Transportation Logistics: Costs, Functions, and Cargo Classification

The Critical Role of Transportation in Global Logistics and Supply Chains

The Transport System and International Physical Distribution (DFI)

The transport system is a network of roads, railways, ports, airports, and bus stations. In some countries, these systems are effectively managed and coordinated through suitable logistics operations.

Transportation is a major logistics function and is embedded in what is known as International Physical Distribution (DFI).

Key Characteristics of Transportation in Logistics

Transportation plays a key role in integrated logistics aimed at customer service. Its main functions are linked to the dimensions of time and place utility. Transportation always aims to deliver products on time where there is demand.

Cost Implications

Transportation unfortunately represents the bulk of logistics costs. From a cost standpoint, it represents about 60% of total logistics costs.

Strategy and Competitiveness

Transportation plays a role in various logistics network strategies. Logistics seeks solutions that enable flexibility and speed of customer response at the lowest possible cost, thereby creating greater competitiveness for the company.

Key factors affecting the transport function include inventory management (stock) and customer service.

Determining Cargo Type for Transport Planning

The first step in physical distribution planning is to establish the type of goods to be transported. The type of merchandise determines the means of transportation used, as well as the required packing and package marking.

General Cargo

This refers to individual commodities that can be standardized for handling, storage, and transport (e.g., sacks, cartons, pallets, drums).

• Unit Load: It consists of items (such as boxes or packages) that are disjointed but grouped into larger units, such as pallets or cargo containers.
• Loose Cargo (Non-Unitized): It is composed of individual loose goods shipped and handled as separate units (e.g., bags, bales, crates, drums).

Bulk Cargo

This corresponds to cargo consisting of large quantities of a uniform product that does not require packaging for transport (e.g., rice, salt, oil, gases, liquids, grains).

• Bulk Solid Cargo: This corresponds to a set of particles or grains that are not individually listed or packaged, identified by their nature, weight, and/or volume.
• Bulk Liquid or Gas Cargo: This corresponds to liquid or gaseous fluids or liquefied gases, typically transported in mass transit or special pipelines, and not stored in conventional packaging.