Effects of Transportation on Logistics
Understanding logistics in a simpler manner is all about a process of transporting and handling materials and goods coming from a point of origin and ending at the point of the customer’s possession, which entails in between these points – the movement of the materials and goods from the suppliers, followed by the movement of the materials and goods from supplier to a company and from the company to the hands of the customers; but within these movements are other components that play a role in logistics.
Logistics is made up of three important components that are related and interlinked with one another and they are: logistics services, information systems and infrastructure. The movement of goods from the point of origin through production until the goods reach the customers refers to logistics services and within this movement, storage, inventory control, transport, as well as the selection of contractors and freight negotiations are included. The flow and processing of logistics information for decision making and management lies on the information systems, and the purpose of which is to provide the essential data for the logistics services to proceed and complete its main function and objective. Infrastructure refers to physical and financial aspects which are human resources, financial resources, packaging materials, warehouses, transport, as well as communication.
Logistics cannot meet its full advantage without a well-planned and well-designed transportation system, because a well-developed transportation system results in efficiency, reduce operation cost and promote service quality. There is much greater investment of logistics’ expenses into transportation in order to succeed in its logistics operation which in turn influences production and sale. For heavy and low-valued goods or products, the transportation cost uses a great part of sales and affects profits, on the other hand, for goods or products that are of small volume, low weight but of high value, the transportation cost takes up a minimal part in the sale’s cost. Due to the complex operation of transportation in logistics, if there is quality management, the transport system is, therefore, well-handled and this can result into goods being transported into the right place at the right time, which, in effect, brings out service quality and efficiency.
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An extension service delivery of good or products from air and maritime transports is land logistics, which makes use of the road freight transport system, railway transport system, and pipeline system. The road freight transport system has these advantages: cheaper investment, accessibility, mobility, and availability are high, but the disadvantages are low capacity for delivery, low safety of goods and slow speed; while the railway transport has the following advantages: great carrying capacity, low energy consumption, not affected by weather conditions, but has the advantages, such as high cost of facilities and maintenance, not flexible in terms of urgent schedules, and time consuming in arrangement of railway carriages. The pipeline system may be an expensive infrastructure, hard to supervise, and need regular maintenance but it has the following benefits: high capacity, not affected by weather conditions, cheap operational fee, and continuous transport.What Do You Know About Businesses