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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TRANSPORTATION
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