What Is the Role of Transport Within the Supply Chain?

What is the role of Transport within the Supply Chain

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Norbert Matashu

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Introduction

Transportation is very important part of the supply chain management in the global marketing because it acts as the physical link between customers and suppliers as the products move from one location to another within the supply chain system. Transportation is viewed as the glue that holds the supply chain model function. The supply chain role is to deliver the right products, at the right time, in the right quantity and quality, at the right cost, and to the right destination. According to John J.Coyle (2008). Transportation is a major part of the supply chain management because it allows business within the supply chain the ability to move goods from one location to another locations where they are sourced to locations where they are demanded. There are different ways of transportation for instance you have Air transportation, Rail transportation and Road transportation. The supply chain network is a chain that consists of suppliers, distributors, manufactures, wholesalers and retailers they all depend on transportation to get the products to the end users. The following diagram bellow illustrates what the key elements are within the supply chain it shows how organizations work together, through the relationship represented by the links going through the supply chain. John J.Coyle (2008)

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John J.Coyle (2008). Supply Chain Management:A logistics Perspective. United States of America: Cengage Learning. 19.

The Functions of Transport in the Supply Chain

The functions of transport in the supply chain are vital because they allow companies the ability to move goods from the main supplier to the end users. Transportation is a major contributor in the business economy as it physically connects business to supply chain partners for instance the main suppliers and customers. Transportation is a vital part of the economic activities for business as it involves moving goods from different locations where they are sourced to locations where they are most demanded. Transportation provides the essential service of linking a company to its suppliers and customers. According to Thomas J. Goldsby (2014) Transport utility ensures that customers have access to the products when they demand it. The other functions of transport are to ensure that the company that is delivering customer items is responsible for delivering the items to them undamaged and on time. The supply chain is a large network of companies that work together to provide products or service for end users and consumers for instance companies that deliver products to customers such as the like of UPS, FedEx and DHL. Thomas J. Goldsby  (2014) the supply chain management is also used to help reduce inventory and warehousing costs while speeding up delivery to the products to the end customer.  Transport gives business the ability to move products. They’re virus types of transportation methods that are used to reduce the inventory and warehouse costs some companies use just in time deliver as part of the service to help them cut costs down. Adam Robinson (2015) According to Theodore P. Stank (2000) Transportation management is a critical part of the overall logistics and supply chain performance because it, accounts for 57 percent of US firms’ logistics costs in the US. For instance manufacturers and retailers are now using state of the art supply chain technology to help with reducing inventory and warehousing costs while speeding up delivery to the end customer which is what very customer wants getting their products in the short time frame.

Types of Transports Commonly used

The supply chain is made up of different combination of transportation such as Air, Package carriers, Truck Freight, Rail, Water, Pipeline and Intermodal. According to Ampuja,Jack (2002)  The Major airlines in the United States can carry both passengers and cargo include American and Delta Airlines the main problem with Airlines is that they have a high fixed cost in infrastructure and equipment because of the costs it takes to maintain Airline costs. Most of the Airlines goals are to maximize the daily flying time of the plane with the goods because of the high costs for example fuel loading and unloading goods. Package carriers are transportation companies like FedEx, UPS and DHL, which are well known around the world they use air, truck and rail as a transportation mode. Some package carriers provide other value-added services that allow shippers to speed the inventory flow of goods but would cost them more money. Truck is one of the biggest dominates modes of freight transportation it is used all over the world and counts for over 75 percent of the freight bills making use of truck freight cuts down costs for most of the companies in the transportation business. Even though using trucks can be more expensive than rail it offers the advantage of door-to-door shipment and much shorter delivery times. Rail transportation is used to move large shipments over a long distance because it costs less and you are able to move more goods. Sea transport is more primarily used for the movement of much large bulk commodities because it’s the cheapest mode for carrying large products however it is also the slowest mode of transportation for example shipping things from the UK to Australia you would be looking at more than 30 days waiting time. Pipeline transportation primarily used for transporting things such as petroleum products natural gas and oils. Intermodal transportation is the use of using more than one mode of transport to move shipments to destinations. Ampuja,Jack (2002) it is necessary to choose the right mode of transport because there are different methods of transportation used in the transportation industry, you have to consider the transport mode before shipments. An important factor to consider is that transport companies can compete with each other which is good for consumers. As air transport networks expand and the airfreight unit cost falls, both road and sea lose volume. Innovation of refrigerated containers helps a lot of suppliers that sell products that need to be kept under different temperatures. For example, fruit and vegetables arriving to Europe from overseas can now be shipped as sea fright and some off them require refrigeration". [Colin Scott]