Supply Chain Modes of Transportation: Strengths & Weaknesses

Supply Chain Modes of Transportation: Strengths & Weaknesses
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  • 00:00 Different Types of…
  • 00:42 Trucks
  • 1:40 Rail
  • 2:22 Sea and Air
  • 3:20 Multi-Modal
  • 4:02 Lesson Summary
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Lesson Transcript
Instructor: Kevin Newton

Kevin has edited encyclopedias, taught middle and high school history, and has a master's degree in Islamic law.

Supply chain managers are spoiled for choice when it comes to moving goods around. However, not all modes are created equal. In this lesson, you'll learn about some of the most common forms of transportation and their strengths and weaknesses.

Different Types of Transportation

As a supply chain manager for a multi-national corporation, you have a lot on your mind, from the political tensions in the home country of one of your biggest suppliers to making sure that just enough goods reach each factory and distribution center so as to limit waste. You're a very busy person and we haven't even mentioned your most basic duty: getting goods from point A to point B. Fortunately, you have lots of choices when it comes to how to actually move goods. In this lesson, we're going to take a look at the four basic ways that goods can be moved, as well as the relatively new ideal of multi-modal transportation.

Trucks

The most basic way to move goods across the continent is via truck. Whether large tractor trailers or smaller courier operations, trucks move the majority of the freight in this country. This is because trucks have several key advantages. The biggest is that trucks can go almost anywhere. A truck can go from a major distribution center to a residential location with no problem. As you can imagine, this makes them central for linking smaller outposts of your supply chain. However, trucks do come with disadvantages. Most obviously, trucks produce a great deal of pollution. Additionally, trucks have variable costs depending on the time of the year. A load from Florida or California can go from a few thousand dollars at most points of the year to four times that much during produce seasons. In short, pricing on trucks is heavily dependent on the laws of supply and demand.

Rail

Unlike trucks, railroads are the most environmentally friendly way to move freight across land. Railroads were among the first ways to cross vast land distances and in some parts of the world are used almost exclusively as a way of moving raw materials. Combined with the existing rail network, it's clear that rail shipments can feature prominently in developed supply chains. However, these too have disadvantages. A truck can pull up outside of a customer's house. A train has to stop at a rail yard. Likewise, a truck is relatively easy to unpack, while unloading a train requires a specialized crew.

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