier & Agents: focus on minimizing labor, fuel, and vehicle operating costs.
Government: restricts markets they could service and approves prices they could
charge.
Internet: (1) medium of exchange to match carrier freight capacity with available
shipments, (2) purchase of fuel, equipment, parts, and supplies.
Public: accessibility, expensiveness, effectiveness, environmental protection,
security, and safety.
KZ 1
