An organisation can have the best products in the world, the most efficient business processes, the most professional management team, the most effective advertising and the best pricing strategy but, if the product does not arrive where and when it is needed by the customer, the business will eventually come to an end.
Transportation provides place and time utility. In other words, it gets the product to the place where it is needed and at the time when it is needed by the customer.
Transportation comes in many shapes and forms, for example:
Container ships transport goods from one part of the world to another
Goods arrive by air in jets and aeroplanes
Bulk products arrive by rail on tracks that stretch to every corner of the South African landscape
Products of every description move by road in a variety of vehicles, such as tucks, vans, motorcars, motorcycles and even bicycles
products such as fuel are transported by fuel tankers and even by pipelines that are situated underground.
Most of the time we take transportation for granted. For example, we forget that an item of clothing that we purchase may have travelled a long way in order to reach the retailer. The fish we eat was possibly caught hundreds of kilometres from the shoreline, and the Argentinean beef and New Zealand lamb that we enjoy had to be
transported in specially designed refrigerated containers over many thousands of kilometres.
As effective transportation is an essential element of the supply chain for both inbound and outbound logistics, an understanding of the subject will give you a better
understanding of its contribution to the organisation in general, and the supply chain in particular.
It is impossible for any industrialised country (or any country, for that matter) to exist without an effective and efficient system of transportation. Transport is needed to take people to work, school, and play and to ship raw materials and components to factories, so that they may be converted to finished goods. Finished goods need to be transported to retailers and distributors in order to reach consumers. In some cases, the finished goods must be transported to other companies, where they are used to create other goods. The need for a reliable transport system is boundless and, if we did not have an efficient system of carriage, we would not be able to operate effectively as a society.
The importance of transportation to the economy is enormous. During 1999, transportation expenditure in South Africa constituted almost 6% of the total gross domestic product (GDP). The transport services industry plays a vital role in economic development, and generates over 10% of the country’s GDP, which amounts to over R75 billion.
Over 150 000 people are employed in the road, rail, sea and air sectors, which illustrates the importance of transport in terms of employment and the upliftment of people. However, transport is more than just a statistic. It is universally accepted that transportation has played a dominant role in the economic development of the world.
Without a well-developed and managed transport system, production and consumption would not be on the scale it is today.