TEXT I: ROLE OF TRANSPORTATION IN THE

SUPPLY CHAIN

Before reading the text check the meaning of the Key Words
in the dictionary.

Nouns: costs, opportunities, party, mode, level, responsiveness,

network
Verbs: to transport, to amount, to lower, to exchange, to respond
to, to invest, to create, to take place, to suit, to evaluate,
to consider, to decrease, to increase, to communicate, to allow,
to own

The term “transportation” refers to the movement of product

from one point to another as it moves from the beginning of
a supply chain to the customer. In the United States, for example,
freight transportation costs are 6% of the GDP (Gross Domestic
Product).
Any supply chain’s success is closely linked to the appropriate
use of transportation. Logistics companies effectively lower costs,
using systems as “Cross- docking” – a process, in which product is
exchanged between trucks so that each truck going to a specific
destination has products from different suppliers.
Today, the growth in shipments to and from China is creating
both problems and opportunities for logistics companies. Many
large corporations have already invested in buying offices in China
and India.
There are two key players in any transportation that takes
place within a supply chain. The shipper is that party that requires
the movement of the product between the point of origin and the
point of consumption. The carrier is the party that moves or
transports the product.
The modes of transportation include water, rail, intermodal,
etc.
 Rail and water are best suited for low-value and large
shipments that do not need to be moved in a hurry. Air and package
carriers are best suited for small, high-value, emergency shipments.
Logistics firms should take into consideration a combination
of a) transportation costs; b) inventory costs; c) the level of
responsiveness to the customers’ requirements. Managers should
consider an appropriate combination of company-owned and
outsourced transportation to meet their needs. Managers must also
use the information technology available to help decrease cost and
improve responsiveness in their transportation. For example,
satellite-based communication systems allow carriers to
communicate with each other.

UNDERSTANDING THE MAIN POINTS

1. Review questions.
1. What does the term “transportation” imply?
2. What do logistics companies use to decrease overall costs?
3. What are two main players in any transportation that takes
place within a supply chain?
4. What modes of transportation are used in Logistics?
5. What is the least expensive mode of transportation?
6. What is the fastest mode of transportation?
7. What is the information technology used for?
8. What do satellite-based communication systems allow
carriers to do?
Exercise 1
Match the following terms with their definitions.

Shipper commercial or industrial property such as

a building, plant, or structure, built, established,
or installed for the performance of one or more
specific activities or functions

Inventory The party that requires the movement of the

costs product between two points in the supply chain

Warehouse Facility designed for temporary storage

Facility The costs related to storing and maintaining its

inventory over a certain period of time
 TEXT II

MODES OF TRANSPORTATION IN LOGISTICS

Before reading the text check the meaning of the Key Words in
the dictionary.

Nouns: mode, infrastructure, type, vehicle, consigner, consignee,

consignment, route, container train, tonnage, rail, conveyance,
distance, crane, trans-shipment
Verbs: to refer to, transport, to transfer, to move, to carry,
to compare, to recognize, to power, to deliver, to load, to unload,
to haul

Logistics refers to the transportation of merchandise – raw

materials or finished products – from the point of production to the
point of final consumption. Different modes of transportation –
road, rail, water and air – can be used for the effective management
of merchandise. Every mode of transportation requires a different
set of infrastructure, type of vehicles, technological solutions and
regulations. All modes of transportation have different costs, service
and transit times.
There are the following types of cargo (freight): a) general
cargo (goods packed in boxes); b) bulk cargo (large quantities of
cargo, e.g. sand); c) bulky cargo (large individual items, e.g. cars).
A consigner (someone who ships goods) chooses how to send the
consignment (these goods) to the consignee (someone who receives
these goods) by water, road, railway, air.
1) Road
Road transportation is one of the most basic and historical
means of transportation. Road transport is the principal means of
transport in the European Union for both passengers and goods.
Today, the European Union has almost one vehicle for every two
residents, and road freight traffic represents more than two thirds of
the total tonnage. There are many different types of vehicles,
although trucks are typically used for carrying or delivering freight.
Road transportation offers a relatively lower cost compared to other
logistic forms and has a widely recognizable and flexible route.
However, transportation by road takes a relatively longer period of
time than other means of transportation. Besides, it offers a limited
capacity. Road transport is most often used for comparatively
inexpensive, non-perishable items or for shorter distances.

2) Rail

Rail transport uses freight trains for the delivery of

merchandise.
Freight trains are usually powered by diesel or electricity. A
freight train hauls cargo using freight cars specialized for the type
of goods. Freight trains are very efficient, economical, and have
high energy efficiency. However, their use can be reduced by lack
of (falta de) flexibility, if there is need of trans-shipment (Cambiar
de medio) at both ends of the trip due to lack of (falta de) tracks
(vías) to the points of pick-up (recogida) and delivery. Container
trains have become the dominant type in the US for non-bulk
goods. Containers can easily be trans-shipped to other modes, such
as ships and trucks, using cranes (grúas).
Passenger trains are part of public transport; they can
perform a variety of functions including long distance intercity
travel and local urban transit services.
UNDERSTANDING THE MAIN POINTS

1. Review questions.

1. What modes of transportation can be used for the effective

management of merchandise?
2. What does every mode of transportation require?
3. What types of cargo do you know?
4. What are the main advantages of road transportation?
5. What vehicles are normally used for carrying or delivering
freight by road?
6. What is road transport most often used for?
7. What does rail transport use for the delivery of
merchandise?
8. What trains have become the dominant types in the US for
non-bulk goods? Why?
9. What functions can passenger trains perform?

2. Decide whether the following statements are true or false

1. There are four types of cargo (freight).

2. Goods packed in boxes are called bulky cargo.
3. Large quantities of cargo are called general cargo.
4. Large individual items are called bulk cargo.
5. A consigner chooses how to send the goods to the
consignee.
6. All modes of transportation require the same set of
infrastructure, type of vehicles, technological solutions and
regulations.
7. All modes of transportation have similar costs, service and
transit times.
8. Rail transportation is one of the most basic and historical
means of transportation from one place to another.
9. Road transportation offers a relatively higher cost than
other logistic forms.
10. Transportation by road takes a relatively shorter period of
time than other possible means of transportation.
11. Road transport offers an unlimited capacity.
12. Rail transport is most often used for relatively inexpensive,
non-perishable items or for shorter distances.
13. A freight train carries cargo using freight cars specialized
for the type of goods.
14. Freight trains are very inefficient.
15. Containers can easily be trans-shipped to other modes, such
as ships and trucks.
 TEXT III

MODES OF TRANSPORTATION IN
LOGISTICS: CONTINUED

Before reading the text check the meaning of the Key Words
in the dictionary.

Nouns: vessel, compartment, pipeline, advantage, disadvantage,

airline, aircraft, harbour, gas, oil, fluid, refinery, pipeline
Verbs: to link, to connect, to lay, to correspond to, to vary, to
categorize
Adjective: Perishable

3) Water (maritime transportation)

Sea transport has been the most important carrier of freight
(carga) throughout history(a lo largo de la historia). Main maritime
routes include oceans, coasts, seas, lakes, rivers and channels.
Water transport uses ships and large commercial vessels that carry
billions of tons of cargo every year. Sea, lake or river transport is
particularly effective for significantly large quantities of goods that
are non-perishable in nature and for cities or states that have water
access. Moreover, transport via water is considerably less expensive
than other logistic methods, which makes it one of the most widely
used choices of transport for merchandise.

4) Air transportation
An airline is a company that provides air transport services
for travelling passengers and freight. Airlines vary from those with
a single aircraft carrying mail or cargo, to full-service international
airlines operating hundreds of aircrafts. Airline services can be
categorized as domestic, or international, (intra-continental or
intercontinental) and may be operated as scheduled services or
charters. Air routes are practically unlimited. Merchandise is
carried in cargo compartments on passenger airplanes, or by means
of aircraft designed to carry freight.
 Although air transport is more expensive than all other means
of transportation, it is definitely most time-efficient. Perishable
merchandise like fruits and vegetables are generally sent by air.
More recently, air transportation has been accommodating growing
quantities of high value freight and is playing a growing role in
global (international) logistics.

5) Pipelines

Pipeline transport is the transportation of goods (liquids,

gases, chemically stable substances) through a pipe. Pipeline routes
are also practically unlimited as they can be laid on land or under
water. The longest gas pipeline links Alberta to Sarnia (Canada); it
is 2,911 km in length. The longest oil pipeline is the Trans-Siberian,
extending over 9,344 km from the Russian arctic oilfields in eastern
Siberia to Western Europe. Pipeline construction costs differ
according to the diameter, and increase proportionally with the
distance and with the viscosity of fluids. Pipeline terminals are very
important, since they correspond to refineries and harbours.

6) Intermodal and multimodal transportation

Intermodal transportation concerns a variety of modes used

in combination so that the respective advantages of each mode are
better exploited. It involves the movements of passengers or freight
from one mode of transport to another.
Multimodal transportation (also known as combined transport)
is the transportation of goods under a single contract, but performed
with at least two different means of transport; the carrier is liable
for the entire carriage, even though it is performed by several different
modes of transport (by rail, sea and road, for example). The carrier does
not have to possess all the means of transport; the carriage is often
performed by sub-carriers (actual carriers). The carrier responsible
for the entire carriage is referred to as a multimodal transport
operator, or MTO.
UNDERSTANDING THE MAIN POINTS

1. Review questions.

1. What are main maritime routes composed of?

2. What do ships and large commercial vessels carry?
3. What is sea transport mainly effective for?
4. Is transport via water considerably less expensive than other
logistics methods?
5. Are air routes practically unlimited?
6. Is air transport more expensive than all other means of
transportation?
7. How can airline services be categorized?
8. Are perishable merchandise sent by water?
9. What does pipeline transportation involve?
10. What is the longest gas pipeline?
11. What does intermodal transportation concern and what does it
involve?
12. What does multimodal transportation involve?
13. What does MTO stand for?

2. Decide whether the following statements are true or false.

1. Main maritime routes are composed of oceans, coasts, seas,

lakes, rivers and channels.
2. Water transport uses ships and large commercial vessels
that carry billions of tons of cargo every year.
3. Sea, lake or river transport is particularly effective for small
quantities of goods.
4. Transport via water is considerably more expensive than
other logistics methods.
5. Air routes are limited.
6. Air transport is indisputably most time-efficient.
7. Perishable merchandise like fruits and vegetables are mostly
sent by road.
8. More recently, air transportation has been accommodating
growing quantities of high value freight.
9. An airline is a company that provides air transport services
for traveling passengers and freight.
10. Airlines vary from those with a single aircraft carrying mail
or cargo, to full-service international airlines operating
hundreds of aircraft.
11. Airline services may be operated as scheduled services or
charters.
12. Pipeline routes are virtually unlimited.
13. The longest oil pipeline is the Trans-Siberian.
14. Pipeline construction costs increase proportionally with the
distance and with the viscosity of fluids.
15. Pipeline terminals are very important since they correspond
to refineries and harbours.
16. Intermodal transportation presupposes that the respective
advantages of each mode are better exploited.
17. Intermodal transportation is also known as combined
transport.
18. Multimodal transportation is performed with one means of
transport.
19. In intermodal transportation, the carriage is often performed
by sub-carriers.
20. Sub-carriers are also called “actual carriers”.

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