Do you know? India handles 4.6 billion tonnes of goods each year, amounting to a total annual cost of INR 9.5 lakh crore, as per RMI India report. Maximum freight transportation in India is carried out by roads.
Transportation is the key element of the logistics chain as it links different activities of the entire logistics process and ensures accurate delivery of products to end customers. Transportation is required in the whole logistics process, from manufacturing and delivery to customers to the return order process. Without a well-developed transportation system, there is no chance of the logistics system bringing maximum output.
To achieve maximum benefits from the transportation system, good planning and coordination are required. Also, a large portion of the logistics costs is carried by the transportation. Hence the right use of transportation mode and service become significantly important in logistics.
According to a Statista report, in 2020, around 40% of the total logistics costs in India were caused by transportation, for around 6% of the GDP. Overall logistics cost took around 14 %of the national GDP.
Road shares 64% of the overall freight logistics, railways share 32% of freight transportation for transportation beyond 300 kms.
Thus the performance and management of transportation are extremely important for the success of the logistics system.
As the logistics system keeps advancing with globalization and the growing needs of businesses and industries, so does the transportation system. An effective transportation system helps optimize the systems’ distribution process and helps businesses promote their competitive advantage and efficiency.
Know the significance of transportation of logistics, modes of transportation, and how to choose the best logistics solutions for your business here:
Role of Transportation in Logistics
A well-functioned mode of transportation helps ensure accurate and fast order fulfillment for a business. The transportation system in logistics activities can enhance logistics services, reduce operation costs, and promote quality service. Find out other important roles of transportation in logistics here:
1. Manages Different Processes in Logistics
Be it manufacturing or production, warehouse management or product delivery, everything is dependent on transportation. The manufacturing hub requires a transportation system to move products to warehouses or directly to consumers. Additionally, once an order is placed, a quick transportation service is required to move products from the source origin or warehouse to the end customer.
2. Helps Businesses with Delivery Services
Transportation is an essential service in logistics that links the product suppliers and customers. It is through the means of transportation that the product is moved from the source to the final destination. A reliable transportation service helps in the accurate delivery of the product with minimum damage.
A well-handled transportation system helps in sending goods to the right place and at the right time. This satisfies the demand of customers and brings efficiency.
A good transportation system not only brings quality service to the logistics system but also for the company. When businesses complete on-time delivery, they gain the trust of their customers and eventually create a mark for their business.
3. Improves Efficiency of the Logistics Process
The operations associated with transportation determine the efficiency of the logistics process. Techniques and processes affect the loading of goods, speed of delivery, quality of service, operation costs, and efforts. Transportation professionals in collaboration with other staff in the supply chain and logistics space ensure that the product is delivered to customers on time, thus improving the overall efficiency of the logistics process.
What are the Modes of Transportation in Logistics?
There are four modes of transportation used for the shipment in the logistics space. These are trucks, trains, planes, and ships. All these four modes of transportation are used in logistics depending on the requirement of the business. The mode of transportation is significantly defined by the speed of delivery.
Know what are the modes of transportation in logistics and the advantages and limitations of each mode here:
Road Transportation (Truck Freight)
According to a Economics Times report , road logistics in India is expected to grow at a compounded annual growth rate of 8 percent in the next five years, to reach USD 330 billion by 2025.
Another Statistics report shows that in 2019, around 64% of the overall freight transportation in India was carried out by the road.
Road transportation is mainly carried by trucks. It is one of the cheapest modes of transportation of goods and is useful for services in rural areas where there is less availability of any other means of transportation.
Here are some of the advantages and limitations of road transportation:
Advantages of road transportation
- Good for intercity transportation
- Allows flexible routing
- Minimizes cost for short distances
- Delivery in neighboring countries is possible
- Estimationof exact delivery time is possible
Limitations of road transportation
- Slower than other transportation services
- No control over how products are handled
- Restricted delivery beyond the coastline
- Delay in delivery under natural calamities, stikes etc.
Rail Transportation (Train Freight)
Rail transportation is one of the most common and important means of transportation.
It is the mode that is used to effectively move bulk materials across a great distance.
Find out the significance as well as limitations of rail transportation in logistics here:
Advantages of rail transportation
- Cost-effective mode of transportation for long-distance
- One of the fastest modes of road transportation
- One of the most reliable means of transportation, in terms of safety
- Least affected by unusual weather or disaster
- Fixed routes and schedule helps in the exact prediction of delivery time
Limitations of rail transportation
- Routes and timings cannot be adjusted as per the requirement
- Not suitable for short-distance and small shipment
- Chances of damage in loading and unloading is high
Air Cargo Transportation (Plane Freight)
Air cargo transport is the transfer of products from one point to another within the country or anywhere around the world by means of air.
According to a Statista report, in the fiscal year of 2020, Air India transported around 205 thousand metric tons of freight worldwide.
One of the greatest advantages of Air cargo transport is its fast speed of delivery. However, it also has some limitations. Check below.
Advantages of air cargo transportation
- It is the fastest and quickest means of transport
- It offers direct and shortest route and no barrier comes its way
- Suitable to carry perishable goods
- Less barrier due to natural calamities like floods, heavy rainfalls etc.
- High level of safety and less risk of product damage
Limitations air cargo transportation
- Expensive means of transport
- Capacity is less. Not suitable for the shipment of bulky goods
- Not suitable for the shipment of specific products due to restrictions
Maritime Transportation (Ship Freight)
Maritime mode of transportation is the main mode for global trades. According to OECD, 90% of traded goods are carried by ships and as the demand for global freight increases, the maritime trade volumes are set to triple by 2050.
Maritime transport adds economic value to a good country as it is the source of transportation in logistics for international trades. Hence it is a significant mode of transportation for the country. Like every other mode of transportation, maritime has its own advantages and limitations as discussed below:
Advantages of maritime transportation
- Useful for cross border shipment
- Quite a cheap mode of transportation
- Useful for transportation of heavy and bulky goods
- Secure means of transportation
- Adds economic value to a country through trade
Limitations of maritime transportation
- Maritime transportation is a slower means of transportation. It is useful for transporting goods with enough lead time for shipment
- Weather obstacles can cause damage to cargo and late shipment
- Ships run for weeks and hence there is the possibility of late delivery of goods. Late delivery can dissatisfy consumers
How to Choose the Best Logistics Transportation for your Business?
Choosing the right modes of transportation in logistics can greatly impact your business. Whether it is for regular shipment or shipment on a temporary basis, transportation helps in on-time delivery at the right place.
Here are some important guidelines to choose the right transportation service for the shipment of your products:
- Check company profile: Companies with a good number of experience in transportation services can help on time and safely deliver products. Look at the service providers’ profiles to know how well versed they are in handling the transportation of goods. Confirm their manpower strength and note down the contact number of managers and supervisors.
- Analyze your business requirement: Each business has its own set of business requirements. Look for a mode of transportation in logistics and service that can meet your specific requirement and ensure that they will complete the consignment with utmost care and safety.
- Look for customer support: Look for a service provider that has good communication and customer support. It can greatly impact your transportation in terms of tracking of orders, payments, documentation, etc. Moreover, it is imperative for building a long term relationship.
- Compare Cost: Pricing plays a vital role in choosing a transport service. It is good to compare quotations of different companies and then select the cost-effective services that match with their quality of service.
- Look for Trustworthiness: The transport service you are looking for must be trustworthy. Always cross check their pricing for any hidden charges, check their history, go through reviews, verify documents before you even book the service. All this can help you avoid adverse situations in future
- Tech-enabled service: In the time of quick commerce, you, as a brand owner, would like to have your products shipped as quickly as possible. A tech-innovative logistics company can help you with online booking services to enable you to speed meet the delivery timeline. Not only that, you need real-time updates about the product. Also, you need the live location, route information and updates on product delivery. Hence, always look for a tech-enabled service provider who offers these services.
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