Transportation

Transportation is the movement of people and goods from one place to another.

Importance of Transportation

1. Assists trading.
2. Creates utility of place.
3. Improves standard of living.
4. Provides necessities of live and minimizes shortages.
5. International trade is not possible without transportation.
6. Efficient transportation system is important for distribution of goods in right form.

Modes of Transportation

Road Transport

Advantages

1. Cheap for shorter distances.
2. Quick for shorter distances.
3. Door to Door delivery.
4. Minimum documents involved.
5. It is flexible. Smaller and larger quantities can be transported to most of regions.
6. Round the clock availability.

Disadvantages

1. Expensive for long distances and heavy loads.
2. Slow for long distances.
3. Effected by topography.
4. Effected by climate.
5. Effected by weather conditions.
6. Effected by traffic congestions.
7. Creates pollution.
8. Creates traffic congestions.

Rail Transport

Advantages

1. Cheap for long distances.
2. Quick for long distances.
3. Good to carry bulky cargo.
4. Not effected by traffic.
5. Does not create pollution in cities.
6. Special transporters may be provided for different specialized items.
7. Especially suitable for low value and high volume cargo.

Disadvantages

1. Involves documentation.
2. Need for loading and unloading cargo many times.
3. Trains can not go any where.
4. Move only according to schedule.
5. High costs for short distances and small quantities.
6. Located out of cities so depends on road transportation.
7. High capital cost of maintenance of tracks and trains.

Air Transportation

Advantages

1. Quick.
2. Safe handling of cargo.
3. Not effected by topography.
4. Not much documentation involved.
5. Less packing requirement.
6. Less insurance cost.
7. Especially suitable for high value and low volume cargo.
8. Used for urgently required goods.

Disadvantages

1. Expensive.
2. Effected by weather conditions.
3. Has constraints as far as carrying of cargo is concerned.
4. Limited space.

Sea Transportation

Main Types of Sea Transport

1. Ships: “Mother Vessel 40,000 MT- 60,000MT” and “Connecting Vessel 20,000 MT” deep port.
2. Barge: Small Ship – Shallow port
3. Ferries: Shallow seas and small distance
4. Boats: River inland transportation

Main Types of Ships

1. Passenger liner: Normally used to carrying passengers, mail and some express cargo.
2. Cargo liner: Mainly used to carry variety of cargo and sometimes few passengers.
3. Tramp: It is cargo ship which does not sail to any special place. It is normally chartered.
4. Bulk carrier: It is especially built to carry a particular type of cargo for example oil.
5. OBO ship: It is can ore-bulk-oil carrier, carries loose material.
6. Roll-on, roll-off: Highly specialized ships that allows loaded vehicles like trucks, trailers, passenger cars etc.

Advantages

1. It is cheap per unit of cargo for longer distances.
2. Highly suitable for bulky cargo.
3. Refrigerating and other facilities are available.
4. Containerization is possible.
5. Not effected by topography.

Disadvantages

1. Very slow.
2. Very rigid.
3. It is effected by weather conditions.
4. A lot of documentation.
5. Lot of handling of cargo is involved.
6. Extra cost for insurance and packing.

Containerization

• Sending cargo in special metallic box of standard sizes as containers.
• Size (i): 20’x8’x8’ known as 20 ft container, suitable for low volume, high weight
• Size (ii): 40’x8’x8’ known as 40 ft container, suitable for low weight, high volume
• Containers are generally owned by shipping lines.
• Refrigerated containers are also available.
• Containers are available to the traders on less than container load (LCL) and full container load (FCL) basis.
  Less than container: Some of the container;
  Full container load: Whole cargo.

Advantages:

1. Quick movement of cargo.
2. Faster turn-around of ships at ports.
3. Protection of cargo from being damaged.
4. Saving on packing cost.
5. Lesser chances of cargo being lost.

Disadvantages:

1. Expensive to own, Capital cost increases.
2. Dependence on skilled labor.

Chartering

• A vessel/truck/plane is available to the trader on chartered basis by paying a certain amount.
• Trader can then cover a certain distance or voyage according to his own schedule.
• The agreement signed with the owner is called ‘charted party’.
• Chartering is available on voyage and time basis.

Shipping Conference

• It is a meeting held on annual basis attended by representatives of shipping companies in which important matters are discussed.
• One of the important matters discussed is the decision of minimum freight charges for a certain voyage. This freight is called “conference rate”.

Advantages

1. Price competition amongst the shipping line is limited.
2. Profit is certain.
3. Availability of ships in the long run.

Disadvantages

1. Rates are made artificially high, expensive rates.
2. Some shipping lines not attending the conference can operate below conference rate, which is disadvantage to other shipping lines.

Pipe Line

• Suitable only for gases and liquids.
• Operational costs are minimum.
• Heavy capital costs.
• Require favorable gradient.
• Security hazards.
• Leakage problems.

Hiring and Owning Transportation

Hiring Transportation

Advantages

1. Capital cost is saved.
2. Running and maintenance cost is saved.
3. Saving on problems relating to crew.
4. Save on taxes.

Owning Transportation

Advantages

1. Cheaper operational cost.
2. Creates good image.
3. Can be used for business advertisements.
4. Can make amendments to the transport according to requirements.
5. Round the clock availability.
6. Reduces dependency.

Factors to be considered before deciding for Hiring or Owning

1. Capital cost.
2. Frequency of use.
3. Nature and scope of business.
4. Business certainty.
5. Availability of rental transportation.
6. Freight charges of rental transportation.
7. Crew costs.

Factors affecting choice of mode of Transportation

1. Freight charges.
2. Availability.
3. Coverage.
4. Topography.
5. Distance.
6. Urgency.
7. Value of cargo.
8. Nature of cargo.

Recent Trends in Transportation

1. Chartered transportation.
2. Air Freight.
3. Express Routes.
   • Main routes (highways) which are made for HTV (heavy transport vehicles).
   • There are minimum obstacles.
   • Minimum crossing.
   • Speedy transportation.

Port Authority: Responsibilities

1. To provide navigation facilities and to control air and sea traffic.
2. To maintain air traffic control tower/light house.
3. To maintain run ways/berths/docks.
4. Fueling of planes/ships.
5. Provision of supplies to the planes/ships before departure.
6. Signing agreement with other port authorities on variety of issues.
7. Maintenance of planes/ships before departure.
8. Providing facilities to passengers and traders.
9. Security arrangement.
10. Permits to motor boats/light air planes.
11. Providing hanger facilities/wet or dry docks.

Facilities at Ports for Passengers and Traders

1. Passenger lounges.
2. Fire extinguisher.
3. First aid.
4. Internet facility
5. Café.
6. Washroom.
7. Shopping area.
8. Banks.
9. Transportation.
10. Offices of air line companies.
11. Hotel reservation offices.
12. Warehouses.

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