Delivery Systems
Overview
• Why transport is important?
• Types of delivery system
• Factors to be considered when
choosing a delivery system
• Modern developments in delivery
systems
• Calculating delivery costs
Why is transport
important?
•
•
•
•
A good transport system is important to
business:
To deliver raw materials to the
manufacturer
To deliver finished goods to retailers
To transport workers to their jobs
To transport goods abroad
Types of delivery
systems
•
•
•
•
•
•
Road
Rail
Sea
Air
Pipeline
Canal
Road
Advantages
• Fast over short
distances
• Door-to-door deliveries
(entire country is
accessible)
• Minimum handling
• Flexible, convenient and
cheap – operates 24
hours a day
Disadvantages
• Congestion/poor roads –
delays
• Bad weather – delays
• Not suitable for bulky
goods
• Slow over long
distances
• Cost of drivers, tax and
insurance is high
Rail
Advantages
• Fast over long distances
• Suitable for bulky goods
• Reliable
• Cheap for bulky goods
• Can carry containers and
chemicals
• Not affected by weather
and traffic congestion
• Railways service the main
ports – important for firms
that export
Disadvantages
• Not flexible – fixed
timetable
• Lot of handling – other
methods of transport to
and from the station are
needed
• Fixed routes
• Expensive over short
distances
• Not every city/town is
served by a railway station
Lack of integrated
rail network
throughout the
country
Sea
Advantages
• Suitable for bulky goods
• Large cargos can be
carried
• Cheaper than air
• Suitable for containers
• Good facilities at ports
• Modern ships – large
loads
Disadvantages
• Slow over long
distances
• Weather conditions –
delays
• Not flexible – fixed
timetable
• Must link with other
forms of transport
• High insurance costs
Types of ship
• Cargo ships (LO-LO)
• Ferries (RO-RO)
• Tramp ships
Container ships
Air
Advantages:
• Fast
• Suitable for perishable
goods and goods needed
urgently
• Good safety record
• Less packing – reduced
cost
• Modern aircraft – large
loads
• Less likelihood of
damage/theft
• Good network of regional
airports
Disadvantages
• Expensive
• Bad weather – delays
• Must link with other forms
of transport
• Not flexible – fixed
timetable
• Not suitable for bulky
goods
Pipeline
Advantages:
• Safe
• Cheap to
maintain
Disadvantages:
• Expensive to
install
• Suitable only for
liquids or gases
Canal
• Man-made waterway
• Not commonly used in Ireland,
except as a tourist attraction
• Used extensively in Europe
• Famous canals: Amsterdam,
Venice, Suez, Panama
• Ship canals may
be used to link
major cities with
sea ports, e.g.
Manchester linked
with Liverpool
Suez Canal
Joins the Red Sea and Mediterranean Sea in Egypt
Panama Canal
• Connects the Caribbean Sea to the Pacific Ocean
• 50 miles long
Factors affecting choice of
delivery system
• Cost
– Delivery adds to the
selling price of goods
• Reliability
– The system should be
punctual. A delay in
delivery could cause a
delay in production for
“just-in-time”
• Convenience
– Delivery should be
available when
required
• Speed/Type of goods
– Very important for
perishable goods (e.g.
fresh fish) and urgently
needed supplies (e.g.
medicine)
• Distance
– The distance between
the buyer and seller
can mean a number of
transport methods
must be used
Modern Developments
in Transport
•
•
•
•
•
•
Containers
Refrigeration
Tachograph
Euro Tunnel
Toll roads/toll bridges
Quality Bus Corridors (QBC)
Containers
• Large metal boxes
of standard size
• Minimum handling
of goods required
once sealed in the
container
• Small firms may
share a container to
reduce costs
Refrigeration
Refrigerated
containers are
used for
transporting
perishable
goods, e.g. meat,
fish, etc.
Tachograph
An instrument installed
in the cab of a
truck/lorry that
measures the hours
(and speed) driven as
well as the breaks
taken by the driver
Euro-Tunnel
• The Euro-Tunnel
linking Folkestowe
in England with
Calais in France
was opened in 1993
• This provides a
regular, fast rail link
between the UK and
mainland Europe
Quality Bus Corridors
• Special lanes that
buses can use to
provide a quicker
and more effective
service
• Public transport
becomes more
attractive because it
will be quicker and
more punctual
Toll roads/Toll bridges
• Built by private
firms who charge
a fee for their use
RO-RO & LO-LO
Calculation of
Delivery Cost
Brady Ltd., a fruit and vegetable wholesaler which operates
325 days a year supplies the following information:
• Distance travelled each
• Employer’s PRSI is 12.5% of
day is 740km
gross pay
• The diesel van can
• Annual motor tax is €1,300
travel 34km per litre
• Annual motor insurance is
• The cost per litre of
€2,275
diesel is €1.05
• Annual motor repairs are
• Mark Hennessy, the
€1,300
driver is paid €200 per
• Toll charges are €20 per day
day
Calculate the total cost of transport for one day
Solution
€
FIXED COSTS
€
Annual motor tax
1,300
Annnual motor insurance
2,275
Annual motor repairs
1,300
Total fixed costs
4,875
Daily fixed costs
4,875/325
15
FUEL COSTS
Distance travelled per day
740
Divide by kilometres per litre
37
Daily fuel used
20
Cost per litre
20 x 1.05
21
OTHER VARIABLE COSTS
Driver's wages
200
Employer's PRSI (USC)
25
Toll charges
20
TOTAL COST FOR ONE DAY
245
281
Review and Recap
• Why transport is important?
• What are the different common types of
delivery system?
• What factors need to be considered
when choosing a delivery system?
• List and explain four modern
developments in delivery systems
• Explain how a business calculates
delivery costs