chapter 7 - transportations

Transportation

TRANSPORTATION

Introduction

Transportation is critical to the distribution of the material from the sources to the production sites and from these sites to and within the market centers.

Legal forms of transportation

Public (for hire) carriers

Common carriers

Carriers in this legal classification are available to all users:

·         Publishes rates and chargers

·         Operates all modes all of transportation

·         Assumes fairly intensive economic and safety regulation.

Contract carriers

Carriers in this legal classification perform selected transportation functions:

·         Offers a specialized service in terms of equipment and/or products

·         Restricts service to a limited number shippers

·         Receive a permit from a regulatory body in order to operate

·         Assumes only modest economic regulation but fairly intensive safety regulation.

Exempt carriers

Transportations companies in this classification primarily move unprocessed products. Exempt carriers are exempt from economic restriction by regulatory bodies.

·         Requires no economic regulation

·         Can enter or exit the market freely

·         Negotiates its own rates and can discriminate

·         Assumes no obligations to provide regular service.

Private carriers

Carriers in this classification are operated by the producer or distribution of the cargo.

·         Provides transportation service only for the firm

·         Requires no economic regulation

·         Transports only goods that are incidental to the primary business of the firm

·         Enjoys geographical flexibility and latitude in serving customers

Public carriers versus private carriers

Public (for hire) carriers

·         Expert

·         Well defined duties and responsibilities

·         Shipper protection

·         Assumption by the carrier of operating and transportation management problems.

Private carriage

·         Improved scheduling

·         Greater control

·         Flexibility  in operations

·         Reduced loss and damage

·         Transportation rates

·         Use equipment for advertising purposes

Auxiliary users

·         Freight forwarders

·         Shippers’ associations

·         Third party providers

Transfers facilities

·         Packaged freight terminals

·         Container terminals

·         Bulk commodity terminals

·         Carrier equipment transfer facilities