1. Transport support international commercial transactions
Made by :
Aripov Karimjon

2. Content Meaning & definition Imortance of transportation
Transportation functionality
Principles & methods of transportation
Types of transportation
Condition affecting transportation
Transportation costs
Pricing structure
Conclusion

3. Meaning and Definition
Transport or transportation is the movement of people, animals and goods from one location to another. Modes of transport include air, rail, road, water, cable, pipeline and space. The field can be divided into infrastructure, vehicles and operations.
Transport infrastructure consists of the fixed installations necessary for transport, including roads, railways, airways, waterways, canals and pipelines.

4. Importance of transportation:
Transport is a key component of growth and globalization.
Transport is a key necessity for specialization—allowing production and consumption of products to occur at different locations. Transport has throughout history been a spur to expansion; better transport allows more trade and a greater spread of people. Economic growth has always been dependent on increasing the capacity and rationality of transport. But the infrastructure and operation of transport has a great impact on the land and is the largest drainer of energy, making transport sustainability a major issue.

5. Importance of transportation:
Place Utility.
Industrial Development.
Employment Opportunities.
High Standard of Living.
Distribution of Perishable Goods.
Emergency Transportation.

6. Transportation Functionality
Functions of Transportation
Product Movement
Product Storage

7. - Product is locked up during transit, hence inaccessible.
Product Movement
Temporal:
- Product is locked up during transit, hence inaccessible.
- Positive amount of time is spent in transporting material.
- Time is a resource expended in transportation .
- During the time product is locked up costs are incurred in proportion of time.
Financial:
- Administration costs, Salaries, Maintenance costs are expended.
Environmental:
- Fuel costs are high[Creates air pollution, congestion,
Noise pollution.

8. Product Storage:
* It is a temporary storage in stationary vehicle. Product storage is expensive in transport vehicle. In some situations Product is done such as:
* When the cost of unloading and reloading the product in the Warehouse is more expensive.
When storage space is limited.
* At other times, temporary storage is used due to diversion. This occurs when an original delivery destination is changed while the inventory is in transit.

9. Principles of Transportation
Economy of Scale
Economy of Distance

10. Types of Transportation
Road Transport.
Rail Transport.
Water Transport.
Air Transport.
Pipeline Transport.
Ropeway Transport.

11. Road Transport: * Advantages; * Disadvantages;
1. Door to Door Service.
2. Economical over short distances.
3. Flexibility.
4.Limited Capital Expenditure.
* Disadvantages;
1. Irregular and Unreliable.
2. Unsuitable for Long Distances
3. No Uniformity in Rates.
4. Limited Speed.
5. Affected by Weather.

12. Rail Transport: * Advantages; 2. Suitable for Long Distances.
1. High Speed.
2. Suitable for Long Distances.
3. Bulky Goods.
4. Protection.
5. Large Carrying Capacity.
* Disadvantages;
1. Huge Capital Expenditure.
2. High Overheads.
3. No Door to Door Service.
4. No Competition.
5. Inflexible Mode.

13. Air Transport: * Advantages; * Disadvantages; 2. Quick service.
1. Flexible.
2. Quick service.
3. Natural Highways.
4. Protection.
5. High Speed.
* Disadvantages;
1. High Cost of Construction and Maintenance.
2. Costliest.
3. Limited Carrying Capacity.
4. International Restrictions.
5. Unsuitable for Bulky Goods.

14. Water Transport: * Advantages; * Disadvantages;
1. Cheapest Mode of Transport.
2. Large Carrying Capacity.
3. Safety.
4. Protection to Goods.
5. Flexibility.
* Disadvantages;
1. Slow.
2. Huge Capital Expenditure.
3. High Cost of Maintenance.
4. No Door to Door Service.
5. Special Packing.

15. Pipeline Transport crude, petroleum products are transported.
Generally liquids like oils,
crude, petroleum products are
transported.
More than 6350 KM of Pipeline
exits in India.
Currently 27% of petroleum
products are moved by
pipelines in India.

16. Ropeway Transport: Ropeway Transport is used for
transporting materials in hilly areas.
In India 16% of total area is hilly,
Currently in India nearly 178 Km rope
ways are used for transportation.

17. Conditions Affecting Transportation
Factor
Examples
Geography
Distance, physiography, accessibility
Shipping between India and banhaldesh vs. shipping between India and US
Type of product
Packaging, weight, perishable
Shipping coal Shipping flowers or wine
Economies of scale
Shipment size
A 747 compared to 737 (passengers) ULCC compared to a VLCC (freight)
Trade imbalance
Empty travel
Trade between China and the United States
Infrastructure
Capacity, limitations, operational conditions
The Interstate
Mode
A bus compared to a car
Competition and regulation
Tariffs, restrictions, safety, ownership
The European Union, NAFTA

18. Transportation Costs Product related density stowability
ease or difficulty of handling
liability
Market related
intramode/intermode competition
location of markets
nature and extent of regulation
balance/imbalance of freight traffic
seasonality of product movements
domestic vs. international 33

19. Transportation Cost Structures
Variable: costs vary with services or volume:
line-haul costs of fuel, labor and maintenance
handling
pickup and delivery
Fixed: constant regardless of activity
Facilities, equipment and administration
Joint: “hand-in-hand” costs -- unavoidable
Example: the backhaul move
Common: shared costs (“overhead”)
need for Activity-based costing 38

20. Cost Structure For Each Module:
Mode
Fixed Costs
Variable Costs
Rail
High- Equipments, Terminals , Tracks ,etc
Low
Road
Low-Highway provided by government
Medium-Fuel , Maintenance, etc
Water
Medium-Ships and Equipment
Low-As capacity is huge
Pipeline
Highest-Right of the way , construction, Equipment for control station and Pumping capacity
Lowest-Insignificant labour costs
Air
Low-Aircraft and cargo handling systems
High- Fuel, labour, Maintenance

21. Factors Driving Costs Distance Volume Density Stowability Handling
Liability

22. Factors Driving Costs
Stowability- refers to how goods being shipped fit into the dimensions of the container that is used.
Handling- Load & Unload.
Liability- product characteristics that can result in damage & claims.

23. Pricing Structures Cost-of-service: “cost plus” method
Value-of-service: “market based” method
Combination: a middle of the road approach using cost (minimum) and value (maximum)
Net Rate Pricing: All-inclusive prices specific to customers’ needs (not discount-based) 39

24. Fixed and Operating Transport Costs
Mode
Fixed/Capital Costs
Operating Costs
Rail or Highway
Land, Construction, Rolling Stock
Maintenance, Labor, Fuel
Pipeline
Land, Construction
Maintenance, Energy
Air
Land, Field & Terminal Construction, Aircraft
Maintenance, Fuel, Labor
Maritime
Land for Port Terminals,
Cargo Handling Equipment, Ships

25. Cost Variations in Transport
Elasticity of Demand- goods of high unit value are better able to bear costs of transport than low value goods- “charge what traffic will bear”
Competition between Transport Modes
Example: Rail wishes to compete with trucks on short haul must keep rates down
Other examples: Wine ship Angelo Petri

26. Cost Variations in Transport
Differences in Cost of Services:
Loading characteristics- light, bulky goods demand higher charges than heavy, compact articles
Size of Shipment- large, single consignments permit economies in administration and terminal costs
Susceptibility to Loss and Damage and Risk Liability- a. fragile and/or perishable goods- b. refrigerated, insulation and special packaging

27. Role of transportation in supply chain management

28. Cost ratio of logistics items

30. Thank you…