https://ecampusontario.pressbooks.

pub/globalvaluechain/chapter/4-2-modes-of-
transportation/
Modes of Transportation
There are many criteria by which the mode of freight transportation will be
chosen. It depends on the distance, value, availability of services, freight rates,
characteristics of goods, budget, cost of transport, reliability, safety, urgency,
carrier timing, etc.
A critical decision for companies is to choose the suitable carrier to transport
Modes of transportation are classified into the following types:
1. Road
2. Rail
3. Air
4. Water
5. Pipeline
Trucking
● the majority of goods are shipped by truck completely or at some point
during the shipping.
● the most flexible of all modes of transportation. I
● it is categorized by “Full Truck Load” (TL) when the entire truck is hired and
delivered directly, or “less-than-truckload” (LTL) which generally includes
integrating orders to increase utilization of the truck.
● The most used mode of transport which allows extended delivery services
for other types of transportation.
● For improving efficiency, profitability, service level, and productivity;
transportation companies cooperate with fellow transportation companies
by creating efficient transport planning, extending portfolio and vehicle
capacity, and strengthening market position in the region - this is called
horizontal cooperation.
Railroads
● a very cost-effective means of transporting goods for long-distance travels
● Goods in containers, or products that are bulky and heavy are ideal for train
transport.
● Compared to trucking, shipping by rail is very energy efficient, and removes
many trucks from congested highways
● e.g. BOMEDCO before (now none) or any sugar producing area, in
manufacturing not so relatable in the Philippines

Airfreight
● For goods that are expensive, small and light, and urgent
● charge by a combination of the weight and size of the shipment.
● This mode of transport is generally used when speed is more important
than cost.
● very reliable.
● direction to integration and cooperation with other modes of
transportation such as water and inland carriages.
● This action will allow companies to provide services like Just-In-Time.
Waterway
● This is a very common way of shipping goods.
● The goods that travel by water include chemicals, stone, cement, sugar, coal
and other heavy commodities
● The cost for shipping by waterways is economical.
● Most low-cost products are shipped by waterways
● For the international movement of freight, maritime transport performs a
dominant role in the supply chain.
● Service quality such as real-time information or tracking systems is more
important than delivery price for the logistics industry.
 ● The water industry has three types of operation: industry, liner, and tramp
shipping.
● Industry shipping supplies raw materials like natural gas, which requires
high-pressure containers.
● Liner shipping conveys standardized containers partially or comprising
manufactured products from various shippers and different consignments (
● Tramp shipping has irregular schedules, sporadic routes, and prices to
maximize profit with long-term contracts.
● Liner shipping is similar to bus services, while tramp shipping is the same as
taxi services
Pipelines
● Crude oil, natural gas and other petroleum products are shipped by
pipelines. Once the pipelines are built, the cost per kilometer for shipping is
very inexpensive.
● There is a lot of opposition and concern over new pipelines because of
worry over spills and leaks that may contaminate land and waterways.

Table 4.1
Characteristics of Mode of Transportation

Mode Characteristics

Road Advantages: direct access to consignee place and consignor; high accessibility,
mobility, and availability level; frequency, and dependability.
Disadvantages: limited and low capacity for moving large quantities of freight;
low safety and speed

Rail Advantages: Carrying capacity is high, energy consumption is low, and impact
of weather conditions is low, good on speed, capability to transfer oversized
freight.
Mode Characteristics

Disadvantages: time-consuming for organizing goods, complicated and high

cost of maintenance, equipment requirements, and difficult flexibility to
manage urgent demand

Air Advantages: High-speed delivery to far destinations; high security; risk of

damage products is low; accessibility and flexibility; the great frequency for
regular move products from one location to the next; connect national and
international distance.
Disadvantages: Delivery fee is high; capacity constraints; required other
modes of transport for moving goods to the airport; lack of direct access to
consignees and consignors; manage demand; impact weather factors that
affect low schedule reliability; cost of delay can be significant; air traffic.

Water Advantage: Cheap price and has a high capacity for bulky freights.
Disadvantage: Products take a long time to arrive; weather conditions affect
schedule

Pipeline Advantages: high capacity; the impact of weather conditions is low; operation
fee is cheap; conveyance is continuous; excellent dependability.
Disadvantages: Supervision is hard; high cost of infrastructures and ongoing
maintenance and inspection

Multimodal/Intermodal Shipping
● This refers to the use of a combination of different types of transportation
to move goods from origin to destination.
● A common example is a combination of truck/ship/train.
● The goal is to ship the goods as efficiently as possible.
 ● The goods are shipped under a single contract with a carrier, and can be
easily tracked.
● It also uses several modes of transportation but also uses a container so
that freight does not have to be handled each time it changes modes.
● Each mode will have a carrier responsible for the shipment. The use of
containers increases the security, reduces loss and damage and increases
the speed of shipment
Figure 4.1
Transportation Modes