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ECONOMIC FACTORS

DISTANCE  : Distance  is one of the most basic economic factors which
determines the total transportation cost . It contributes to variable cost  including
labour and fuel cost .

VOLUME : The next important factor is volume of load . Transportation cost per unit
of wt decreases  with increase in the load volume .Its mainly due to fixed admin and
other fixed cost like delivery and picking charges .


DENSITY: The density factor incorporates weight and space aspects ,which is
significant because transportation cost is normally quote in terms of  $ per tonne.
Transportation cost per unit  of weight decreases  with increase in product density .
Hence logistics managers are required to increase the product density ,allowing
more unit  of product to be loaded in container  for better utilisation of space .

STOWABILITY : The stowability factor refers  to product dimensions and how they
affect vehicle space utilisation. Products of odd sizes and shapes waste space
.they cannot be stowed well . Transportation cost  are more in case of odd -shaped
products .

HANDLING : specific handling facilities are required for loading and unloading to
vehicle .If more sophisticated and specific  handling equipment are required then
transport cost goes up . To minimise handling cost now days containers are more
preferred by logistic  managers


LIABILITY: Transportation costs are also affected by the quantum of risk covered by
the carrier during the  transit  of goods from origin to destination .


MARKET FACTORS : Market  factors which affects transportation cost are
availability  of transport ,  emergency of freight movement ,and getting of return
journey laod .


THIRD PARTY LOGISTICS ( 3PL )



Third  party logistics (3PL) is the employment  of outside companies whose
expertise is in handling a firms logistical processes .With increased emphasis on
downsizing and outsourcing  in today's global economy ,many firms  are outsourcing
 logistics  services to 3PL .Use of 3PL has benefited  firms  in terms of
gaining competitive  advantages , expertise to do their job more effectively , better
processes and resources to handle operations and logistics cost savings


The portfolio of logistical provided by 3PL  generally includes inbound and outbound
transportation ,fleet management , warehouse management , order processing
,product returns , carrier selection , logistics information , inventory repelenishment
,order picking , labelling and packaging , distribution , custom clearance and
forwarding , import - export management and customer
service/support   -  
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