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Logistics And Transportation


Logistics And Transportation

Logistics And Transportation - According to the Board of Supply Chain Management Professionals (CSCMP), logistics management can be defined as, "The part of supply chain management that plans, implements, and controls forward, efficient and effective backflow and storage of goods, services, and related information, between the point of origin and the point of consumption in order to meet customer needs". 

The history of logistics is rooted in military applications. Since World War II it has developed into an important function of business as it has become clear that logistics and transportation add a place and time value to products and increase form and value ownership added by manufacturing and marketing.

The concept of logistics as a business discipline began to appear in the literature related to business in the 1960s when it was called physical distribution. At that time the focus was on the outbound side of the logistics system. 

With the emerging importance of Supply Chain Management, logistics k and transportation has become even more important as supply chain managers recognize that the coordination and integration of the logistics systems of the entire organization with the supply chain is a requirement for success.
According to Coyle, Bardi, and Langley, there are four subdivisions of logistics:

Business logistics — this is the same as the definition of  Council of Supply Chain Management Professional (CSCMP) and the approach we adopt in our discussion. 

Military logistics - everything needed to support the operational capabilities of military forces and their equipment to ensure readiness, reliability, and efficiency. Event logistics-management of all schedulers, involved (activities, facilities, and personnel) in organizing, and using the resources necessary to ensure the occurrence of an event and an efficient withdrawal afterward. 

Service logistics — acquisition, scheduling, and management of facilities, personnel, and materials are necessary to support and maintain service operations.

In the context of this essay, we will discuss the concept of the logistics business. The logistics system business can be classified into four categories:

1. Enterprise Systems

Balanced with a balanced system, inbound and outbound flows are sufficiently balanced.

2. Heavy Inbound

These companies have very heavy inbound flow, but very simple outbound flow. Companies with the heavy inbound flow usually do not warehouse their finished goods, for example, aircraft manufacturers.

3. Outbound Weight

These companies have a complex outflow and a very simple inbound flow. Their inbound flow is usually the raw material over a relatively short distance. Usually, outbound shipping is a variety of packaged finished goods requiring storage and transportation to the end customer.

4. Otherwise The System

Reverse logistics supply chain systems have reverse flow on the outbound side of their system. Durable products that are returned for credit, trade-in, repair, rescue, or disposal or company used containers are returned or can be reused.

Coyle, Bardi, and Langley list a number of activities that lie in the logistics area:

Order fulfillment — the activities involved with completing customer orders. Obviously, transportation and logistics will be an integral part of completing an order because they directly impact shipping. 

Traffic and transportation - the physical movement of goods. Warehousing and storage of a number of warehousing decisions directly impact logistics and transportation. 

For example, how many warehouses are needed, where should they be located, how big should they be, how much inventory should be held in each? Plant and warehouse site locations can change the time and place relationship between the warehouse and the customer. Often transportation costs are a major factor in factory and warehouse locations. 

Material handling - the placement of goods and movement of goods in factory warehouses, or other facilities. This includes the movement of incoming goods and the movement of goods from storage to order-select areas to dock areas for delivery. 

Transport - Industrial packaging directly impacts the type of packaging required. Fast methods of transport, such as air, generally require little in the way of packaging while slow modes, such as water or rail, require substantial packaging expenditures to ensure safe delivery. 

Purchase - The amount purchased directly affects the cost of transportation. Also, transportation is directly related to the distance or location of goods purchased by the company. Purchasing and logistics are increasingly integrated with many large companies. 

Demand forecasting - Accurate and reliable forecasting are essential for effective inventory control purposes, especially in leveraging lean manufacturing companies and JIT. This inventory control is directly related to transportation and warehousing. 

If the higher transport rates are slower than the required inventory, ergo, further warehouse capacity is required. Production planning must operate in close coordination with logistics to ensure adequate market coverage. Production planning and logistics are increasingly integrated with large companies. 

And support services - the effectiveness of spare parts and service support depends on the speed of transportation, warehouse location, and forecasting of support function needs. Parts Obviously, parts and service support have a direct impact on customer service levels. 

Return goods handling of the logistics supply chain is an increasingly important but often neglected dimension in the logistics field. Salvage and waste disposal are an integral part of reverse supply chains. There is increasing interest, in the logistics literature, in the impact of locating evaluation and disposal facilities for returned goods. 

Logistics - Level customer service plays a very important role in ensuring that customers get the right product in the right place at the right time. Transportation, warehousing, forecasting, inventory control, and production planning all have a direct impact on customer satisfaction.

The two most obvious aspects of logistics are warehousing and transportation.


Warehousing is defined as the storage of goods: raw materials, semi-finished goods, or finished goods. It covers a wide spectrum of facilities and locations that provide warehousing. Since this is a point in the logistics system where goods are held for varying amounts of time, flow is interrupted or stopped, thus creating additional costs for the product.

In a macroeconomic sense, warehousing creates time utility for raw materials, industrial goods, and finished products. It also increases the utility of the goods by extending their time available for prospective customers.


Transportation involves the physical movement or flow of goods. The transportation system is a physical link that connects customers, suppliers of raw materials, plants, warehouses, and channel members. This is a fixed point in the logistics supply chain.

The basic modes of transportation are water, rail, motorboat, air, and pipeline. Air becomes the slowest mode with rail, motor carrier, and air following in order of delivery speed. Generally, the order is reversed when looking at costs.

The selection of the right carrier has several steps. First, the company chooses the mode of transportation. The sender must compare the desired service with the level or cost of the service. 

Service usually means the time in transit or the time that passes from the time the shipper makes the goods available for delivery until the carrier delivers to the consignee. Pickup and delivery, terminal handling, and movement between origin and destination account for the time involved in transporting goods.

Companies must balance the "Need for speed" with the costs inherent in this mode of transportation. This includes fees charged for services, minimum weight requirements, loading and unloading facilities, packaging, possible damage in transit, and any special services that may be desired or required. 

If next day delivery is essential, the shipper will take advantage of the air carrier but will pay a premium price for the fast service. If time is not a critical element the sender may choose to use a rail or motor carrier, or perhaps even use a water carrier if time is not important. 

The water-based mode of transportation is the most expensive and is used for product types of commodities such as wheat, ore, and coal. Some companies even use more than one mode of transportation, called intermodal transportation, to move their goods. 

Once the mode is selected, shippers must decide on the legal classification or type of carrier they wish to utilize: public, regulated, contractual, exempt, or private. General operators serve the general public at fair prices and without discrimination. 

They cannot refuse to carry certain commodities or refuse to serve certain points within the scope of the carrier operation. Public transport is responsible for all lost, damaged, or delayed goods unless caused by an act of God, an act of a public enemy, an act of public authority, an act of a shipper, or some defect in the item itself. 

The regulated carrier is obliged to provide safe and adequate services and facilities at a reasonable request and is responsible for damage to the extent set by the operator. The carrier can be regulated by a water motor operator or operator and is subject to minimal federal control.

A contract operator does not serve the general public, but rather serves one or a limited number of contracted customers. They have no legal service obligations. They often provide specialized services and usually have lower rates than public or regulated transport.

Exempt carrier exempt from provisions regarding rates and services. Free status derives from the type of commodity dragged or the nature of the carrier operation. Freed motorized carriers are usually local and usually transport goods such as agricultural goods, newspapers, livestock, and fish. 

Water transport operators freed up bulk commodities such as coal, ore, wheat, and liquid. Rail transport operators free shipping piggy-back and air freight cargo operators freed.

A self-contained transport company is called a private carrier. Private carriers are not "for-hire" and are not subject to the same federal regulations as other types of transportation. However, the carrier's primary business must be something other than transportation.

Once the mode and type of carrier are determined the final decision can be made based on other factors. Accessibility is one of these factors. Some companies have geographic boundaries for their network routing. 

Others may not have physical access to the necessary facilities or have the ability to provide the equipment and facilities that the movement of certain commodities may require. Reliability, the consistency of the transit time the carrier provides, is also a key factor. Finally, convenience and communication are other important considerations when choosing a carrier.

Actions that a transportation company will use to assess performance include orders delivered on time, orders shipped complete, order preparation time, product availability, and transit times. From a customer perspective performance can be measured from orders received on time, orders received complete, orders received damage-free, orders filled accurately, and orders billed accurately.


The expansion of the global market puts the concept of global logistics at the center of attention. Logistics specialists must now manage all such logistics activities in a worldwide arena spanning many countries, languages, cultures, governments, and regulations. As the market expands comes the need for global channel intermediaries. The current global logistics manager will be familiar with each of the following roles:

Foreign freight forwarder-handlers from a myriad of foreign freight services: rate quotes, charter translation service vessels, ordering space ships, handling documentation and cargo insurance, tracking and expediting, arranging, and provide ground transportation. 

Export management company-a supplier of expertise to those who wish to sell products overseas but do not have the necessary resources. Export trading company-locaters of overseas buyers. They also handle the export documentation, transportation, and meeting foreign government requirements. 

Customs brokerage house-supervisor of the movement of goods through customs. They also ensure that accompanying documents are complete and accurate. 

Shipbrokers - sales representatives for ship owners and purchasing representatives for shippers. Ship agent-local representatives of ship operators who handle ship arrivals, berths, clearance, loading, and unloading. 

Export packers - suppliers of export packaging services. Port authority-owner and operator of the port. They provide wharves, docks, and other terminal facilities at port locations.

Hopefully this article will increase your knowledge better.


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