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Transportation is a major element of logistics cost. Generally choice of transportation is linked to inventory decisions by trading of a particular mode transportation cost against inventory holding costs, customer service levels etc.
Shipment by air may be fast and reliable leading to lower provision for safety stock, it is expensive. Again shipping by sea or rail may be comparatively cheaper but the inherent uncertainty with lead times necessitates higher level of buffer stocks.
The customer service levels, geographic location, nature of the product play important role in determining the mode of transportation to be selected.
Transportation is an indicator which measures the economic, social and commercial progress of a country.
Modes of transportation are changing to keep pace with the technological advances across the world. The degree of sophistication in modes of transport equipments vary according to the level of economic condition and growth of particular region.
