The Impact of Transportation in Logistics Management
Jinyu Peng
Due to the trend of collaboration in recent decades, the importance of logistics management
has been growing in various areas. There are numerous researches focused on this field
from different perspectives. A key element in logistics management is the transportation
system, which influences the performance of logistics system hugely. The purpose of this
essay is to discuss the impact of transportation in logistics management and clarify the
positional relationship between transportation and logistics management. Firstly, two
theoretical discussions will be deliberated. Then three empirical studies are to be explained
through analyzing various application cases in logistics management. At last, the essay will
conclude the impact of transportation in logistics management in the final section.
Logistics management is the process of managing the procurement, movement and storage
of materials to achieve maximal profitability (Christopher, 1998) .Transportation, as the
major component of logistics systems, occupies an important ratio in logistics activities. It
is important to study the impact of transportation in logistics by analyzing different
perspectives. According to Tseng and Yue (2005), transportation is the base of logistics
management which occupies one-third of the amount in the logistics costs. Jagadeesh and
Kumar (2014) confirm that an average of fifty percent of total logistics cost is due to
transportation. Furthermore, Kumar and Shirisha (2014) claim that transportation is an
essential and a major sub-function of logistics that creates time and place utility in goods.
It can be observed that transportation is a key player in logistics management and affects
the results of logistics activities.
Transportation system is the most important economic activity among the logistics systems
(Tseng and Yue, 2005). It contributes to improving the performance of logistics
management and increasing its competitiveness. There are three typical examples to justify
the impact of transportation in the logistics management. Daniel and Lima (2011) indicate
that Brazil and the United States, the world’s two largest soybean exporters, possess unique
infrastructure schemes for transportation. It is shown that in certain cases Brazilian soybean
transportation costs can represent 230% more than those of the United States. In addition
to this, from the perspective of the development of China’s logistics industry in the recent
years, the transportation issues such as congestion and shipments delay are frequent at
Chinese seaports due to capacity shortage, which are insufficient to satisfy the huge
demand generated by the booming logistics industry(Zhang and Figliozzi, 2010). Another
specific example is the cost on trade under China-Pakistan Economic Corridor (CPEC).By
optimizing the emerging and short trade route, China can save about $71billion dollars
from the new CPEC on its imports and exports in terms of the shipping cost (Alam et al.,
2019). It can be observed that with well-developed transportation systems, logistics
management can achieve better efficiency, reduce operation cost and further promote
service quality.
The main objective of this essay is to discuss and analyze the impact of transportation in
the logistics management. Transportation and logistics systems have interdependent
relationships that transportation is the most important economic activity and the base of
efficiency in logistics management. It plays an important role in the movement of raw
materials for production and finished goods for consumption. A well-handled
transportation system has a significant impact on the logistics management and brings
benefits not only cost reduction but also company competitiveness.
References
[1]Alam ,Khalid Mehmood.Li,Xuemei and Baig,Saranjam.,2019.Impact of Transport Cost
and Travel Time under China-Pakistan Economic Corridor(CPEC).Journal of Advanced
Transportation,Vol.2019.
[2]Christopher,M.(1998).Logistics and Supply Chain Management: Strategies for reducing
cost and improving services,(2nd ED.).NewYork:Prentice Hall.
[3]Daniel & Lima, Renato da Silva., 2011.Impact of Transportation Policies on
Competitiveness of Brazilian and U.S. Soybeans: From Field to Port. Journal of the
Transportation Research Board, Vol .2238, Issue 1.
[4] Jagadeesh, Parkhi&Kumar, R., 2014. A Study on Transport Cost Optimization in Retail
Distribution. Journal of Supply Chain Management Systems, Vol.3, Issue4.
[5] Kumar, G.Santosh&Shirisha, P., 2014.Transportation the Key Player in Logistics
Management. Journal of Business Management & Social Sciences Research (JBM&SSR),
Vol. 3, No.1.
[6] Tseng, Yung-yu&Yue, Wen Long., 2005. The Role of Transportation in Logistics
Chain. Proceedings of the Eastern Asia Society for Transportation Studies, Vol. 5, pp. 1657
– 1672.
[7] Zhang, Zeyan& Figliozzi, Miguel Andres., 2010. A Survey of China’s Logistics
Industry and the Impacts of Transport Delays on Importers and Exporters. Transport
Reviews, 30(2).
Well-structured content with a rich content. Well done!