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INTRODUCTION Since logistics advanced from 1950s, there were numerous researches focused on this area in different applications.

Due to the trend of nationalisation and globalisation in recent decades, the importance of logistics management has been growing in various areas. For industries, logistics helps to optimise the existing production and distribution processes based on the same resources through management techniques for promoting the efficiency and competitiveness of enterprises. The key element in a logistics chain is transportation system, which joints the separated activities. Transportation occupies one-third of the amount in the logistics costs and transportation systems influence the performance of logistics system hugely. Transporting is required in the whole production procedures, from manufacturing to delivery to the final consumers and returns. Only a good coordination between each component would bring the benefits to a maximum. The purpose of this paper is to re-clarify and redefine the position relationship between transportation and logistics systems through collecting and analysing various application cases and practices in logistics from literatures. It is to provide a general framework and expect to be referred for further development and researches. The paper started from introducing the development of logistics and transportrelated sectors based on a historical review. Afterwards it discussed the interrelationships of transportation and logistics. It expresses the benefits that transportation brings to logistics activities and vice versa. For instance the increase of the efficiency of logistics also would bestead to release traffic load in the urban areas. Furthermore, some major logistics activities and concepts were also discussed in this paper. It especially presents City Logistics independently due to it is considered as a main tendency and an available method of future integration of transport and logistics in the urban areas. Finally, this paper will discuss and conclude the potential further development of logistics systems.

ROLE OF TRANSPORTATION The operation of transportation determines the efficiency of moving products. The progress in techniques and management principles improves the moving load, delivery speed, service quality, operation costs, the usage of facilities and energy saving. Transportation takes a crucial part in the manipulation of logistic. Reviewing the current condition, a strong system needs a clear frame of logistics and a proper transport implements and techniques to link the producing procedures. The objective of the paper is to define the role of transportation in logistics for the reference of further improvement. The research was undertaken to assist logistics managers, researchers and transportation planners to define and comprehend the basic views of logistics and its various applications and the relationships between logistics and transportation.

FUNCTIONS OF TRANSPORTATION Product movement: To move various types of product whether it is raw materials component, semi- finished goods, finished goods, packaging material, scrap and so on. Transportation has become a very essential. In fact if human beings are considered as a product. One can be amount of people transport from one place to another by private and public carriers. Transportation of a product involves the use of temporal resources. This is because a particular product is inaccessible while it is in-transit. i.e while it is being transport from one place to another place. These products are called in-transit inventories. These products are significantly important because they influence a variety of supply chain decision. For e.g, if supply chain is a considering a just in time strategy, or say. quick response strategy with regard to supply of goods to the customer then this influences the time for which the goods should be in transit because the goods have to reach quickly, or just in time to meet the requirement of the customer. Further, if goods are dispatched only when a customers requires them. Then such decision also affects the amount of inventories that have to be stored at the distribution centres. Transportation of product involves the use of financial resources. Expenses on transport result from cost of driver, cleaner, casual labourer, taxes, administrative costs, and repairs/ maintenance. In addition, if during transportation there is product loss or product damage, may be this expenses have also to be taken into consideration. Transportations of product also use environmental resources. Either directly or indirectly. In direct terms, transportation uses a very large amount of energy in term of fuel and oil. Though attempts are being made to make transport vehicles more fuel efficient. But consumption of fuel and oil is not expected to decrease because of the ever-increasing global operation in indirect term, transportation create environmental expenses in terms of congestion, air pollution, and noise pollution.

Product storage though it is not very common, but one of the functions of transportation is also temporary storage of goods. Of course, storing goods in vehicles is quite an expensive affair. However, in case of goods have to be moved once again within just a few days. It is advisable to keep them stored in transport vehicles themselves. this will avoid the cost of unloading and loading as well as the possible damage to goods during such a operation. It may happen that a company has limited storage facility at a particular warehouse. Hence, when the company loads the goods in to the transport vehicle to be sent to the warehouse. It may request the transport company to take a longer route to reach the destination. This will act as temporary storage for the goods.

BASIC MODE OF TRANSPORTATION 1) RAILWAY Railways are primarily long-distance, large volume movers of low volume high density goods. Railways, which fall within the group of business undertakings labelled as natural monopolies require a large investment in terminals equipment and track age to begin operation. Todays railway industry is changing considerably in response to the economy, deregulation and the logistic approach to business. It is imperative for railways to improve service and to integrate with other modes. The Indian railways is the monopoly carrier of this mode of transportation in India. The rail network in India consists of broad gage and meter gage railway tracks with the broad gage catering to almost all of the freight traffic. Advantages of Railways 1. The major advantage that the railway offers is the efficient transportation of larger loads over long distances 2. The variable cost per ton-mile of transportation is lower for railways as compare s to other modes of transportation. 3. The availability in terms of service frequency to all categories of shippers . 4. The physical capability of transporting all types of commodities. 5. Railways also offer more reliable and safe transportation under all weather conditions as compare to other modes of transportation 6. Traditionally railways have been the most economical mode of transportation for low value high density and high volume products and hence the preferred mode for inbound logistical movements for firms. 7. the utilisation of standardise containers which can be easily transferred to and from other transportation vehicles have facilitated intermodal transportation along with railways. Utilisation of container on flatcar (COFC), Trailer on flat car and double stack railcars have help improve the performance of railways.

Disadvantages of railways 1. Railway incur higher fixed cost due to requirement of infrastructure like railway tracks, specialized equipments and terminals. 2. Low accessibility, the inability to service areas where railway tracks are not present. However, this short coming can be overcome by multimodal transportation, for example, in combination with roadways.

3. Slow speed due to consolidation of rail wagon into complete train units for a particular route, and breaking out of rail wagons that have reached their destination or have to be transferred to other trains for different routes. 4. The packaging costs for railway is higher due to the impact experienced by goods during the coupling of the rail cars. 5. In India, metre gauge routes remain underutilized due to the problem of transfer of loads from broad to metre gauge routes being uneconomical

2) ROADWAYS/MOTOR CARRIER Motor carriers very much the part of any firms logistics supply chain; almost every logistics operation utilizes the motor truck, from the smallest pickup truck to largest trailer combination, in some capacity. The motor carrier industry, unlike railroad industry, consists of for-hire and private carriers. Private motor carriers transport freight that is owned by the firm that owns/leases and operates the trucks. The motor carrier industry is characterised by a large number of small carriers. The large number of carriers is due in part to the low capital that entering the trucking business requires. High variable cost and low fixed cost characterized the cost structure. The motor carrier does not require extensive terminal and equipment investment and does not invest in its own highway, and the carrier pays for highway use through fees such as use of taxes licencing charges. These variable expenses contribute to the high variety cost structure. Motors carriers are classified in manner as truckload and less than truck load. Less than truck load carrier accept small packages of shipment where truckload carrier accepts shipment of full truckload size. ADVANTAGES OF ROADWAYS 1.road transportation offers advantages of speed, door-to-door flexibility and widespread geographic coverage. 2. the major advantage of motor transport over the modes is its inherent ability to provide service to any location. 3. the large number of motor carriers suggest a high availability. For example,many more motor carriers than railroad facilities are available in an area. 4. motor carriers do not need to consolidate wagons together or decouple wagons at various locations on the route as it in railway transport it speeds up the transportation. 5. motor carriers used in road transportation have lower fixed capital costs as compared to other modes of transportation.

6. due to the lower entry costs of capital, this mode of transportation is characterized by competition and high availability. 7.the packaging requirements for motor carriers are less strigent than required for railway or air. 8. the characteristics of road transportation make it suitable for high value small shipments over short distances. 9 road transportation enables firms to reduce inventory carrying cost because of the facility of small shipments and improvement in customer service level due to the speed of transportation.

DISADVANTAGE OF ROADWAYS 1.Roadways have higher variable costs of fuel, driver, tyres and other components, repairs, taxes, and toll charges for right of way usages. 2.because of higher variable cost, motor carrier rates are the second highest among all mades of transportation after air. 3.the relatively high cost of using a motor carrier suggests that commodities moved by truck must be of value high enough to sustain the transportation costs. 4.motor carriers are affected by adverse weather or traffic conditions. This affect their reliability. 5. although motor carriers can cary almost anything, tey are subject to gross weight and lenghth restrictions. 6.the physical and legal constraints on carrying capacity make motor transport suitable for small shipments.

3) WATER CARRIERS Water carriers are primarily long-distance movers of low value high density cargoes that mechanical device easily loads and unloads. This type of transportation is used for low value to weight relationship products and commodities like minerals, chemicals, cement, and agricultural. Wqater carriers compete heavily with railroads along certain routes andwith pipeline for movement of products like petroleum. Routes can be internal waterways, coastal waterways and international shipping routes. In india it is limited to coastal and international routes. Water carriers are classified as private or for-hire, domestic, international and trumps or liners. Advantages of WATER CARRIERS

1.water transportation offers advantage of low cost for bulk shipment. 2.the cost of water transportation is lowest amongst all mode of transportation. 3.it has capacity to move very large shipment. 4.water transportation is most advantageous for commodities with low value to weight ratio. 5.the water transport requires only the entry capital necessary for equipment.

Disadvantage of water transportation 1.slow speed of transportation. 2.limited range of availability near the waterways. 3.weather conditions and low water level disrupt services. 4. water carriers are unreliable compared to other modes of transport and suffers from high degree of variability in delivery shedules. 5.they depend upon other modes of door to door delivery.

4) PIPELINES Pipelines are used for the transportation of fluids and slurries including the water and sewage. The products generally transported are petroleum products, natural gases and chemicals, pipelines can either be privately owned by users or available for hire. In India however most of the pipelines are owned by public sector for distributing their products; although, some pipelines in a joint sector and the private sector are coming through. Pipelines have the highest investment cost or fixed costs amongst all the transportation modes. Advantages of Pipeline 1.pipelines have the basic advantage of being available all the time including during the adverse weather conditions. 2.pipelines also provide the benefit of transportation of very large quantities in a single continuous shipment. 3.due to protection provided by the pipeline throughout the route, losses, deterioration and pilferage of the products are avoided. 4.it is the most dependable way of transport. 5.weather conditions do not disrupt pipeline service.

6.Low cost, as compared with other modes is the major advantage of using oil pipelines.

Disadvantages of Pipelines 1.geographic accessibility to pipeline is limited to the routes. 2.pipelines transportation is not suitable for general commodity transportation. 3.the speed of transportation through pipelines is quite slow resulting in long transit times. Basic Modes Of Transportation5) Airway : Air transport provides the fastest means of transportation amongst all the available modes. While the high cost of transportation is disadvantage, set-off is possible when one takes into consideration the savings in inventory cost due to the speed of inventory transfer, as also, warehousing and packaging costs. Weather disturbances can affect the reliability of air transport. The fixed costs of air transport is lowest as compared to the other modes save for road transportation; whereas the high operating costs of fuel, labour, maintenance & other facilities creates the high total costs for air transportation.

High value products, critical maintenance and project components, highly perishable items, and urgent delivery shipments dominate in the use of air transportation. Small volume items and packages having high value to weight relationship for long distance transportation are most suited for utilizing this mode. International freight traffic is dominated by air along with water transportation. Passenger aircraft with cargo holds and all-cargo aircraft are utilized for freight movements.

6) Multimodal or Intermodal : Multimodal or intermodal transportation refers to the combining of two or more modes of transportation services linking two nodal locations. The basic reason for considering intermodal transportation is the limited accessibility of rail, water, pipeline & air modes. This necessitates use of multiple modes of transportation between the source node and destination node locations. Most combination includes road carriers due to door-to-door accessibility offered by this mode. The combined use of transportation modes also offers combination of the advantages and minimization of disadvantages of the individual modes utilized. For example, the combination of rail and road transportation may provide the long distance

economy of rail and high accessibility of road together. Also, a combination of rail and water could yield the speed benefit of rail along with the lower cost of water transportation while affording the bulk carrying capability of both. One of the problems in intermodal transportation is the transfer of cargo from one mode to the other which is a cost and time consuming activity. One solution to this has been containerization.

The use of containers has facilitated intermodal freight movements. Containers are protective enclosures in which goods are stored during transit. The container facilitates handling and provides a measure of protection to its contents. Once the material to be transported is placed in the containers, the material itself is not handled until it is unloaded from the container at the destination. Containers are easily transferred from one mode of transportation to another by the use of material handling equipment without affecting the material inside. This reduces the risks of damage and material pilferage. Intermodal transportation also involves the use of coordinated systems known as bridges. Land bridges begin by shipping product across water, transferring the shipment to surface transportation, and then finishing the move across water, thus providing a land bridge between two water movements. For example, a container may be loaded onto an oceangoing vessel in Dubai and shipped across the ocean to India. At Nhava Sheva Port the container would be placed on a railcar and shipped to Chennai. At Chennai, the container is then reloaded on an oceangoing vehicle for transportation to Port Blair. Land bridges can reduce the total transit time of a shipment, a major reason for the increase in their use. Transportation by oceangoing vehicle around a large landmass can take days or even weeks. A land bridge simply creates a shortcut across the landmass. A mini-bridge is similar to a land bridge. Where land bridges involve only water-land-water movements, mini-bridges involve only water-land move. For example a container loaded in Malaysia would by ocean to Chennai port where it is loaded on a flatcar to its destination in Mumbai. A micro-bridge involves a non-port city as either the origin or the destination of the shipment. For example, a shipment that originates in Lucknow , would be placed on a railcar bound for a port city. Once the product arrives at the port city, it is loaded onto an oceangoing vessel and shipped to its final destination.

TRANSPORTATION COST STRUCTURE Four basics associated with transportation:(1)fixed cost ,(2)variable cost,(3)joint cost, (4)common cost FIXED COST: A fixed cost does vary with a change in output ,at least for the period under consideration .In other words , certain cost are constant regardless of the firm activities. For example capital invested in railroad tracks , airplanes , or tractors. VARIABLE COST: A variable cost changes as output changes . If a tractor is driven more miles certain cost increases proportionately. Fuel cost , wages , maintenance cost and tire replacement depends on output. As miles increase so do these cost . To determine if a cost is variable, consider what happens if the operation shuts down. The cost that disappear are variable cost and those that continues are fixed . All the cost in long run are variable . High variable cost increase as volume increase , while fixed cost doses not . High fixed cost carries seek volume to spread the fixed cost over more units, greatly increasing profits. JOINT COST: A joint cost occurs when the production of one product or service requires or offers the production of another product or service . For example , a railroad moves goods from Pune to Kolkata. It now has engines available in Kolkata to provide back-haul service to Pune or additional transportion from kolkata . The cost of placing the train in Kolkata is joint cost with the pune to Kolkata run and whatever run follows it. Fixed and variable cost can also be joint cost. All modes incur joint cost to some extent. COMMON COST: A common cost cannot be directly associated with a product or a activity. Since this creates confusion we normally assign activities percentages of this common cost. For instance a trailer travelling from Amritsar to Chennai with three shipment breaks down and requires Rs.50000 in repair .how much of this repair cost should be allocated to the three different shipment ? Is it based on space used , weight , or both? That is the problem with the common cost! In transportation, common costs are significant and are found in all mode.

LEGAL CLASSIFICATION OF CARRIERS Another frequently used grouping is related to the legal definition of the operating rights that govern each carrier. The four basic legal types are the common carrier, the contract carrier , the private carrier and the exempt carrier. Each type may exist within any of the basic transportation mode. Common carriers: The common carrier is the most frequently employed legal category for transportation resources. A common carrier is a firm that transports for revenue at any time and to any place within its operating jurisdiction. They are required to publish all rates charged for this service and the rates charged must be the same for the similar service. Common carriers are authorized to offer transport for hire upon receiving a certificate for public convenience and need. Contract Carriers: The contract carrier receives a permit that authorizes the transportation of specific items over the specified routes. It arise from contractual arrangement between two parties; the shipper and the carrier. Contract carriers unlike the common carriers are not required to charge the same rates for equal services. Exempt Carriers: Exempt carriers do not fall under the umbrella of direct regulation with regard to pricing policies and operating rights. But they have to conform to the law of the state in which they operate. The exempt carriers initially transported commodities such as agriculture products to processing centers. Currently exempt carriers support a much larger range of activities . Exemptions may also be granted for specific areas such as withi9n a city and the contiguous commercial areas of activity. Private Carriers : Private carriers originally consisted of transportation resources that are controlled by the firm through owner ship or lease . Now private carriers are also permitted to use owner- operator or other outside sources of vehicles and drivers. Private carriers are restricted in that the materials being shipped must be owned by the firm and the transportation of that material must be incidental to the primary business of the firm.