Logistics is inextricably linked to transportation. A business cannot run effectively without the ability to move items along the supply chain. Additionally, it enables businesses to transcend geographical boundaries between where things are manufactured and where they are consumed. Transportation may be described in logistics as the process of planning, scheduling, and regulating operations associated with the mode of transport, the vendor, and the movement of products into and out of an organization.
On average, traffic managers commit to and oversee more than 60% of a company’s overall logistics expenditure. A traffic manager must determine whether to own and run the shipper’s own transportation fleet or to contract with for-hire carriers. In any case, a manager should be informed of the different modes of transportation available for the movement of commodities. Transport of commodities is possible by land, air, water, and pipeline.
Nonetheless, it is obvious that choosing a method of transportation is a difficult option. Numerous variables must be considered, including accessibility, travel time, and dependability. However, a shipper might reject some options based on criteria such as the size of the cargo, the delivery deadline, and the product’s durability.
Among the three elements, the size of the product is one of the most critical. Managers must be aware of the items’ weight, density, and form, as well as their packaging. For example, although lighter items such as electronic components can be carried by land or air, larger products such as iron ore are best transported by railways or rivers. Another consideration is shaped, as both land and air transit impose size restrictions. The capacity of a transportation method must match the entire weight and dimensions of the package.
Another factor to consider for the management is the product’s durability. Freight that is fragile, such as glass or electronic gadgets, requires specific packing to ensure a smooth trip. Temperature-sensitive items, such as food or pharmaceuticals, require specialized packaging and transportation modes that can resist extremes of cold and heat.
Other factors to consider while picking an appropriate method of transportation include the product’s worth and the transit speed—the more money spent on transportation by a business, the less competitive the pricing. Delivery speed is a deciding element in mode selection since it has an effect on the cost of cargo. The delivery date is deemed more critical than the amount of the package.
Managers must evaluate the value density vs. the package density when deciding on a mode of transportation with varying product costs and delivery times. This also entails multiplying the value of the units delivered per cubic meter by the amount of space available per cubic meter. Indeed, products with a greater value density are often sent via a faster mode of transport, whereas items with a lower value density are typically shipped via a slower mode of transport and subsequently kept in inventory. In addition, managers must bear in mind that the more units handled per cubic meter, the more automated material handling is required.
On the other hand, copy machines and digital cameras are items with a low and a high-value density, respectively. Both items are recommended to be delivered in containers in the United States. The emphasis on those goods is on maximizing the return on investment. As a result, there is a good likelihood that businesses may choose air travel.