Strategic logistic management:

Transportation happens to be the most basic part of strategic logistic management. Transport costs include all of costs associated with movement of products from one location to another. The average transport costs range from 5 to 10% of the retail price of the product.

Transportation is the movement of materials, products and services from one area to another, inbound and outbound both. It may also be said as movement from one node of the supply chain to the other. Therefore, in order to effectively manage this transportation system the primary step would be to establish a cost effective transportation mode. In other terms highest customer service in lower price, leads to company growth.

Transportation system contains a strategic bearing on operation of a company. Thus, failure to recognize the best transportation mode may directly affect the growth of a company. Higher transport costs shall raise prices, which will directly affect the customer satisfaction in a negative way. The three factors needed to consider are:

• Customer
• Environment
• Product and Company

Physical movement of goods in any organisations needs different modes of transport services. The suitability of mode based upon the nature of product that ought to be moved. Therefore, in order to recognize the right transport system the following points have to be considered :

• Impact of the transportation system on the supply chain performance,
• Factors finding the selection of transportation mode

• Types of customers
• Types of the product
• The company profile

• Feedback system on the selection of transportation mode, and rectify in case of incorrect selection.
• Foresight, flexibility and integration of available resources in planning stage.

Next we ought to see to what is the factors influence selection of transportation mode?