Basic Concepts in TransportationPart Seven

Marketing Logistics

Other Economics of Transportation

Other Economics of Transportation

• Derived demand.

Other Economics of Transportation

• Derived demand.• Landed cost.

Other Economics of Transportation

• Derived demand.• Landed cost.

– Cost of product plus its transportation costs.

Other Economics of Transportation

• Derived demand.• Landed cost.

– Cost of product plus its transportation costs.– If a product shipped all the way from China

costs less than a product made in our city, it has a competitive landed cost.

Service Components of Freight Demand.

Service Components of Freight Demand.

• Transit time

Service Components of Freight Demand.

• Transit time– The longer the transit time, the higher the

inventory levels and inventory carrying costs.

Service Components of Freight Demand.

• Transit time– The longer the transit time, the higher the

inventory levels and inventory carrying costs.– The longer the transit time, the greater the

chance of stockouts.

Service Components of Freight Demand.

• Transit time– The longer the transit time, the higher the

inventory levels and inventory carrying costs.– The longer the transit time, the greater the

chance of stockouts.• Reliability

Service Components of Freight Demand.

• Transit time– The longer the transit time, the higher the

inventory levels and inventory carrying costs.– The longer the transit time, the greater the

chance of stockouts.• Reliability

– Reliability affects modal and carrier demand.

Service Components of Freight Demand.

• Transit time– The longer the transit time, the higher the

inventory levels and inventory carrying costs.– The longer the transit time, the greater the

chance of stockouts.• Reliability

– Reliability affects modal and carrier demand.• Accessibility.

Service Components of Freight Demand.

• Transit time– The longer the transit time, the higher the

inventory levels and inventory carrying costs.– The longer the transit time, the greater the

chance of stockouts.• Reliability

– Reliability affects modal and carrier demand.• Accessibility.

– Motor carrier advantage.

Service Components of Freight Demand.

• Transit time– The longer the transit time, the higher the inventory

levels and inventory carrying costs.– The longer the transit time, the greater the chance of

stockouts.• Reliability

– Reliability affects modal and carrier demand.• Accessibility.

– Motor carrier advantage.• Capability.

Service Components of Freight Demand.

• Transit time– The longer the transit time, the higher the inventory

levels and inventory carrying costs.– The longer the transit time, the greater the chance of

stockouts.• Reliability

– Reliability affects modal and carrier demand.• Accessibility.

– Motor carrier advantage.• Capability.

– Refrigerated equipment.

Service Components of Freight Demand.

• Transit time– The longer the transit time, the higher the inventory levels and

inventory carrying costs.– The longer the transit time, the greater the chance of stockouts.

• Reliability– Reliability affects modal and carrier demand.

• Accessibility.– Motor carrier advantage.

• Capability.– Refrigerated equipment.

• Security.

End of Program

Go to Part Eight.