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Name: Sunil Mohan Student Id: A00115915
Name: Sunil Mohan Student Id: A00115915
INTRODUCTION:
With the growing importance of transportation, logistics, and the commodity economy to
support industrial activities, direct investment in procurement could have a significant impact
on the national, domestic and regional economy. At the same time, the relative availability,
quality, and cost of various transportation services, especially those related to the important
functions of transportation and infrastructure influence local decisions of firms.
Moreover, only with the help of transportation, the country can increase its imports and
exports business which directly or indirectly have impact on the economy of the country.
Also, this will increase the country-country relationships by which one nation can expand
their foreign business and bring more and more foreign brands in their own country, which
enlarge its market and also increase country’s overall income.
Moving further, with the help of transportation facilities, villagers can also come to the city
for employment and for other needs. In this way, it will decrease the unemployment rate of
the country. Also, due to more and more people using public transport will increase the
economy of the country.
The economic value of the transport industry can be assessed from a macroeconomic
and microeconomic perspective:
At the macroeconomic level (the importance of global economy), transportation and supply
chain are linked to the level of output, employment, and revenue in the national economy. In
most developed countries, transportation composes between 6% and 12% of GDP. In
addition, equipment costs between 6% and 25% of GDP. In addition, the value of all
transport assets, including infrastructure and vehicles, could easily undermine the GDP of a
developed economy.
At the microeconomic level (the importance of transporting certain parts of the economy),
transportation is linked to manufacturer, consumer and distribution costs. The significance of
specific transport services can be assessed for each economic sector. Often, higher income
levels are associated with a larger share of travel expenses. Transport accounts, on average
between 10% and 15% of household expenses, while accounting for about 4% of the cost per
unit of production, but this figure varies considerably from sub-sectors.
1.2 Identify different transportation methods and evaluate using a cost- benefit analysis
approach
There are multifarious ways of transportation such as road, railroad, air, sea and multimodal
transportation that is combination of different transportations to meet the various needs.
Some innovative methods like drones are used for short distances in specific operational
conditions.
Road is most convenient and flexible method of transportation which does not need any
beforehand condition for travelling. It is one of the most preferred modes for traveling short
distances. However, it is not that cost effective over long routes. Also, road has many
disruptions like traffic congestions, traffic lights, speed limits and so on. Moreover, road is
more prone to accidents than other modes of transportation. It is more useful for small
quantity to be transported over small distances. Road has some limitations like road
transports burn more fuel even for small amounts of load and also has more costs for drivers
as compared to railroads.
Railroad is a safer, fast and low cost as compared to road, method of transportation. Also,
railroads are more environments friendly and less prone to accidents and it can carry larger
volumes over long distances. However, it has its own shortcomings, as a railroad is not
available everywhere like in rural areas
Sea / Waterways are convenient and cheapest mode of transport for importing and exporting
of heavy goods. There is minimal handling in this that means very less chances of cargo get
damaged and also will reach to its destination safely. Also, the containers used in shipment
through sea can be used further on rail or road transport. However, there are less navigable
routes in seas; therefore it is used for overseas transportation of heavy, bulky items which do
not have very high economic value.
Air transport is faster, safer and more reliable mode of transportation. It is used to transport
items which have very high economic value and which need to be delivered immediately
irrespective of the cost involved. However, It is the costliest mode of transport and used for
high value, high priority items, which can be sent virtually everywhere.
Drones are an innovative mode which is used for transporting goods in some places that are
difficult to access. Their scope is limited and can be used for delivering small cargo over
short distances efficiently, where other modes are ineffective.
Regulations which states conditions under which goods can be transported: These
regulations states, in what all conditions the goods can be transported from one place to
another. For example a good which was imported from another country, cannot be
transported until and unless released from customs.
Regulations which states under what all conditions goods can be delivered: These
regulations tell us the conditions and rules under which a person can deliver goods to a
consignee or a company. For example legal goods that has been reported under section 12 of
the act.
Transporter liability Regulations: These regulations states, what are the liabilities of the
transporter while shipping the goods from one place to another.
Security regulations: This regulation takes care of the security of the goods while in
transportation. These regulations state how the goods are secured and who are liable for
security of the goods when being transported.
1.4 Determine opportunities to make effective use of specialized supply chain intermediaries
(e.g., freight forwarders, transport specialists, customs brokers, third-party logistics providers,
etc.).
Specialized Intermediaries in the supply chain can provide various benefits and opportunities
to a business organization by saving time, cost, and efforts. In international trade, specialized
supply chain intermediaries can help to effectively handle the complexities at a wider level.
When there is no experience in any particular state of supply chain management, the
companies can undertake this as an opportunity to make effective use of specialized supply
chain intermediaries like for insurance, transportation, and finance, etc. In today's era, when
the competition is too tough and all that a company wants to do is to focus on producing the
best quality goods and rendering effective services, making effective use of specialized
supply chain intermediaries helps in saving quality time and helps the company to focus on
other core areas of the business.
Goods are distributed through channels to reach the destination consumption points. These
intermediaries are independent groups or organisations in these channels to make the product
available for consumption purposes. There are majorly four types of intermediaries :
1. Brokers
2. Wholesalers
3. Distributors
4. Retailers
The use of specialised intermediaries in the supply chain mechanism can be in the following
ways:
2. FREIGHT FORWARDERS :
Freight forwarders refers to the indiviuals involved in coordination and shipment of goods
from place to the other. It further involves cost effective transfer of goods , managing the
logistics to ensure that the goods arrive on time . They bring up the oppurtunities of
negotiating the tariffs, custom regulations , managing the requirements wheather the transfer
occurs via land, sea or air. So help in managing the risk avenues.
3. CUSTOM BROKERS :
The entry of foriegn made goods is possible through the imposition of customs, and the
collections of the respective customs duties. This complete set up of duty collection on behalf
of importers is done by the brokers. Companies with low knowledge of import regulations
can make effective use of brokers, who play an important role as a consultant to thus
strengthen the supply chain.
Thus we can say that some of the opportunities that trigger to make effective use of
specialized supply chain intermediaries can be: when the business is expanding on a global
level, wants to win the competition, need to saving cost and time, getting the best and
specialized services, and lastly the customer attention and retention.
1.5 Explain transport management systems and other transportation technologies and their
impact on the inbound and outbound transportation activities along the supply chain
Transportation management systems are core technology used in supply chain management.
They are well programmed software that helps in optimization of shipment of goods. The
users of this software range from manufacturers, wholesalers, retailers etc. It refers to a
logistics platform that uses technology to help the buisnesses plan, execute and optimise the
physical movement of goods in both inbound and outbound stations.
It streamlines the shipping process and makes it easier tp manage the buisness operations ,
since we live in a global trade environment . So there is a heavy need of a system to allow
easy navigation in this complicated supply process.
Other innovative technologies that are involved in the transportation sector of supply chain
are :
2. DIGITAL ASSISTANCE :
They are often referred to as chatboxes which provide conversational assistance and
responses for the shipment information thus improving customer service.
3. BLOCKCHAIN :
They build complex integrations among shippers, customers and carriers.
The impact of the TMS (transport management system ) can be covered in terms of the
benefits the system provides to both inbound and outbound transportations. They are as
follows :
Reduced costs to businesses thus to the end customers as well
The supply chain gets simplified across various terrains and boundaries
Improvement in visibility , security in terms of transit
Better import and export compliance
Improvement in customer services with real time updates
Avoids miscommunication between supply chain partners
Leverage cross docking : Since cross docking refers to unloading products on
the dock and reloading onto the outbound truck this process involves both
inbound and outbound frieght and is well managed by the TMS.
Better dock and yard management
In this way the TMS and other innovative transport technologies contribute and impact the
inbound and outbound transportation .