Global Transport and Logistics

Transport and logistics from around the world.

Category: logistics

Transport Demand and Supply

There are five (5) transport modes and main purpose of each of them is to give support to mobility. This explains why mobility is important in our daily activities. Mobility and transport infrastructure are closely related; hence, without mobility, transport infrastructure will be useless and without transport infrastructure; mobility will be difficult if not possible. However, this interdependency between mobility and transport infrastructure is associated to two (2) concepts in transport which are transport demand and supply.

Transportation can be referred to as a market that involves two parties which are: the suppliers of transport services and the users of these services, therefore, the demand and the supply of transport is inevitable in transport market.

In addition, for transport market to function very well, transport demand must be met, so as to satisfy transport needs for mobility. In transportation market, transport companies or individual transport provider offers transport services to transport users who require such services, often on open markets. Nevertheless, the transport users pay for the services delivered according to the journey of the agreed contract.

What is transport demand? Transport demand occurs when a transport user is willing and able to pay a transport fare or particular amount of money based on the two parties’ agreement for a specific transport service. It is also refers to how much of a transport service is desired by transport users at various transport fares (price). Nevertheless, transport demand can be measured in numbers of journey made.

Factors influencing transport demand

Movement of people and good occur for different reasons at different times. There are several factors that influence the demand for transport mode such factors can be grouped into three (3) categories; they are:

  1. Personal characteristics
  2. Trip characteristics
  3. Transport system

Personal characteristics

Transport demand can be influenced by demographic group of people such as age, old, gender etc. It also includes socio-economics, personal reference and so on.

Trip characteristics

Transport demand can be influenced by the number of people going to their place of work, people visiting tourist and recreation centers; education; shopping and so on, are all factors that can affect the demand for transportation.

Transport system

Transportation system is another factor that can influence transport demand. This include available travel routes, available transport mode, road and transit network, cost of travel, transport fare, travel condition, auto operating cost, reliability of service, to mention but a few.

What is Transport Supply?

Transport supply is the amount of transport services a transport company or individual transport provider is able to provide at a particular given time and on agreed fare (cost).

Factors influencing transport supply

  1. Types and characteristics of goods

The bulk, the weight and the value of goods may determine the mode and kind of transport needed for particular goods.

  1. The Cost of freight
  2. The origin and destination of goods and available transport
  3. The distance of the journey: e.g. Inter-regional, Trans Ocean, Continent etc.
  4. Urgency and reliability of delivery, convenience, efficiency of travel, including modal transfer.

In conclusion, it is important to note that transport system behavior is always according to transport demand and supply that can be influenced by cost variation.



Freight Management

Freight management is the management of a company’s freight. It is a management system that specializes in movement of freight or goods from one place to another.

Freight management can be carried out in both international level and domestic level. It is international when goods are moved from one country to another country and it is domestic when goods are moved from one place to another within the same country.

Any freight management company relies majorly on transport to carry out their businesses. In freight management, proper decision must be taken in order to determine the mode of transport that is appropriate for a particular freight. However, there are 3 factors that must be considered before a freight management department or company decides on a types of mode needed for a particular freight. The factors are:-

  1. Time factor
  2. Cost factor
  • Product factor

It is important to note that freight management cost is used to save business time and money in the entire freight operations. It is possible that transportation alone may account for almost 50% of an average company’s cost if not properly checked. This explains why freight management is important to an organization; it helps to keep freight cost lower for an organization which directly affects the bottom line and the price paid by all customers for a particular goods or supply.

In fact, freight management appears to be a strategic system an organization needs to optimize the efficiency of freight and commercial transport.

Benefits of freight management

The benefits of freight management to an organization cannot be overemphasized. Such benefits among others include:

  • It enables the organization to increase profitability.
  • It enables the organization to increase production.
  • It gives administrative support to an organization
  • It gives better inventory management; lower inventory level and reduce carrying costs.
  • It improves on-time delivery.
  • Proper material handling; less damage and supports efficient receiving.
  • It gives immediate notification of any disruption.
  • It gives customers satisfaction.
  • It improves the company reliability.
  • It uses mode of transport more efficiently with economic value and goals in view.
  • It protects the good from damage during transportation.

However, poor management of company’s product or goods brings a great loss to the organization. I have seen many products of an organization that suffered heavy damage in transits due to poor transportation and bad road. Proper freight management will definitely reduce this high risk because success of freight management is linked to the efficient use of transportation. Nonetheless, since the essence of freight management is to increase efficiency, reliability and to minimize freight cost. Hence, it will not be understatement to say that freight management is inevitable to any manufacturing company.


The responsibilities of a logistics firm

Logistics plays an important role in the growth of industry. Here are its responsibilities.

  1. Order fulfillment: – This has to do with completing the orders of prospective customer in a short period of time. Indeed, transportation and logistics would be any integral part of completing the order since they directly impact delivery.
  2. Traffic and Transportation: – It manages the inbound and outbound movement of goods.
  3. Warehousing and Storage: – A number of ware housing decisions directly impact logistics and transportation. For example, how many warehouses are needed? Where should they be located? How large should they be? How much inventory should each accommodate? These and more are what a logistics firm does in order to provide efficient storage facilities to it various customers.
  4. Industrial Packaging; – Transportation directly determines the type of packaging needed. However, logistics firm plans the exact method of how each type of product will be transferred from one place to another and store properly in the shelf and making space for the new stock.
  5. Purchasing: – When purchase is made the distance and the quantities purchased directly affect the transportation cost hence, logistics are highly integrated.
  6. Demand forecast: – Accurate and reliable fore casting is essential for effective inventory control.
  7. Materials handling: – They have best practices to handle materials most especially during transportation so that they are not damaged.8
  8. It plays important role in inventory control for its customers.
  9. It provides customer service. Logistics plays an extremely important role in ensuring that customers get the right products at the place at the right time. Transportation, warehousing, forecasting, inventory control and so on, have a direct impact on customer’s satisfaction.


Major Aspect of a Logistics Firm

There are two aspects of logistics that are considered as the most important part of logistics. They make logistics firm more meaningful and efficient in its operations. These most apparent aspects are warehousing and transportation.

Warehousing and Storage

Warehousing is defined as the storage of goods, raw materials, semi-finished goods and finished goods. This includes wide spectrum of facilities and locations that provide warehousing. It is a point in logistics system when goods are stored on certain amount and for different reasons till the time they are needed. This is a point where a logistics company is different from a transport or haulage company. A logistics firm provides transport services and storage facility for its customers. Unlike transport firm which is only dominant in transport service. A logistics firm without a storage facility is meaningless. Such a firm will not attract prospective customers hence; it will be difficult for such firm to survive in a competitive environment.


Transportation involves the physical movement or flow of goods from one area to the other. In logistics the transportation system is the physical links that connects customers, raw materials, suppliers, plants, warehouses, and channel members. Without this link which is transportation, logistics firm will not be effective. It is an integral part of logistics. If a logistics firm must be efficient enough then transport system cannot be separated from it. Transport plays an important role in logistics operations. Therefore, it is inevitable link in logistics.


Can your customers really rely on your company’s products when needed?

Major reasons why some companies collapse are due to inadequate storage facilities and inadequate supply to meet customers’ needs. Engaging a logistics firm is a vital solution to end these problems.

Logistics is an important aspect that keeps organization going. It helps the organization to store the materials required for production and supply it afterwards, when needed for production process. It also, provides storage facilities for the organization to store its products. More also, it may help the organization to supply its finished goods to their various customers. Nevertheless, it keeps a detailed list of all the items in stock for the organization.

It may also, provides inventory control service to the organization by supervising the supply and storage and ensuring accessibility of items in order to insure an adequate supply without excessive supply. It also, gives a detail report of inventory to the organization for decision making

Logistics definitions

Logistics is concerned with the management of the movement (i.e. transportation) and storage of organization materials and finished goods or inventory.

According to the council of supply chain management professionals (CSCMP) defined logistics management as that part of supply efficient, effective, forward and reverse flow and storage of goods, services and related information between the point of origin and the point of consumption in order to meet customer requirements.

In a simple language, logistics means having the right thing at the right place and at the right time.

   Logistics objectives

An objective of a logistics firm is to deliver finished inventory and materials assortments, in a correct quantity and in a usable condition when required to the right location where they are needed and more importantly, at the lowest total cost.  

Logistics classifications

However, according to Coyle, Bardi and Lanley they classified logistics into four (4) subdivisions which are:

  • Business logistics.
  • Military logistics.
  • Event logistics and
  • Service logistics.


Business logistics: This is well defined in the definition given by the council of supply chain management professionals (CSCMP). However, it can also, be defined as a business planning framework for the management of materials service, information, communication and capital flow. It includes the increase complex information and control system required in today’s business environment. (Logistics Partners Linki; Pl 1996).             

Military logistics: This refers to all that is necessary to support the operational capability of military forces and their equipment in order to ensure the readiness, reliability and efficiency.

Event logistics: Management of all involved activities, facilities and personnel by organizing, scheduling and deploying the resources necessary to ensure the occurrence of an event and efficient withdrawal afterwards. Event logistics ensure that a program is well planned and enjoy by all participants.

Service logistics: Acquisition, scheduling and management of facilities personnel and materials needed to support and sustain a service operation.

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