Volume : I, Issue : VII, April - 2012

Cost Effective Transportation

Sarada Prasanna Patra, Dr. Manjusmita Dash

Abstract :

A study of 1999 physical distribution (outbound only) costs revealed that total logistics cost represented 7.34 % of sales and that the outbound transportation costs amounted to 3.24%, warehousing 1.84%, customer service 0.48%, administration 0.38%, and carrying cost 1.52%. of sales. We may operate a private fleet of owned or rented vehicles (private transportation). Second, a carrier may be in charge of transporting materials through direct shipments regulated by a contract (contract transportation). Third, the company can resort to a carrier that uses common resources (vehicles, crews, terminals) to fulfill several client transportation needs (common transportation). A common way to achieve considerable logistics cost savings is to take advantage of economies of scale in transportation by consolidating small shipments into larger ones. Consolidation can be achieved in three ways. First, small shipments that have to be transported over long distances may be consolidated so as to transport large shipments over long distances and small shipments over short distances (facility consolidation). Second, less–than–truckload pick–up and deliveries associated with different locations may be served by the same vehicle on a multi–stop route (multi–stop consolidation). Third, shipment schedules may be adjusted forward or backward so as to make a single large shipment rather than several small ones (temporal consolidation). Logistics involves movement of products. A product produced will achieve its value after it has moved to the point where it will be consumed. Transportation does not only create utility, but creates time utility as well, since it determines how fast and how consistently products can move from one point to another. The transportation costs will also vary considerably with the mode of transportation chose. The particular mode chosen depends on the characteristics of the mode and the companies’ need

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Article: Download PDF   DOI : 10.36106/ijar  

Cite This Article:

Sarada Prasanna Patra, Dr. Manjusmita Dash Cost Effective Transportation Indian Journal of Applied Research, Vol.I, Issue.VII April 2012

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