DL - Transportation & Storage [LESSON]

Transportation & Storage

Distribution Modes

Cargo (or freight) is goods or produce transported, generally for commercial gain, by ship, aircraft, intermodal train, van, or truck.

 

Plane - Commonly known as air freight, is collected by firms from shippers and delivered to customers. Aircraft were first used for carrying mail as cargo in 1911. Train - Trains are capable of transporting large numbers of containers that come from shipping ports. Trains also are used for the transportation of steel, wood and coal. Freight transport by rail is more economical and energy efficient than by road, especially when carried in bulk or over long distances. Rail has lost much of the freight business to road transport because of its lack of flexibility. Truck - Most frequently used form of transportation. Used primarily for lightweight shipments over moderate distances. Accounts for 80% of shipments weighing less than 1000 pounds. Ship - One of the oldest forms of transportation. Primary means of international distribution.

 

Advantages/Disadvantages

Distribution Mode

Advantages

Disadvantages
Air

Fast delivery time

Can reduce inventory and storage cost

Most expensive form of distribution (2x more expensive than truck)

Delays from breakdown and bad weather
Train

Low cost

Can carry large quantities at low per unit cost

Less energy

Safest modes of transportation

Lack of flexibility of delivery locations
Truck

Convenient

Can move products quickly which reduces the inventory retailers need to keep.

Costs more than train or ship

Susceptible to road delays

Size and weight restrictions between states
Ship Low Cost

Slowest mode of transportation

Affected by bad weather

Extra expense if goods have to be unloaded on to a truck or train to ship to a land locked location

Storage

Warehouse is a commercial building for storage of goods.

Warehouses are used by manufacturers, importers, exporters, wholesalers, transport businesses, customs, etc. They are usually large plain buildings in industrial areas of cities and towns and villages. They usually have loading docks to load and unload goods from trucks. Sometimes warehouses are designed for the loading and unloading of goods directly from railways, airports, or seaports. They often have cranes and forklifts for moving goods, which are usually placed on ISO standard pallets and loaded into pallet racks. Stored goods can include any raw materials, packing materials, spare parts, components, or finished goods associated with agriculture, manufacturing, or commerce.

Some warehouses are completely automated, and require only operators to work and handle the entire task. Warehouse management monitors the progress of products through the warehouse. It involves the physical warehouse infrastructure, tracking systems, and communication between product stations. Warehousing is critical in saving costs and timely order fulfillment, and today it is a vital part of supply chain management demand management. Even production management is to a great extent dependent on warehouse management. Efficient warehouse management gives a cutting edge to a retail chain distribution company. It should start at the container design stage of a product and not at the delivery of material in the warehouse.

Warehouse management systems often utilize Auto ID Data Capture (AIDC) technology, such as barcode scanners, mobile computers, wireless LANs and potentially radio-frequency identification (RFID) to efficiently monitor the flow of products. Once data has been collected, there is either a batch synchronization with, or a real-time wireless transmission to a central database. The database can then provide useful reports about the status of goods in the warehouse. A set of computerized procedures handle the receipt of stock and returns into a warehouse facility, model and manage the logical representation of the physical storage facilities (e.g., racking), manage the stock within the facility, and enable a seamless link to order processing and logistics management in order to pick, pack and ship product out of the facility.

Private Warehouse: Facility designed to meet the needs of its owner.

Public Warehouse: Storage and handling facilities to any individual or company that will pay for its use.

Distribution Center: Warehouse designed to speed delivery of goods and to minimize storage costs.

[CC BY 4.0] UNLESS OTHERWISE NOTED | IMAGES: LICENSED AND USED ACCORDING TO TERMS OF SUBSCRIPTION