Contents :
  1. Meaning and Definition of Transportation.
  2. Modes or Types of Transportation.
  3. Participants in Transportation
  4. Significance of Transportation
  5. Functions of Transportation.

What is Transportation ?

The main function of transportation is to carry the products to different markets, which may be at different geographical locations. Apart from transporting the goods, the additional values that transportation provides to the customers are providing the products on time, in the quantities demanded, and in the undamaged form. The utility that transportation provides is called 'place utility' and the utility which is created by the storage is regarded as "time utility". Time utility cannot be provided to a customer without the help of transportation activities as the speed and the consistency by which a product is moved from one point to other is determined only by the transportation activities. The activity of transporting something or someone from one point to other or the activities involved in being transported is termed as transportation.

Definition of Transportation :

According to Burkart and Medlik :
"Transportation can be defined as the means to reach the destination and also the means of movement at the destination”.

There are number of elements which can influence the significance of transportation in physical distribution. Transportation plays a crucial role in providing the time and place utility to any product because it impacts the level of customer service provided by the firm; it also influences the other elements of physical distribution and marketing such as inventory control, warehousing, channel management, etc. In many business organizations, one of the vital cost elements is transportation.

Modes of Transportation :

Rail, highways, water, pipeline, and air are the five main modes of transportation. Apart from these the recently emerged forms of transportation are package carrier, ropeways, and inter-modal system. Traffic volume, revenue, system mileage, and the nature of traffic composition are the factors that can be used to determine the comparative significance of each mode. With respect to these measures, each mode of transportation is explained below :

1) Roadways : 
For the agricultural and industrial development of any nation, the most important mode can be seen as the road transport. This method is quite useful in reaching to short and medium distances, even to those places where other modes of transportation do not have their reach. The facility of door-to-door service, which is not possible by other modes, is provided by road transport. In order to bring the trade from the remote and rural areas to the urban and semi-urban areas, road transportation can be used. With the help. of road transportation the basic infrastructure can be built to ensure the connectivity of far-off villages with the rest of the nation. Because of the increased demand and a huge development in industrial and agricultural sector, the significance of road transportation is quite vital for making the product available at the place and time of consumption. In the transport network of the country, the role of road transportation is quite dominant.

2) Railways : 
One of the principal carriers of men and material in the country is railways which plays a very significant role in the trade and commerce activities of the country. It supplies essential commodities. to different locations by transporting across the length and breadth of the country. The industrialization and development of many nations have been carried forward with the help of railways. During the initial phase of industrialization many countries were depending upon the railways as it was the main source of transportation which was available for moving the raw material and finished products from one place to another. Chemicals, heavy material, farm products, automobiles, and also the low value products are transported by railways. They have greater efficiency in case of truckloads which can be shipped at a relatively cheaper price through railways in comparison to smaller modes of transportations. A relatively lesser handling is required in transporting the goods through railways. In order to facilitate easy loading and unloading of material, different firms establish their facilities near to the rail lines.

3) Waterways/Sea : 
In order to ship heavy, non-perishable, and low value goods (such as coal, grain, ore, and petroleum products), the cheapest mode of transportation can be seen as waterways. There is a huge capacity in case of water carriers. Products weighing a minimum of ten times the weight of one rail car can be transported by waterways powered by towboats, tugboats, barges which move in inter coastal canals and inland rivers. In fact the vessels which run in oceans can have thousands of containers. There are a number of markets which are not connected with the waterways without the use of railroad or trucks. The waterway shipping industry is segmented into various parts which are as below :
  • Liner service
  • Tramp shipping
  • Tanker operations
  • Industrial services
Dry bulk carries, container ships, tankers, and special vessels are included in the shipping fleet around the world. In India, approximately 32% of the total GRT (Gross Registered Tonnage) of the shipping fleet is contributed by the dry bulk carriers and 33% of total fleet is accounted by the tankers.

4) Airways : 
Among all the other modes of transport, the least hazardous mode can be considered as the airways. The cost of air transportation is quite high; thus, it is mainly used for the transportation of high valued perishable products with limited life span. The facility of air cargo is mainly concentrated near the gateway airports e.g. Delhi, Mumbai, Kolkata, Chennai, and Bangalore. About 87% of the total air cargo is handled by these airports in India. Anticipating the growing needs of cargo airways and passenger airways, the Government of India is inviting the interested private players in the air transport services and its associated services such as airports.

5) Pipelines : 
The use of pipeline for transportation of petroleum was first done by Samuel Van Syckel in the year 1870 in Pithole, Pennysyivania. The face of transportation was changed after twenty years by Standard Oil Company of North-Western Pennysylvania. The pipeline transportation was first use for transporting the petroleum but its scope is enhanced by using it for transporting many commodities such as coal in slurry form, chemicals, natural gas, iron ore fines in slurry form, etc. Although the initial cost of setting up the network of pipelines is quite high but later it helps in reducing the operating costs. Almost all public and private sector petroleum refineries use the pipelines for the transportation of petroleum products. These can be thought of as the most automated mode of transportation which mainly carries the products of a shipper as it belongs only to a certain shipper. Mainly chemicals or petroleum products are transported by the pipelines. There are numerous environmentalists who have. their concerns regarding the effect of pipeline on the environment such as harm to plants and animals due to installation and leaks.

6) Ropeways : 
Out of the total geographical area of India, over 16% is comprised of hilly locations. The problem of transportation is quite prominent in these locations due to the long circuitous paths. Sometimes, the transportation of essential commodities and other materials is quite vital due to their strategic significance in the defence programs of the nation. Ropeways can be seen as the economical and faster mode of transportation in the hilly areas, especially when the oil shortage is going on. The various merits of ropeways are as follows :
  • Lesser harm to the ecology.
  • Shorter routes can be used to reach to the remote hilly locations.
  • The cost of ropeway transportation is lesser than the other modes.
  • Over short distance, thee transportation of bulky products is quite fast.

7) Package Service : 
The country, in last few decades, has faced a huge problem related to the availability of transportation for small-shipments. Due to the different costs associated with the terminal and line haul operations, the small-shipment service providers charged quite high prices. The providers cannot decrease the prices as different overheads impose certain minimum charges on them irrespective of the size of shipment and the distance of destination. Due to such obstacles, some private companies realized the potential of specialized services for package-service or small-shipment market.

8) Inter-modal Transportation :
Taking the economic advantages of two or more modes of transportation by combining them with each other to facilitate the transportation service at a least possible total cost is known as inter-modal transportation. In order to combine the various modes of transportations, various efforts are carried out over the years. The concept of inter modal transportation is not a new concept, it has originated during the early years of 1920s but in order to control the monopoly practices, different restrictions were imposed on the cooperative practices. During 1950s, this mode started gaining popularity as the advantages of road and rail transportation were combined to for a an inter-modal transportation known as piggy back service. The flexibility of motor or road transport for low distances and the low line-haul cost of rail for longer distances were combined to form this common inter-modal transportation. In order to gain the higher efficiency and effectiveness of transportation, the popularity of inter-modal transportation has increased significantly in recent years.

Participants in Transportation :

Following are the participants that together facilitate the transportation activities :

Participants in Transportation

1) Shipper and Consignee : 
The objective of moving the goods from their origin to their destination within the stipulated time and at the lowest possible expense is shared by both the shipper and the consignee. Certain pick-up time, delivery time, zero loss and damage, precise and prompt information transaction, and predictable transit time should be included in these services.

2) Carrier : 
The intermediary between the consignee and the shipper is known as carrier. Maximizing the revenue from the transaction and minimizing the cost of carrying out the transaction are the main motives of the carrier. Another objective of the carrier is to minimize the cost of moving the product such as labour, fuel, vehicle cost etc. While maximizing the prices being charged from the shipper and consignee. The latter objective is aimed at earning more profits.

3) Government : 
As the transportation has a huge impact on the performance of the economy, it becomes a very crucial factor; thus, government has a higher level of interest in it. In order to maintain a sustainable economic development, a stable and efficient transportation is important. The efficient movement of goods to all the markets is facilitated by the transportation and hence the availability of the product can be ensured at a reasonable price. Some governments participate more actively in different activities and practices associated with transportation. This can be in the form of ownership, regulations, and promotions.

4) Public : 
The main concerns of common public related to the transportation are its cost effectiveness, accessibility, and different safety and environmental standards. The need of transportation facilities is determined primarily due to the public because of the fact that they require different goods at least possible cost at their doorstep. Because of different types of interaction between the above mentioned participants, the relationship is quite complex among them. There can be different types of conflicts which can result among the parties with micro-interest government, and the public. Thus, in order to have a smoother process, some kind of regulations is mandatory.

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Significance of Transportation :

The movement of goods and people from one location to other is known as transportation. There are many reasons such as hospitality, employment, etc., because of which these migrations take place. As the life will be very difficult in the absence of transportation, the main focus should be on the significance of transportation. The significance of transportation can be understood with the help of following points :

1) Availability of Raw Materials : 
The movement of material from one place to another can be done with the help of transportation. In the beginning, the raw material is stored at a certain location, and for the processing and manufacturing of goods, these materials are transferred to some other location.

2) Availability of Goods to the Customer : 
For the purpose of utilization, the goods produced at a certain location are required to be moved to a different location, possibly near the end user. The movement of goods from one place to other can be ensured by the transportation.

3) Helping in Emergencies and Natural Disasters : 
In the event of any natural disaster, transportation helps in a great deal. The different types of supplies and men can be moved quite fast from one place to another.

4) Employment Generation : 
Different types of jobs such as drivers, cabin crew conductors, captains, etc., are created by the transportation services, in fact the individuals also get employment in various infrastructure development activities for transportation such as manufacturing plant and service centres of vehicles. Moreover, with the help of transportation facilities the rural population can travel to urban areas to explore the employment and other development opportunities.

5) Movement of the Labourers : 
For the purpose of employment, different individuals move from one country to other. In these situations, the facility of transportation is quite significant.

6) Unites Nations : 
For the purpose of globalization, transportation is being used in the entire world, i.e., different countries are brought together to made each other aware off different cultural activities and different types of industries. It also facilitates the import and export of goods.

7) Purchasing Decisions :
The various transportation considerations also affect the decision like where to buy and what to buy, irrespective of whether the firm is a wholesaler, retailer, manufacturer, or service provider. Different types of materials which are involved in this can be supplies, raw material, semi-finished goods, finished goods for sale, or the products for re-sale. The decision related to 'what and where' are influenced by the traits of goods, adequacy, transportation cost, and the availability of goods.

8) Location Decisions : 
There are a number of factors behind determining a certain location for the establishment of offices, production units, warehouses, stores, and other business facilities. Some of the factors that influence such decisions are availability, adequacy, and the cost of transportation. The type of transportation service required by the firm will be decided mainly by the core business of the firm. One of the important factors in location decision of new manufacturing facilities will be the distance of unit from the highway.

Functions of Transportation :

The various functions of transportation are discussed below :

Functions of Transportation

1) Movement of Products : 
The fundamental function of transportation is to move the products from one place to another. The upward and downward movements of products in the value chain are facilitated by transportation. Transportation is important for moving the material to the next stage of manufacturing process and also closer to the customer. The material can be in the form of components, assemblies, materials, work-in-progress, finished products.

2) Storage of Products : 
Storing the product in the vehicles for temporary purpose can be seen as another function of transportation. It can be seen as a costly source of storage but it is less expensive than the cost of unloading the material in a warehouse for few days and again loading it. Vehicles are used as temporary storage facility because sometimes the need of storing the in-transit shipment, generally for few days, arises. Another situation where the transportation vehicle can be used as a storage facility is when the space in the warehouse is limited.

3) Economic Utility: 
As per the economic theories, creating place utility (right place) for the products, distributed and produced by the firm, can be seen as the main function of transportation. When the goods are placed where they are to be consumed, it is regarded as place utility. Apart from having the products at the right place, it is also important to have the product at the right time (time utility) and in right form (form utility). Moreover, the products should be owned by or in custody of the person who really wants to consume these products creating 'possession utility'. All the discussed utilities depend the efficiency and effectiveness of transportation.

4) Geographic Specialization : 
When the products are produced in that nation, region, or city which suits best as per the capital, talent, labour, raw material, and other resources of the company, it as regarded as 'geographic specialization'. Some level of economic inefficiency can be resulted when such specialization does not occur. In other words, when a certain region, nation, or city is not able to produce certain products because of its misfit with some of the factors then the extra resources and efforts need to be applied. 
For example, if area A is specialized in product X then it needs to depend on other areas for fulfilling its need of things other than the product A.

5) Large-Scale Production : 
In order to enable the large scale production, any firm will be requiring the collection of different types of raw material, spare parts, equipment, items from number of sources and from number of locations. Similarly, after producing the product it should be distributed to a large geographical market at a reasonable cost. Therefore, transportation is a very crucial element for carrying out a large-scale production.