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The Role of Transportation in Logistics Chain

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The Role of Transportation in Logistics Chain essay

Since logistics advanced from 1950s, there were numerous researches focused on this area in different applications. Due to the trend of nationalisation and globalisation in recent decades, the importance of logistics management has been growing in various areas. For industries, logistics helps to optimise the existing production and distribution processes based on the same resources through management techniques for promoting the efficiency and competitiveness of enterprises. The key element in a logistics chain is transportation system, which joints the separated activities. Transportation occupies one-third of the amount in the logistics costs and transportation system influence the performance of logistics system hugely. Transporting is required in the whole production procedures, from manufacturing to delivery to the final consumers and returns. Only a good coordination between each component would bring the benefits to a maximum.

Overview of Logistic systemLogistics services, information system and infrastructure/resources are the three components of this system and closely linked. The interaction of the three main components in the logistics system is interpreted as follows: Logistics Services support the movement of materials and products from inputs through production to consumers, as well as associated waste disposal and reverse flows. They include activities undertaken in-house by the users of the services (e.g. storage or inventory control at a manufacturer’s plant) and the operations of external service providers. Logistics services comprise physical activities (e.g. transport, storage) as well as non-physical activities (e.g. supply chain design, selection of contractors, freightage negotiations). Most activities of logistics services are bi-direction. Information System include modelling and management of decision making, and more important issues are tracking and tracing. It provides essential data and consultation in each step of the interaction among logistics services and the target stations. Infrastructure comprises human resources, financial resources, packaging materials, warehouses, transport and communications. Most fixed capital is for building those infrastructures. They are concrete foundations and basements within logistics systems.

Interrelationship between Transportation and Logistics

Without well developed transportation systems, logistics could not bring its advantages into full play. Besides, a good transport system in logistic activities could provide better logistics efficiency, reduce operation cost, and promote service quality. The improvement of transportation systems needs the effort from both public and private sectors. A well-operated logistics system could increase both the competitiveness of the government and enterprises

Transport Costs and Goods Characters in Logistics: Transport System is the most important economic activity among the components of business logistics systems.

The Effects of Transportation on Logistics Activities: Transportation plays a connective role among the several steps that result in the conversion of resources into useful goods in the name of the ultimate consumer. It is the planning of all these functions and sub-functions into a system of goods movement in order to minimize cost maximize service to the customers that constitutes the concept of business logistics. The system, once put in place, must be effectively managed.

The Role of Transportation in Services Quality: The role that transportation plays in logistics system is more complex than carrying goods for the proprietors. Its complexity can take effect only through highly quality management. By means of well-handled transport system, goods could be sent to right place ate right time in order to satisfy customer’s demands. It brings efficacy, and also it builds a bridge between producers and consumers. Therefore, transportation is the base of efficiency and economy in business logistics and expands other functions of logistics system. In addition, a good transport system performing in logistics activities brings benefits not only to service quality but also to company competitiveness.

Future Prospectus of Logistics

Facing the worldwide competition, the improvement of logistics system should be advanced by both private companies and government. The main characteristics of future logistics development are: Government Role: To keep competitiveness of industries, the government has to lead the way to assist the logistics industries, the government has to lead the way to assist the logistics industries. For instance, the idea of freight village of city logistics provides the environment to promote efficiency and to reduce operation costs. However, it involves large of investments and some problems relating laws and national policies. Without the lead and support of government, achieving the plan is difficult

Growth of International Goods Transport: The up-growth of international freight transport is contributed by several factors. Firstly, the blossoming of E-commerce pushes ahead the international business activities. Secondly, the change of production strategy needs international cooperation, e.g. importing the semi-finished products from countries with cheaper human resources to those with higher technology to assemble the final goods. Thirdly, the pressure of globalised market, such as World Trade Organization (WTO), pushes local industries to promote themselves to reach an international standard the face the worldwide competition.

Improvement of Services: Providing a good customer service becomes a necessary requirement of business operation with the intense competition of global market. The quality of services is the main factor to affect consuming behaviour among the enterprises with high similarity

Shorter Product Life Cycle: with the current trend, the merchandise design is changing day by day, and therefore, the product life cycle is shorter and shorter, especially in computer science. To confront the impacts, logistics system must improve its efficiency and reliability of goods delivery

Channel Cooperation Between Companies: In order to save the logistics costs, a key concept is to maximize the usage of available transport capacity. Integrating the logistics demand between numerous departments helps achieve this purpose. In practice, a conglomerate could develop its own logistics services for the branches. For some medium size companies, they could cooperate transport channels with others

Specialized Logistics Delivery: One of the notable trends of logistics industries is specialized delivery services. For instance, delivering fresh food from place of origin needs low-temperature containers. Computer chips, gases and petroleum need particular conveyances to carry. These demands are rising since the products became more and more delicate.

Logistics Centres: The development of logistics centres is good for industry promotion and the development of national economic system. Logistics centre could successfully shorten the distance between production and marketing vertically and also integrate various industries horizontally, and thus decrease the costs. Governments can propose special areas for storehouses and logistics to reduce land acquisition. The future logistics will cooperate e-commerce, the Internet and the newly door-to-door service to create new business prospects. Freight Transport: The alliance between middle-small size delivery companies is an important trend in the future. The strategy could help to expand services quality, and meanwhile raise the loads of single trips to reduce delivery costs.


To sum up, logistics and transportation have some relevance. (1) Logistics system has a more and more important position in our society activities. (2) transportation and logistics systems have interdependent relationships that logistics management needs transportation to perform its activities and meanwhile, a successful logistics system could help to improve traffic environment and transportation development. (3) Since transportation contributes the highest cost among the related elements in logistics systems, the improvement of transport efficiency could change the overall performance of a logistics system. (4) Transportation plays an important role in logistics system and its activities appear in various sections of logistics processes. Without the linking of transportation, a powerful logistics strategy cannot bring its capacity into full play.

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