Transport Chapter 3 Part 2

• Rail Transport


  Popular form of transporting goods locally and internationally
• Rail Transport


  • Rail is widely connected to many cities and towns but not as extensive as roads
  • Rail is limited to fixed routes (unlike roads where there are alternative routes)
• Rail Transport


  • Rail is a terminal-to-terminal delivery system
  • Not direct to customer
  • Rail does take more time for deliveries
• Rail Transport


  Often load consolidation is required- delays process further i.e. Train needs to be fully loaded before the delivery journey is started. E.g. similar to Taxis
• Strengths of Rail Transport

  • Almost any type of goods can be transported (raw materials; semi-finished goods; finished goods)
  • Large volumes can be transported
  • Less impact on environment (roads; pollution etc.)
  • Not affected by traffic; weather; etc.
• Strengths of Rail Transport

  • Can be more reliable than road and sea
  • Not affected by theft; high jacking etc.
  • Cost and energy efficient for long distances
  • Transporting hazardous products are safer than road transport
• Limitations of Rail transport

  • No point to point. Hence additional distribution services needed
  • High probability of damaged goods
  • Strong packaging is required
  • Packaging cost can be high
  • Pilferage can occur as goods wait to be transited
• When should Rail be used

  1. Well suited to carry raw materials

  2. Large volumes; in bulk at low cost

  3. Where price is more important than delivery time

  4. High value (cars; appliances) products can also be moved via new containers
• Pipeline Transport


  Used mostly for long hauls of liquids; gas; water; etc.
• Strengths of Pipeline transport

  • Good for environment: no noise; air; pollution
  • Low cost
  • Reliable
  • Low risk
• Pipeline transport


  • Although slower -straight delivery to end user/customer
  • Highly accessible. Can be placed in locations that are not easily reached (i.e. places with no roads or rail etc.)
• Limitations of Pipeline transport

  • Not used by retailers or for commercial products generally
  • High investment costs
  • Not good for business with small product volumes
• When should Pipeline transport be used?

  1. Limited to public utility products (as opposed to commercial products)

  2. Like water; gas; oil; etc.

  3. SA uses this mode for petrol and gas products mainly
• Sea Transport


  • Most cost operational-bulk carrying mode of transport
  • Used mainly as an international mode of transport (coal; fuel; grains; fruit; veg; clothing; cars etc.)
  • Important way of transport as demand for energy resources increase
• Strengths of Sea Transport

  • Low cost (economies of scale)
  • Large volumes. E.g. Large ships can carry up too 24000 containers! [A large ship has the size of 4 soccer pitches !!!!]
  • Travel long distances
  • No traffic
  • Usually safe and secure
• Limitations of Sea Transport

  • No door-to-door service (only seaport to seaport)
  • More freight handling required (at each ports)
  • Weather can affect delivery
  • Transport slow and irregular. E.g., Ocean shipping from China to South Africa takes a month, at around 20-26 days
  • Rarely ship hi jackings can occur
• When should Sea transport be used?

  1. Almost any product can be moved by ship

  2. As long as time is not an issue

  3. Business need to make a trade-off between cost and time
• Providers of transport


  • Private (in house) - retailer does its own transport
  • Professional carriers i.e. (retailers outsources to a Second- or Third-party logistics service provider (2PL /3PL)
  • Freight Forwarders
  • Fright Brokers
• Freight Forwarders


  • Are companies that transport goods usually to overseas countries on behalf of other companies
  • They assist in documentation, labelling; packaging, insurance. Etc.
  • FF Takes possession of goods and is thus responsible for goods being shipped
• Freight Brokers


  • FB act as a middleman between a shipper(e.g. retailer) and a transport provider
  • FBs can negotiate deals between shipper and transport provider
  • Key difference is that they FB does not take possession of the goods, i.e. they are not responsible for goods being transported, but rather the transporters are