TRANSPORT

IMPORTANCE OF TRANSPORT 

Transport is necessary to provide for the physical movement of people and goods from where they are abundant (such as plantations, mines, farms) to the factory where they are needed as raw materials for the manufacture of finished goods, or where they are processed.  It is again necessary to send these processed or finished goods to their markets, and ultimately, to the final consumers, both domestic and foreign. A fast, cheap and efficient transport system has led to the extension of both local and overseas markets.  This has enabled producers to specialize and engage in large-scale production with its related cost savings. It has also led to different regions specializing in those goods in which they find comparative advantage in producing on a commercial basis. Trade between different regions within and outside the country expanded. Consumers all over the world can now buy goods produced in far-off countries. Thus, they have greater choice. Standards of living have improved. The main means of transport in home trade are by road, rail, rivers and canals whilst in foreign trade they are by air and sea. 

Modes of Transport 
Used in Home Trade and Foreign Trade

 

Road transport  

This is the most important means of transport in terms of volume of freight carried. 

Advantages 

Door-to-door delivery: There is the possibility of arranging delivery from the consignor's straight to the consignee's door. It minimizes risk of loss due to damage or pilferage. It does not require unloading and reloading from one carrier to another as in other modes of transport such as rail or sea. It is suitable for the delivery of fragile goods and items like furniture where even slight damage may be serious. 

Flexibility: It is accessible to most regions, however remote. Roads are more widespread and can reach most parts of the country. It is even possible to arrange for special types of truck for specialized items like oil, horses and liquefied natural gas. It is not restricted by the time schedule like that of the rail service. A road transport vehicle will take the shortest route, whereas trains are restricted to where the tracks go. Roads are most suitable for difficult loads especially in terms of height and weight. 

Competitive freight charges: Road transport is cheaper and faster for short distances because of lower operating costs and less handling charges. Strong competition between haulers keeps costs down. The proper consolidation of cargo and route planning ensure that a carrier does not return empty. Labor costs are lower compared to those of rail as a carrier needs only a two-man crew. 

Disadvantage

Uneconomical (for very heavy loads over 200 miles) : Heavy bulky goods like timber, cement and tin ore are better handled by rail; road transport has a limited load capacity and heavy vehicles are slow on long distances. Trains have powerful engines which can haul many tons. For bulky materials, the cost per ton is less than that by road. 

Slower travelling time: A train journey will take less time than a road journey, especially for long distance. Drivers of road carriers have to sleep and rest. Road journeys may be slowed down because of traffic congestion, floods and poor weather conditions. 

High social costs : Higher social costs in terms of air pollution, noise and damage to roads and buildings are incurred. 

Company vehicles 

Many businesses prefer to use their own Lorries instead of hiring them from road haulage companies. 

Advantages 

It is more economical in the long run if there are regular and sufficient loads to be carried. It provides direct contact to customers and the possibility of responding to customer quickly. Goods are better handled and taken care of. Delivery schedules in terms of time and place can be arranged to suit the customers. As the company logo and particulars like contact numbers usually appear on the vehicles, free advertising is done. 

Disadvantages 

High capital is involved to purchase the vehicles. High running costs are incurred for fuel, repairs and servicing, road tax and insurance, wages of drivers and managers. 

Rail transport 

It is the cheapest mode of land transport for long journeys, especially for bulky and heavy items like tin ore, timber and containers. Special containers are available for specialized items like oil, tin ore and livestock.

Advantages 

Cheap :It is cheap for carrying goods in bulk over long distances. 

Speed : It provides faster services for goods and passengers especially over long distances. It avoids traffic jams in the cities. It is not affected by poor weather conditions. 

Special arrangements: Special transporters may be provided for specialized traffic like containers, grain, etc. British Railways allows the producer to use special wagons called company trains to move goods like coal and oil. Container traffic is encouraged to use the rail road by the provision of special liner trains which run regularly between the major cities in UK and the freightliner system where special lorries collect, convey and deliver container loads which are hauled by rail on special wagons. 

Environment friendly :Less damage (like air pollution) is done to the environment compared to road transport. 

Safety: It is also safer to transport dangerous goods by rail. 

Disadvantages

Too much handling : There is the need for unloading and reloading from the carrier to the railway truck and vice-verse when the train reaches its destination. This increases the risk of loss due to damage and pilferage. Containerization and the development of the freight-liner system by the British Railways have reduced this disadvantage. 

Inflexible : Trains can only go where there are lines. They only move according to schedule and have fixed destinations. This means that transshipment is necessary at the end of the rail journey. 

High costs for short distances and small consignments: Costs tend to be high for short hauls and for small consignments by rail. 

High capital costs: Capital costs are heavy. Maintenance of track and railway rolling stock is also expensive.

Inland waterways, rivers and canals 

Transport by water is a cheap means of inland transport for heavy and bulky goods like logs, grain and metals. It requires navigable rivers free from rapids and constant silting. Canals may be expensive to build and maintain. 

Pipelines 

Advantages 

Liquid and gaseous goods like liquefied natural gas and petroleum are transported over long distances from the place of production to the refineries, and from there, to the consumers in their homes via pipelines because this is the safest and most economical method to transfer such hazardous (inflammable) material in bulk. Goods in bulk like wheat are also transferred via pipelines from the silos (places of storage) at the ports into special bulk carriers. Maintenance costs are low because very little labor is needed and fuel costs are lower than that required if vehicles were used to transport these goods. There are chances of loss due to pilfering and evaporation is minimized. It is not affected by weather conditions. There is less pollution of the environment compared to vehicles. 

Disadvantages 

High initial capital cost is involved in installing the whole system, which is normally laid underground. It is rather limited in use. Once built, these pipelines can only be used the particular type of product for which it was originally installed. Long-term use must be guaranteed to make the laying of the pipelines a viable project. 

Air Transport 

The major part of air transport is concerned with passenger traffic. Sending consignments of goods by air has now become quite popular with traders and manufactures, although air freight charges are very expensive. This is because they have realized that when goods ordered reach their destination quickly, the manufacturer saves by preventing a possible loss due to idle factories or overstocked warehouses. Traders in fashionable goods may also gain as they may be able to sell the goods at the best price whilst the fashion is still very popular due to fast transportation by air. Packing costs and insurance premiums for goods sent by air are less than those for goods sent by sea. Moreover, a journey by air is of a shorter duration and risks of accidents are reduced; so the air transport insurance premium is lower than shipping. 

The increase in size of aircraft makes it more economical to run them. Improvements to design, e.g. the fuselage and engine improve fuel efficiency and reduce fuel costs. Larger doors, from the tail and nose reduce loading and unloading time, thus save labor costs. Cargoes of larger size can now be transported by air. With technological improvements, aircraft are now faster and more reliable. More safety features in aircraft, e.g. the 'auto-pilot, improve landing and navigation of the aircraft. With an increase in the number of airports and better handling facilities now available in most airports, less time is wasted. Nowadays, special lightweight containers are available for air cargo. 

Characteristics of goods carried by air 

Goods must be normally within the prescribed limits set by the airline in terms of weight and volume. They are usually light and fragile items. Heavy and bulky goods are not accepted. Goods can be used to ship live animals, e.g. transporting of rare animals like pandas from China to the zoo in the UK. They can be urgently required goods such as medicinal drugs for a flood affected area where there is an epidemic, spare parts and perishable of great value. They must be sufficiently valuable, e.g. diamonds or light office equipment to be able to bear the relatively high air freight. There is less fear of damage and less packing needed.

Advantages 

Speed : Air is the fastest form of transport. 

Free from topographical obstacles: Airplanes can take the shortest straight-line routes since they are not obstructed by hills, except when it is necessary to avoid high mountain ranges or areas of uncertain weather conditions.

Lower packing costs: Packing costs are less because the goods do not require special protection like those sent by sea. 

Lower insurance costs: Insurance costs are lower than for sea transport because the goods are at risk for a shorter length of time. 

Less documentation: Less documentation is required compared to sending goods by sea. 

Lower fees for handling and storage: The costs of handling and storage are lower. 

Reduction of other costs: The advantage of speed reduces other costs. Goods reach their destinations faster and arc sold off more quickly. Since fresh stock can arrive faster, there is no need to hold large stocks in warehouse. Moreover, the chances of deterioration, damage and pilferage are reduced. So, less working capital is needed.  

Disadvantages 

Expensive: Air freight charges are expensive because of heavy capital investment and maintenance costs incurred by airway companies. 

Limited carrying capacity: As an aircraft has limited cargo capacity, bulky and heavy goods, e.g. cement and coal are seldom sent by air. 

Location of airports outside city limits: Airports are normally located on the fringes of large cities. Time is lost in having to transport the goods from the airport to the city. This offsets the advantage of speed of air freight. 

Weather conditions: It can be affected by bad weather conditions. 

Sea transport 

Owing to the high costs of air transport, the bulk of goods exported is sent by sea. Sea transport is still one of the cheapest and most convenient ways of sending heavy, bulky goods such as timber, iron and grains. This is because unlike other modes of transport, seas do not need maintenance and only a small amount of power is needed to steer a ship. With containerization loading and unloading are speedier and pilferage and damage to goods (whilst in transit) are reduced considerably. Specially constructed trucks can now deliver the containers right up to the consignee's door. Moreover, ships have refrigeration facilities for meat and dairy products. 

Advantages 

Cheap: Sea transport is cheap for carrying bulky and heavy goods as well as goods in bulk over long distances. 

Refrigeration facilities: Even perishable goods like fruit and meat can be sent by sea because of refrigeration facilities provided by the ships. 

Containerization: Containerization reduces the loss of goods due to pilferage, damage by weather or poor handling. Handling costs at docks are reduced. Special carriers by road or rail are available to deliver containers from the port to the consignee's door-step. 

Disadvantages

Slow: It is not suitable for goods urgently needed. 

Documentation: Documentation is complex. 

Other costs involved: Expenses for insurance premiums, packing costs, and storage and port dues are high. 

Delivery to inland destination: Delivery of goods directly to an inland destination cannot be arranged and costly transfers may be needed. 

Weather conditions: Bad weather can cause delays and losses at sea. 

Water pollution: Oil spills, a result of collision at sea, can cause serious water pollution. Loss of marine life may be quite extensive. It is very difficult and expensive to clean up such oil spills.

FACTORS INFLUENCING THE CHOICE OF TRANSPORT

The choice of transport whether by air, road, rail or by ship (with specification to the particular type of vessel) usually depends on the relative advantages and disadvantages of each mode of transport. The following factors have to be considered first, before one makes a selection.

Distance : Although the cost of haulage increases with distance; the cost of rail and shipping services does not increase in proportion to the distance traveled. Thus, it is more economical to use the rail or shipping services for long distance haulage whilst road transport is faster and cheaper for short distances. 

Nature of the goods: Perishable goods need quick delivery and minimum handling. Thus, in home trade, specially constructed trucks are used to transport vegetables, milk and fish. In foreign trade, perishable goods like expensive flowers are normally sent by air. Sometimes, special containers and handling may be needed depending on the nature of the goods. The transportation of oil may require the use of oil tankers in foreign trade and, possibly, pipelines or special oil trucks in home trade. Heavy goods are best sent by sea because it is cheaper. 

Quantity/Bulk : Bulky goods are normally transported by railway and canals in home trade, and by sea in foreign trade.  The railway is of particular advantage in bulk haulage because the powerful locomotive can haul many wagon-loads of goods such as timber, ores and containers. 

Value of the goods: Expensive goods which are small and light are normally transported by air. The risk of loss due to pilferage and damage is less because of the short duration of the journey. If necessary, they may be transported by road since the absence of transshipment, and the constant surveillance of goods would minimize loss due to pilferage. It is not advisable to send valuable goods by train since the rail service is rather impersonal and it is very difficult to keep the goods under constant surveillance. If valuable cargo has to be sent by sea, it is best to send it by ocean liner or passenger liner which calls at fewer ports than does a cargo liner. The goods will then reach their destination faster although the freight charges are higher. 

Risk of damage: Fragile goods or goods which are breakable may need careful packing and handling and are normally sent by sea or air. It is not advisable to send such goods by rail. Special precautions like 'Handle with Care — Fragile' are often printed on them. 

Urgency/Speed : Goods which are urgently needed are sent by air — the fastest mode of transport. 

Convenience: The most convenient mode of transport is the one most available to the consignor with the least formality. Road transport, especially the use of specially constructed trucks to carry standard-sized containers from container ships, is most convenient because of its door-to-door delivery services. 

Cost: Cost is of prime consideration for a consignor who would normally choose the most economical mode of transport, unless other factors like urgency and fragility, for example, take priority in a particular situation. Small parcels of food, presents, etc., can be sent fairly cheaply by parcel post to any part of the world.

Reference:
Betsy, L., & Tan, S.K. (1999). Transport., Modern certificate guide: Elements of Commerce (pp. 141-153). Singapore: Oxford University Press.