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Describe The Five Modes of Transportation

Rail transportation has the largest percentage of intercity freight ton-miles due to its ability to economically transport large shipments over long distances with relatively low variable costs. However, motor carriers have the largest revenue because trucks have more flexibility and lower fixed costs to handle smaller shipments moving shorter distances door-to-door. While trains are faster and more cost-effective for bulk cargo over long hauls, trucks dominate the last mile of delivery due to their flexibility and ability to efficiently handle smaller loads.

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406 views3 pages

Describe The Five Modes of Transportation

Rail transportation has the largest percentage of intercity freight ton-miles due to its ability to economically transport large shipments over long distances with relatively low variable costs. However, motor carriers have the largest revenue because trucks have more flexibility and lower fixed costs to handle smaller shipments moving shorter distances door-to-door. While trains are faster and more cost-effective for bulk cargo over long hauls, trucks dominate the last mile of delivery due to their flexibility and ability to efficiently handle smaller loads.

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ThuraMinSwe
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Describe the five modes of transportation, identifying the most significant characteristic of each.

Rail: characteristics of railway transportation:


• Economically transport capability for large shipment
• Railroads have largest percentage of intercity freight ton miles
• Train enjoys relatively low variable operating cost
• Train enjoys relatively large tonnage over long distance
• Railroad operation have fixed cost
• Electrification and technology development reduced variable cost per ton
• Train is faster and more expensive to operate
• It is nonstop from origin to destination
Truck: characteristics of truck in highway transportation:
• Trucks have flexibility to transport.
• Motor carriers have the largest revenue.
• It is able to operate on a variety of roadways
• Ability to operate door to door
• Trucks have relatively small fixed investment than other modes.
• Truck operations are characteristics by low fixed cost and high variable cost.
• Truck handle small shipment moving short distances.
• Easy to moving from wholesaler warehouses to retail store.
Water: characteristics of waterway transportation:
• Water is oldest mode of transportation
• Capacity to transport extremely large shipment
• Ability to achieve economy of distance.
• Moderate fixed cost
• Low variable cost to transport large tonnage.
Pipeline: characteristics of pipeline transportation:
• Pipeline transportation use basically for petroleum ton miles movement.
• It transported natural types of product
• Pipeline is unique than others.
• Pipelines operate 24 hr and 7 days nonstop.
• Limited only commodity change over.
• Highest fixed cost and lowest variable cost.
Air: characteristics of air transportation:
• The newest but utilize mode of transportation, Accounts for only 1% of intercity ton-miles
• Airfreight lies in the speed than others
• Very much costly.
• Use sensitive product transportation.
• Fixed cost is 2nd lowest but variable costs are extremely high
Driverless truck because it inherits the merits of truck, but the labour requirement is substantially
reduced so it reduces the variable cost

7 economic drivers influencing transport cost. Select a specific product and discuss how
each factor impacts determination of freight rate?
Transportation costs are driven by seven factors. While not direct components of
transport tariffs, each factor influences rates. The factors are: (1) distance, (2) volume,
(3) density, (4) storeability, (5) handling, (6) liability, and (7) market.
a) Distance is a major influence on transportation cost since it directly contributes to
variable expense, such as labor, fuel, and maintenance.
b) Weight The second factor is load volume. Like many other logistics activities,
transportation scale economies exist for most transportation movements. The
management implication is that small The loads should be consolidated into larger loads
to maximize scale economies.
c) Density A third factor is product density. Density is a combination of weight and
volume. In general, traffic managers seek to improve product density so that trailer
cubic capacity can be fully utilized.
d) Storeability refers to how product case dimensions fit into transportation equipment.
Although density and storeability are similar, it is possible to have items with similar
densities that stow very differently. storeability is also influenced by other aspects of
size, since large numbers of items may be nested in shipments where they may be
difficult to stow in small quantities.
e) Handling Special handling equipment may be required to load and unload trucks,
railcars, or ships. In addition to special handling equipment, the manner in which
products are physically grouped together in boxes or on pallets for transport and
storage will impact handling cost.
f) Liability includes product characteristics that can result in damage and potential
claims. Carriers must either have insurance to protect against possible claims or accept
financial responsibility for damage.
g) Market, Finally, market factors such as lane volume and balance influence
transportation cost.

Railroads have the largest percentage of intercity freight ton-miles (The total number of
tons of cargo transported during a reporting period, multiplied by the total number of
miles cargo is flown during that period), but motor carriers have the largest revenue.
How do you explain this relationship?
The ton-mile is a standard measure of freight activity that combine distance and weight.
Railway and motor both are the mode of transportation so they have the relationship but
rail taken largest percentage of intercity freight ton-miles because:
• Economically transport capability for large shipment is the reason rail continues to
handle largest percentage of intercity freight ton miles. Train enjoys relatively large
tonnage over long distance
• Train enjoys relatively low variable operating cost
• Diesel power, Electrification and technology development reduced variable cost per
ton, modified labour reduced the HR requirements resulting further cost reduction.
• As a result of deregulation and focused business development, rail traffic has shifted
from transporting a wide range of commodities to hauling specific freight.
• Train is faster and more expensive to operate
• It is nonstop from origin to destination
• Railroad operation have high fixed cost due to expensive equipment, right-of-way and
tracks, switching yards, and terminals.

But motor carries the largest revenue because:


• Trucks have flexibility to transport because it is able to operate on a variety of
roadways, Ability to operate door to door
• Comparing to rail, Trucks have relatively small fixed investment in terminal facilities
and it operates on publicly financed and maintained road. Truck operations are
characteristics by low fixed cost and high variable cost.
• In comparison to railroads, truck more efficiently handle small shipment moving short
distances.
• As a result of delivery flexibility, truck dominates the moving from wholesaler
warehouses to retail store. With the exception of small package goods moving the
premium air service, almost all less than 15,000 pound shipments are transported by
truck.
• An integrated logistics service provider (ISP) may perform services for multiple
shippers and thus gain both economy of scale and distance. Motor carriers have the
largest revenue.

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