Class Activity # 1

Student Name: VIPUL TYAGI Student ID #: 202104121

1. Importance of transportation in National and International Economies

Answer- Importance of transportation in National and International Economy: - Thus, both a
macroeconomic and a microeconomic viewpoint can be used to evaluate the economic
significance of the transportation sector.
 Macroeconomic Level: - Transportation and related mobility are linked to a group of output,
employment, and income within a national economy at the macroeconomic level (the
significance of transportation for a whole economy). The GDP contribution of transportation
ranges from 6% to 12% in several developed economies. Furthermore, between 6% and 25%
of the GDP may be attributed to logistical expenses. An advanced economy's GDP may
easily be half of what all transportation assets, including infrastructure and automobiles, are
worth.
 Microeconomic Level: - Transportation is correlated with producer, consumer, and
distribution expenses at the microeconomic level (the significance of transportation for
particular economic sectors). Thus, for each economic sector, the significance of particular
transportation-related activities and infrastructure may be determined. Typically, a higher
percentage of transportation costs in consumption costs is linked to income levels. An
average household spends 10% to 15% of its budget on transportation. Comparatively, it
makes up about 4% of the costs associated with producing each unit, albeit this percentage
varies significantly across sub-sectors.
2. Different Modes of Transportation
Answer- Building an effective supply chain from the six primary modes of transportation road,
sea, air, rail, intermodal, and pipeline is a crucial component of transportation management.
 Transportation by Road
Road travel is the original and most popular kind of transportation in logistics. Road
transportation has been around longer than any other method and is used more frequently than
any other mode in logistics, surpassing that of walking, horses, carts, bikes, cars, and trucks.
 Transportation via Sea
Waterborne shipping has been used for thousands of years and is still essential to modern
international trade. Maritime transportation is used to complete 90% of all international trade.
The biggest volume of freight of any mode of transportation may be transported by cargo ships
for the cheapest price on practically any significant body of water.
 Transportation via Air
Air travel is the newest kind of transportation. In both local and international trade, aeroplanes
are playing a bigger and bigger role. Air transportation is the fastest-growing and most time-
effective delivery method because to ever-improving technologies and virtually endless route
options. As a result, numerous businesses, including UPS and Amazon, have invested in their
own fleets of aircraft to obtain a competitive advantage in the expanding market.
 Transportation by Rail
Rail transportation was first used in the early 19th century and was immediately essential for the
western world's progress. For far more than 200 years, it has been a major factor in logistics. For
the biggest and heaviest payloads (bulk goods) travelling across land, rail is employed more
frequently in modern practise. Rail is perfect for long-distance and cross-country hauls since the
great bulk of railway infrastructure connects densely inhabited areas with wide, unpopulated
stretches of terrain in between. For instance, Canada is very sparsely populated between its
coasts, therefore anything transported more than 500 miles frequently needs to go via rail.
 Transportation Using Multiple Modes 
Multiple modes of transportation are frequently used to accomplish one shipment in logistics.
Take an SMB in Germany sending items to Oregon as an illustration. Most likely, their package
will start out on the road, change to rail, then marine, change to rail in the US, and finally arrive
in Oregon via road again. The goal is to lower expenses by utilising the distinct advantages of the
various modalities. Intermodal transportation is the word for this method, which is frequently
required in logistics.
 Transportation by Pipeline
The usual definition of a formal method of transportation excludes pipeline shipments. It is
crucial to recognise its significance in the current fossil fuel market, nevertheless.

3.Advantages and disadvantages of Water/Marine Transportation

Answer: - Advantages:
1. Less Maintenance Cost: Compared to road and rail transportation, water transportation has far
lower maintenance costs.
2. Reasonably priced: Compared to road and rail transportation, the transit channel is affordable.
3. Good for Bulky Commodities: Water transportation makes it simple and inexpensive to
transport heavy and bulky goods.
4. Useful During Natural Calamities: When rail and road transportation is hindered during
natural calamities like floods and rain, relief operations can be carried out via water transport.
5. Aidful in Defense: The development of shipping is important for national defence as well. It
goes by the name second line of defence as well.
6. Vital to International Trade: Water transport is crucial to international trade. India relies
heavily on water transportation for its international trade.
Negative aspects of water transportation: -
1. Slow Speed: This mode of transportation moves slowly. When the monsoon fails, the rivers'
water levels drop, making navigation challenging.
2. Riskier: Compared to other modes of transportation, water transportation is riskier because
there is always a chance that boats, or ships will capsize.

4. Advantages and disadvantages of Land (Road/Rail/Pipeline) Transportation

Answer: -
• Benefits of Land Transportation
1. Road transportation is inexpensive.
2. It's secure. Because there is little handling during road transit, damage to items is typically
substantially lower.
3. It's adaptable. It can get to the real loading and unloading location.
4. It allows even the average person access.
5. If products are to be delivered inside a specific area, such as when a dealer is to provide door
delivery, it is the only alternative.
6. When transporting commodities over long distances, rail is the best option.
7. It aids in the transportation of large and heavy items.
8. Road transportation is less reliable than rail transportation (bad road conditions make road
transport undependable).
 Road transportation's negative aspects
1. There is less carrying capacity.
2. The state of the roads has a significant impact on its efficacy. Poor roads could result in issues
like breakdowns and delay the shipment from being delivered to the market.
3.It moves slowly. Markets in India are competitive; hence it is unreliable.
4. The prices are not uniform.
5.Trains do not connect all locations.
6. Goods cannot be delivered by train to a door. One must make arrangements to pick up and
transport the things from the destination point to the desired location.
7. In general, rail transportation is not appropriate for short distances. It is mainly preferred when
the shipment needs to be transported to far-off locations.
8. Rail lines follow set paths. As a result, this form of transportation isn't flexible.
9. India's railways enjoy a monopoly. This gives the administration the advantage when it comes
to charging.
5. Advantages and disadvantages of Air Transportation
Answer: -
 Advantages:
1. High Speed: The top perk of air travel is its quickness. It is the fastest form of transportation,
making it the best option when efficiency is key.
2. Regular, Comfortable, Efficient, and Quick Services: It offers a consistent, Comfortable,
Efficient, and Quick Service.
3. No Investment in Track Construction: The installation and upkeep of surface track do not
necessitate a substantial capital outlay.
4. There are no physical obstacles in the path of air travel, thus it takes the quickest and direct
route possible.
5. Convenient Access: Air transportation can be utilised to convey people and commodities to
locations that are inaccessible by other modes of transportation.
 Despite its many benefits, air travel is subject to the following restrictions:
1. Extremely Expensive: It is the priciest mode of transportation. The cost of air travel is so high
that it is unaffordable for the average person.
2. Limited Carrying Capacity: Because of its limited carrying capacity, it cannot be used to
transport bulky, inexpensive items.
3. Uncertain and Unreliable: Due to the weather's significant influence on air travel, it is
unpredictable and unreliable. Scheduled flights may be cancelled and air service may be
suspended due to unfavourable weather conditions including fog, snow, or heavy rain.
4. Accidents and Breakdowns: When compared to other forms of transportation, there is a higher
likelihood of accidents and breakdowns. therefore, it carries a considerably higher danger.
5. Significant Investment: Building and maintaining aeroplanes demands a significant capital
outlay. Additionally, highly qualified individuals are needed to operate air services.
6. International Transportation Documentation
Answer: - Sales of commodities internationally, or across borders, present different obstacles
than sales in a home setting. Buyers and sellers are frequently in different countries, and the
products sold are frequently not in the seller's actual ownership but rather with a third party who
may be in a different nation or on board a ship. International sales invariably include shipping
the products, frequently over great distances. This indicates that preparations for the shipping
and insurance of the offered goods must be made by either the vendor or the buyer. Above all,
the seller and buyer must fulfil their respective primary obligations, which are the delivery of the
goods in accordance with the contract and the buyer's payment of the agreed-upon price (buyer),
while also attempting to make sure that the other party complies with the terms of the contract.
Sales using shipment conditions, such CIF and FOB5, have developed to make it possible to
perform an international sale of products to a large extent through documentation means, or by
presenting paperwork in exchange for payment. Banks frequently play a significant role in this
procedure since receiving money under a letter of credit gives the buyer and seller additional
protection.
Types of Documents Required: -
 Commercial and Proforma Invoices
 Bills of Lading
 Packing List
 Shipper’s Letter of Instructions (SLI)
 Automated Export System (AES) Filing
 Certificate of Origin (CO)
 Incoterms
 Safety Data Sheet (SDS)
 Operational Instructions
 Shipping Under a Letter of Credit

7. Relationship between Transportation and Logistics

Answer- Transportation and distribution services include two crucial but distinct components:
logistics and transportation. Logistics is the control of the inbound and outbound movement of
goods from the manufacturer to the final consumer. Transportation is the movement of things.
Even though these terms are frequently used synonymously, they refer to very different supply
chain components. Transporting goods and services from one place to another is the focus of
logistics and transportation. Even though the terms logistics and transportation are sometimes
used interchangeably, logistics simply involves the coordination of storage, transportation,
cataloguing, handling, and packaging of commodities. Moving goods from one place to another
is a function of transportation.
8. Integration of Transportation on global SCM framework – Inbound and Outbound
Answer- One of the primary goals of logistics and supply chain management is the integration of
processes along the supply chain's components in order to save costs and improve service. Of all
the supply chain operations, decision-making regarding freight transportation has remained a
disjointed activity that frequently operates independently within a functional silo and is subject
to the "beck and call" of supply chain partners. This is now starting to change as new thought is
being devoted to improving transportation and supply due to competitive pressures to squeeze
new levels of productivity in the procurement process (Potter et al. 2002c) as well as government
demands on industry to achieve more sustainable distribution systems (e.g., Department for
Transport 1999).