TRANSPORTATION – IMPORTANCE, MODES AND CHOICE OF TRANSPORT MODE
MEANING AND IMPORTANCE
Meaning of transportation
Transportation is a means of moving goods and people from one location to the other. In marketing, it involves the movement of goods from the place of production to the place of consumption. Goods can be moved from the factories to the wholesalers and to the retailers where the consumers come to buy them. It is also possible to move goods from the retailers shops to the consumers, or from the wholesalers to the consumers and in some cases from the producers direct to the consumers.
The requirement for transportation services varies greatly from industry to industry. For some basic commodities, transportation requirements are done in minibuses and pick up vans. In automobile logistics, the most common method of transport is the railcar. Several hundred railcars are required to transport a single week’s production from an assembly plant. In iron ore transport, ships and barges moving on the Great Lakes and inland waterways may satisfy requirements most economically. To the meat packer, transportation is by means of refrigerated railcars or truck trailers. For the crude oil producer, transportation centers on pipelines. For the retailer, Courier Service may constitute the primary method of customer delivery. In contrast, a producer of electronic components may use air freight for product delivery.
Many transportation options are available for product or raw-material movement in a logistical system. In addition to hiring transportation, an enterprise may decide to operate private transportation or enter into a contract with a transport specialist.
Trucking
This is the movement of goods from one geographical location to another but covering a long distance. Example, trucks from a factory warehouse located at Ikeja to the selling point at Onitsha, Aba, or Makurdi: it is a long distance haulage.
Local Delivery
This involves freighting of goods within the same geographical locality from one point to another involving a relatively short distance, eg from a warehouse at Ibeju Lekki to markets in Ajah etc, in Lagos state.
Importance of Transportation
1. Transportation links the different fixed facilities and markets and thus serves to neutralize the spatial separation of the facilities.
2. As a marketing function, therefore, it increases the economic value of the products by creating time and place utilities and promoting possession utility.
3. For the producer, the transportation aids in moving raw materials and other components from the suppliers to the plants and warehouses and from plants and warehouses to other plants. It also involves the movement of finished goods from the plants to the warehouses or distribution centers and to customers.
4. The wholesaler transports goods from the warehouse or distribution centers to retailers.
5. The retailers transport merchandise from his warehouse to his store and to final consumers.
6. Consumers also benefit from transportation because some retailers deliver goods directly to them.
MODES OF TRANSPORTATION
The various modes of transportation in this country are: Rail, Water, Road, Pipeline, and Air transport.
Rail transport
Specialize in transporting large heavy shipments over long distances. For shipments of a car load or more, they are comparatively inexpensive and they provide a high degree of speed and reliability. Rail service is a good choice for shipment of lumber, coal, and agricultural products.
Water
Transport by ships and barges are the second most popular mode. It is fairly cheap, but very slow and unreliable due to its dependence on the weather, and ships may go only where there is water. Its delivery area is limited.
Road
They are the transportation of choice where flexibility is at a premium. It involves transportation trough cars, lorries, trucks, etc. Road transportation is also fast and dependable, but because they are limited in size, they are not as economical as rail or water.
Pipeline
Here, there are no stops or alternate routes and only fluid products like gases, liquids, or semi-liquids can be transported. Once in place however, pipelines provide cheap and reliable transportation.
Air
This is used where speed is a priority. It is the most expensive of all, and fairly undependable because of constantly changing air schedules. Use of air transport may remove the need for extra warehouses because of its ability to span long distances quickly.
FACTORS AFFECTING CHOICE OF TRANSPORT MODE
A good number of factors affect the choice of mode of transport. Some of them are as follows:
Nature of the goods
Items which are very heavy, bulky and awkwardly shaped always needs to be transported using water mode of transport, especially over long distance.
Customer wishes
Before you decide how to transport your product, ask your customer which route they’d prefer -and find out if they have any special requirements. It’s crucial that you comply with their wishes.
Simplicity
To keep track of your shipment and avoid logistical nightmares, it’s important to keep your transport plan as simple as possible. For example, if it seems too complicated to transport your product by sea because of the number of stoppages and transshipments involved, you may want to make things simpler by choosing airfreight instead.
Speed
Some types of product, such as perishable foods, need to reach the customer quickly; in such circumstances, a quick plane journey may be preferable to a long sea voyage. Think about the type of goods you are transporting before you decide how to send them.
Price
As well as looking after your products, you need to look after your profits. If you can’t afford to transport your goods by air, then don’t bother doing it; try shipping them by road or ship instead.
Supporting functions
Besides, there are those activities, which facilitate performance of the above functions. These are the supporting functions, which include packaging and communication. Communication forms an invisible link between the major components of the system.
DOCUMENTS USED IN TRANSPORTATION
Several documents are involved in transportation management. Two of the most important are the bill of lading and the freight bill.
Bill Of Lading
The bill of lading is the basic document in the purchase of transport services. It serves as a receipt for goods shipped through the description of commodities and quantities detailed on the document. For this reason, accurate description and count are essential. In case of loss, damage, or delay, the bill of lading provides evidence for damage claims.
The bill of lading specifies the terms and conditions of carrier liability and includes all possible causes of loss or damage except those defined as acts of God. It is important that these terms and conditions be clearly understood, so that appropriate actions may be taken in the event of inferior performance.
Freight Bill
The freight bill represents a carrier’s method of charging for transportation services performed. The freight bill is derived from information contained on the bill of lading. It may be either prepaid or collect shipment. A prepaid bill means that transport cost must be paid for prior to the transportation performance, whereas a collect shipment shifts payment responsibility to the buyer.
Air waybill
Air waybills (AWB) are a form of Bill of Lading and are used for both domestic and international flights. An AWB (also referred to as air consignment note or airway bill of lading) refers to a documentary receipt issued by a carrier (i.e. airline) in favour of a shipper for goods received and is evidence of the contract of carriage to carry the goods to a specified airport under specified conditions, but it is not a document of title to the goods. Hence, the AWB is non-negotiable. It is usually the shipper – the exporter – (or their agent) that completes the AWB. It serves as:
Proof of receipt of the goods for shipment
Evidence of the contract of carriage.
An invoice for the freight, reflecting the shipper, the consignee and the goods being shipped, as well as the full freight amount.
A certificate of insurance (if carriers insurance is requested by the shipper).
A guide to airline staff for the handling, dispatch and delivery of the consignment.
A means of clearing the goods through customs.
Road Consignment Note
A road consignment note (also referred to as a road transport document, a road waybill or a road manifest) is a form of inland BOL. As road haulage is driven by a large number of private road haulers, you may come across many different types of road consignment notes, although there is a tendency to follow the typical BOL used in the case of ocean shipping (i.e. there is still a consignee, a shipper, a description of the goods, etc.). The road consignment note is also:
Proof of receipt of the goods for transportation by road.
Evidence of the contract of carriage.
An invoice for the freight, reflecting the shipper, the consignee and the goods being shipped, as well as the full freight amount.
A guide to the road hauler for the handling, dispatch and delivery of the consignment.
A means of clearing the goods through customs.
To clear the goods through customs, the road consignment note will need to be accompanied by a commercial invoice, a packing list and any other documentation relevant for clearing purposes.
SUMMARY
Transportation is a means of moving goods and people from one location to the other. In marketing, it involves the movement of goods from the place of production to the place of consumption.
Transportation is a link between producers and consumers. It is important to producers or manufacturers, retailers, and consumers.
The various modes of transportation in this country are: Rail, Water, Road, Pipeline, and Air transport.
Factors affecting the choice of transportation mode are: nature of goods, customer wishes, speed, simplicity, price, and supporting functions.
Several documents are involved in transportation management. Two of the most important are the bill of lading and the freight bill.
