TRANSPORTATION
MEANING AND DEFINITION
“The process of moving an item from point A
to point B.”
“Safe, efficient, reliable, and sustainable
movement of persons and goods over time and
space”
Importance of transportation:
1) Place Utility.
2) Industrial Development.
3) Employment Opportunities.
4) High Standard of Living.
5) Distribution of Perishable Goods.
6)Emergency Transportation
TRANSPORTATION FUNCTIONALITY
Product Movement
Functions of
Transportation
Product Storage
Product Movement

Temporal:
- Product is locked up during transit, hence
inaccessible
- Positive amount of time is spent in transporting
material.
- Time is a resource[Temporal Resource] expended in
Transportation .
- During the time product is locked up costs are
incurred in
proportion of time.

Financial:
- Administration costs, Salaries, Maintenance costs
are expended.

Environmental:
- Fuel costs are high[Creates air pollution, congestion,
Noise pollution.
Product Storage:
It is a temporary storage in stationary vehicle. Product storage is
expensive in transport vehicle. In some situations Product is done
such as:
When the cost of unloading and reloading the product in the
Warehouse is more expensive.
When storage space is limited.
At other times, temporary storage is used due to diversion. This
occurs when an original delivery destination is changed while the
inventory is in transit.
PRINCIPLES OF TRANSPORTATION
Economy of
Scale
Principles of
Transportation
Economy of
Distance
Types of Transportation
1.Road Transport.
2. Rail Transport.
3. Water Transport.
4. Air Transport.
5. Pipeline Transport.
6. Ropeway Transport.
Road Transport:
* Advantages;
1. Door to Door Service.
2. Economical over short distances.
3. Flexibility.
4.Limited Capital Expenditure.
* Disadvantages;
1. Irregular and Unreliable.
2. Unsuitable for Long Distances
3. No Uniformity in Rates.
4. Limited Speed.
5. Affected by Weather.
Rail Transport:
* Advantages;
1. High Speed.
2. Suitable for Long Distances.
3. Bulky Goods.
4. Protection.
5. Large Carrying Capacity.
* Disadvantages;
1. Huge Capital Expenditure.
2. High Overheads.
3. No Door to Door Service.
4. No Competition.
5. Inflexible Mode.
Air Transport:
* Advantages;
1. Flexible.
2. Quick service.
3. Natural Highways.
4. Protection.
5. High Speed.
* Disadvantages;
1. High Cost of Construction and Maintenance.
2. Costliest.
3. Limited Carrying Capacity.
4. International Restrictions.
5. Unsuitable for Bulky Goods.
Water Transport:
* Advantages;
1. Cheapest Mode of Transport.
2. Large Carrying Capacity.
3. Safety.
4. Protection to Goods.
5. Flexibility.
* Disadvantages;
1. Slow.
2. Huge Capital Expenditure.
3. High Cost of Maintenance.
4. No Door to Door Service.
5. Special Packing.
Pipeline Transport:
 Generally liquids like oils,
crude, petroleum products are
transported.
 More than 6350 KM of Pipeline
exits in India.
 Currently 27% of petroleum
products are moved by
pipelines in India.
* Advantages of Pipeline;
1. Suitable for All Weather.
2. Low energy Consumption.
3. Space Utilization.
4. Continuous.
* Disadvantages of Pipeline;
1. State of Commodity to be transported is limited.
2. Leakages.
3. High fix Costs.
Ropeway Transport:
 Ropeway Transport is used for
transporting materials in hilly areas.
 In India 16% of total area is hilly,
Currently in India nearly 178 Km rope
ways are used for transportation.
* Advantages of Ropeway;
1. Transports Bulk Material over Short
Distance.
2. Lower Capital Costs.
3. Less environmental damage.
* Disadvantages of Ropeway;
1. Limited Scope.
COST STRUCTURE FOR EACH MODULE:
Mode
Fixed Costs
Variable Costs
Rail
High- Equipments, Terminals ,
Tracks ,etc
Low
Road
Low-Highway provided by
government
Medium-Fuel , Maintenance, etc
Water
Medium-Ships and Equipment
Low-As capacity is huge
Pipeline
Highest-Right of the way ,
construction, Equipment for
control station and Pumping
capacity
Lowest-Insignificant labour costs
Air
Low-Aircraft and cargo handling High- Fuel, labour, Maintenance
systems
COST RATIO OF LOGISTICS ELEMENTS
35
30
25
20
15
10
5
0
Inventory
Cost Ratio
17.5
Manage Transpor Packagin
Warehou
Ordering
ment
tation
g
sing
11
29.5
11.9
5.5
17
Factors affecting Transportation Costs:
Product Related Factors
Market Related Factors
Density
Whether the Product is transported
Domestically or Internationally,
Seasonality of Product Movement
Stow ability
Location of Markets, which
determines the distance goods must
be transported
Ease or Difficulty of Handling
Nature & extent of government
regulation
Liability
Balance or imbalance of Freight
Traffic in to and out of a Market
CONCLUSION:


Transportation and logistics systems have interdependent
relationships that logistics management needs
transportation to perform its activities and meanwhile, a
successful logistics system could help to improve traffic
environment and transportation development.
Since transportation contributes the highest cost among the
related elements in logistics systems, the improvement of
transport efficiency could change the overall performance of
a logistics system.