Logistics Management:
Transport Management 🚚
Introduction 🚚
Transport is one of the main components of logistics, alongside other activities such as
purchasing, procurement, warehousing, inventory management, and order management.
Transport is responsible for the physical movement of materials between points in the supply
chain.
💡 Most people imagine trucks driving down a motorway when they think of logistics, but it has
a far wider meaning.
Transport Costs 🚚
The cost of transportation is an important consideration for logistics and can affect the
patterns of movement. The cost is determined by factors such as:
- Specifications of the products being moved 💡
- Distance 💡
- Volume and weight of the transport unit 💡
- Value of the goods 💡
- Complexity of the journey 💡
💡 A common view is that more expensive fuel, vehicles, and drivers are making transport more
expensive.
Modes of Transport 🚚🚚🚚✈️🚚
There are five main modes of transport:
1. Rail 💡
2. Road 💡
3. Water 💡
4. Air ✈️
5. Pipeline 💡
Each mode has different characteristics, and the best choice depends on factors such as the
type of goods, locations, distance, and value.
Rail Transport 🚚
Rail transport is one of the oldest modes and is more environmentally friendly compared to
other modes. It offers regular service and is the second safest mode after pipelines.
Advantages of Rail Transport ✅
- Advanced infrastructure already in place 💡
- High capacity and low unit cost 💡
- Economies of scale 💡
Disadvantages of Rail Transport ❌
- Inflexible due to fixed timetables 💡
- Limited to specified routes and terminals 💡
- Slow compared to other modes 💡
💡 Despite the disadvantages, rail transport should be supported as it is environmentally
friendly and cost-effective, especially for distances over 500 kilometers.
Road Transport 🚚
Road transport is the most widely used mode and is used at least somewhere in almost all
supply chains. Its main benefit is flexibility, being able to visit almost any location.
Advantages of Road Transport ✅
- Extensive road networks already exist 💡
- Vehicles do not have to adhere to rigid timetables 💡
- Door-to-door service 💡
- Competition among carriers leads to flexible pricing 💡
Disadvantages of Road Transport ❌
- Vulnerable to congestion and traffic delays 💡💡💡
- Limited by weight and size restrictions 💡💡
- More expensive for smaller loads 💡
💡 Road transport is generally used for shorter distances and delivering finished goods rather
than bulky raw materials.
Water Transport 🚚
Water transport includes river, coastal, and ocean transport. Over 90% of freight is moved by
sea, making it a crucial mode for international trade.
Advantages of Water Transport ✅
- Cheapest mode of transport 💡
- Ability to carry large volumes and heavy loads 💡
- Suitable for long distances 💡
Disadvantages of Water Transport ❌
- Slow speed 💡
- Limited to locations with appropriate ports 💡💡
- Requires transfer to other modes for door-to-door delivery 💡
💡 Water transport is the most common mode for international transport, especially between
continents.
Air Transport ✈️
Air transport is the fastest mode but also the most expensive. It is used for products where
speed of delivery is more important than cost.
Advantages of Air Transport ✅
- Fastest mode of transport 💡
- Suitable for high-value, time-sensitive goods 💡💡
Disadvantages of Air Transport ❌
- Most expensive mode 💡
- Limited capacity compared to other modes 💡
- Requires transfer to other modes for door-to-door delivery 💡
💡 Air transport is commonly used for documents, parcels, and expensive materials that require
fast delivery.
Pipeline Transport 🚚
Pipeline transport is mainly used for oil, gas, water, and sewage. It is the safest mode but also
the slowest and most inflexible.
Advantages of Pipeline Transport ✅
- Safest mode of transport 💡
- Ability to move large quantities over long distances 💡
- Cheapest mode once the initial investment is made 💡
Disadvantages of Pipeline Transport ❌
- Slow speed 💡
- Inflexible, only transporting between fixed points 💡
- Huge initial investment required 💡
💡 Despite the disadvantages, pipelines are the cheapest way of moving liquids, particularly oil
and gas, over long distances.
Choosing the Transport Mode 🚚
The choice of transport mode depends on various factors, including:
- Nature of the materials being moved 💡
- Volume and distance 💡💡
- Value of the materials 💡
- Importance and urgency of the delivery 💡
- Transit times and reliability 💡✅
- Flexibility and negotiability of rates 💡💡
- Reputation and stability of the carriers 💡💡
- Security, loss, and damage concerns 💡💡
- Schedules and frequency of delivery 💡💡
- Special facilities available 💡
💡 As a rule of thumb, the cheapest modes of transport are the least flexible.
Intermodal Transport 🚚🚚🚚
Intermodal transport refers to journeys that involve two or more different modes of transport.
The aim is to combine the benefits of several separate modes while avoiding the disadvantages
of each.
Benefits of Containerization 🚚
- Simplified transport and flow of goods 💡💡💡
- Faster and easier handling 💡💡
- Door-to-door service 💡
- Reduced loss due to damage, misplacement, and pilferage 💡
- Reduced packing costs 💡💡
- Lower insurance costs 💡💡
- Separation of incompatible goods 💡💡
- Use of less congested routes 💡
- Improved transport efficiency and encourages trade 💡💡
💡 Over 70% of freight movements now use containers due to the benefits of containerization.
Ownership of Transport 🚚🚚
Organizations can choose between using their own transport fleet (own account transport) or
outsourcing to third-party carriers.
Factors to Consider 🚚
- Operating costs 💡
- Capital costs 💡
- Customer service requirements 💡
- Control over transport operations 💡
- Flexibility to adapt to changing circumstances 💡
- Management skills and expertise 💡
- Recruitment and training of drivers 💡✈️💡✈️
