Page 419 - Foundations of Marketing

386 Part 5 | Distribution Decisions

Transportation Modes
The basic transportation modes for moving physical goods are railroads, trucks, waterways,
airways, and pipelines. Each has distinct advantages. Many companies adopt physical han-
dling procedures that facilitate the use of two or more modes in combination. Table 13.2 gives
more detail on the characteristics of each transportation mode.
Railroads like Union Pacific and Canadian National carry heavy, bulky freight that must
be shipped long distances over land. Railroads commonly haul minerals, sand, lumber, chemi-
cals, and farm products, as well as low-value manufactured goods and automobiles. Many
companies locate factories or warehouses near rail lines for convenient loading and unloading.
Trucks provide the most flexible schedules and routes of all major transportation modes
in the United States because they can go almost anywhere. Because trucks do not have to con-
form to a set schedule and can move goods from factory or warehouse to customer, wherever
there are roads, they are often used in conjunction with other forms of transport that cannot
provide door-to-door deliveries, such as waterways and railroads. Trucks are more expensive
and somewhat more vulnerable to bad weather than trains. They are also subject to size and
weight restrictions on the loads they carry. Trucks are sometimes criticized for higher levels of
freight loss and damage and for delays caused by the rehandling of small shipments.
Waterways are the cheapest method of shipping heavy or low-value, nonperishable
goods. Water carriers offer considerable capacity. Powered by tugboats and towboats, barges
that travel along intracoastal canals, inland rivers, and navigation systems can haul at least
10 times the weight of a rail car, and oceangoing vessels can haul thousands of containers. The
vast majority of international cargo is transported by water at least part of the way. However,
many markets are inaccessible by water transportation and must be supplemented by rail or
truck. Droughts and fl oods also may create diffi culties for users of inland waterway transpor-
tation. Nevertheless, the growing need to transport goods long distances across the globe will
likely increase its use in the future.
Air transportation is the fastest but most expensive form of shipping. It is used most often
for perishable goods, for high-value and low-bulk items, and for products that require quick
delivery over long distances. Some air carriers transport combinations of passengers, freight,
and mail. Despite its expense, air transit can reduce warehousing and packaging costs and
losses from theft and damage, thus helping to lower the aggregate cost of the mode. Although
air transport accounts for a small minority of total cargo carried, it is an important form of

Table 13.2 Characteristics and Ratings of Transportation Modes by Selection Criteria

Selection Criteria Railroads Trucks Pipelines Waterways Airplanes
Cost Moderate High Low Very low Very high

Speed Average Fast Slow Very slow Very fast

Dependability Average High High Average High
Load fl exibility High Average Very low Very high Low

Accessibility High Very high Very limited Limited Average

Frequency Low High Very high Very low Average
Products carried Coal, grain, Clothing, Oil, processed Chemicals, Flowers, food (highly
lumber, paper computers, coal, natural bauxite, grain, perishable), technical
and pulp books, groceries gas motor vehicles, instruments, emergency
products, and produce, agricultural parts and equipment,
chemicals livestock implements overnight mail
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