Page 158 - DMGT546_INTERNATIONAL_TRADE_PROCEDURE_AND_DOCUMENTATION

Unit 7: Logistics and Characteristics of Modes of Transportation

Single-mode Service Choices and Issues Notes

Air
Rapidly growing segment of transportation industry
Lightweight, small items (Products: Perishable and time sensitive goods: Flowers, produce,
electronics, mail, emergency shipments, documents, etc.)
Quick, reliable, expensive
Often combined with trucking operations
Rail

Low cost, high-volume (Products: Heavy industry, minerals, chemicals, agricultural
products, autos, etc.)

Improving flexibility
Inter-modal service
Truck
Most used mode

Flexible, small loads (Products: Medium and light manufacturing, food, clothing, all retail
goods)
Trucks can go door-to-door as opposed to aeroplanes and trains.
Water

One of oldest means of transport
Low-cost, high-volume, slow
Bulky, heavy and/or large items (Products: Nonperishable bulk cargo – Liquids, minerals,
grain, petroleum, lumber, etc.)
Standardized shipping containers improve service
Combined with trucking & rail for complete systems

International trade
Pipeline
Primarily for oil & refined oil products
Slurry lines carry coal or kaolin

High capital investment
Low operating costs
Can cross difficult terrain
Highly reliable; Low product losses

Transport Cost Characteristics

Transportation costs will be fixed costs as well as variable costs. Both these costs must be
reviewed frequently and efforts must be made to bring these down.

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