Air Transport

AIR TRANSPORT
Air transport has the highest speed compared to any other transport .
Operating cost are highest but fixed cost are lower than rail or road.

Air transport are highly reliable during emergency and seasonal demand

ADVANTAGES

Bring closer
Far and new market within reach.
Flexible
Carry both heavy & bulky
Less damage to goods
Minimum handling
High Speed
Fastest mode of transport ,suitable for long distance.
Quick service
Comfortable, efficient & quick transport service

DISADVANTAGES

Restricted Products
Certain items are not allowed

Narrow coverage
Air transport facilities are not available everywhere because
airports are in big cities.

Risky
Because a minor accident may lead to substantial loss.

Very Costly
Costliest mode of transport

Unreliable
Due to the weather condition

Rope way transport

Used for transporting materials in
hilly areas. It connect point of
supply and demand by shortest
route.
ADVANTAGES

DISADVANTAGES

Transports bulk material over short

distance

Limited scope of operation because

it can function only on hilly area

Lower capital cost

Its slow mode of transport

Its ideal for hilly area

Does not pollute the environment

Transport formats

Common Carrier

Private carriers

Contract carrier

Exempt carrier

Common Carrier
Basic foundation of public transportation is common
carrier.
Offer service at non-discriminatory price to public

Contract carrier
Provides transport services for select customers.
Agreement between a carrier and a shipper for a specified transportation service

Private carriers
A firm providing its own transportation.

Its not for hire, not carry hazardous goods and takes care of employee safety, vehicle
safety

Exempt carrier

It does not follow economic regulation

Exempt commodities include unprocessed agricultural products and extracted

raw material.

Factors influencing transportation cost and

pricing
Product related

Market related

Product related factors

Density

Refers to weight and space aspects

Weight and space are important

Stowability
Product dimensions
Items with rectangular shapes

Handling

Equipments required for loading or unloading

Liability

products are prone to damage

Market related factors

Location
Govt regulation
transportation

Cost associated with transportation

Insurance

Movement cost
Cost of fuel
to drive the
vehicle

Inventory costs

Inventory
holding cost,
Longer the
inventory =
Larger cost

Packaging

Obsolescence
Transit time is
larger the
inventory
becomes
waste, when it
arrives

Its dependant
on mode
selected as
bad road
condition
needs strong
packaging.

Cost
proportion
al to risk
of damage
and loss
in transit

Freight rate structure

These are transportation rates charged by carriers for shipping

the goods to buyers.
Principles of freight rate

Should cover all cost of transportation

Vehicle utilization
Terminal detention
Nature of goods
Density, Consignment
Stowability

Public use
Govt policy

TRANSPORT INFRASTRUCTURE

For transportation, strong infrastructure is primary

Elements of transportation infrastructure

Terminal
Facility

Well
maintained
loading and
unloading
facilities ,
platforms,
railway road

Vehicles

Their size,
shape and
speed

Right of Way

Passage for
vehicle
should be in
good
condition

Prime
movers

Carrier org
These are the
transportation
service providers in
business,
TRANSPORTATION=
BUISNESS

Transportation Hidden Cost

Transportation of raw materials, project materials and
equipment include 20-30% of total capital cost.
In India, entrepreneurs get incentives set up
manufacturing facilities in rural area but they lack
infrastructure.
Eg:-Vehicles get stuck in muddy road- materials doesn't
reach to site, vehicle accidents these increase
transportation cost.
Delays- non receipt of equipment, machinery, raw
materials-delays run into months.

Due to such delays the project suffer heavy loss

SELECTION OF MODE OF TRANSPORTATION

Characteristic of goods
Goods are expensive
then fastest mode of
transportation
Depending upon the
nature of goods

Cost
Before selection a
mode of transport the
cost factor is imp

Delivery time
Availability
Satisfy customers the
goods should be available,
mode of transportation accessible

Details on delivery
such as schedule
delivery time, date of
delivery etc
Frequency

Distance
Depends on the distance. Short
distance= road way, long=sea or
air way

Selecting mode of transport its service

frequency should be analyzed ,no. of
times the carrier go to and fro
towards source and destination