Tm n sportatio ri

Tm n sportatio ri

Transportation decisions have a critical impact on logistics costs. The choice of transportation carriers affects the pricing of products, delivery performance and condition of the goods when they arrive ­ all of which will ultimately affect

customer satisfaction.

In shipping goods to its warehouses, dealers and customers, the company can choose among five transportation modes: road, rail, water, pipeline and air.

ROAD. Trucks are highly flexible in their routing and time schedules. They arc efficient for short hauls of high­value merchandise, hi the EU, the bulk of goods traded is moved by road vehicles. The Conference of European Transport

Ministers (CEMT) reported that transport volumes in the EU have risen by more than 50 per cent in the last 20 years. The hulk of this growth has been in road transport, which accounts for over 74 per cent of European freight transport/" Haulage rates for different cargo loads over different distances among EU member nations do, however, vary ­ Greek domestic rates are the lowest, followed by UK rates: German haulage costs are the highest, with France and Italy close behind in the high end of the rate spectrum. J! The gradual deregulation and removal of restrictive practices in the road transport market in the EU is expected ro

increase intra­EU haulage competition, with a downward pressure on rates. Also, there will be greater freedom for international hauliers to transport goods between

destinations within one country, thereby raising the efficiency in use of trucks. RAIL. Railroads are one of the most cost­ef'fective modes for shipping large

amounts of bulk products ­ coal, sand, minerals, farm and forest products ­ over long distances. In Europe, rail accounts for just over 17 per cent of total freight

traffic. Ongoing developments, such as the Clumnel Tunnel and its associated freight links, together with the EU's efforts to speed up the development of rail

freight and combined road/rail transport services throughout Europe ­ including the opening up of networks in eastern Europe ­ are pushing rail transport much more firmly into the general distribution spotlight:

A European 'rail renaissance' will cost a staggering ecu300 billion. The importance given to railways is apparent from the European Commission's list of two dozen or more priority transport projects. Nine ot' them are high­speed rail links, including the Brenner rail tunnel through the Austrian Alps and the Kehninarn Belt Baltic fixed link running between Denmark and Germany. However, real collaboration and standardization among Europe's railways is indispensable for reinforcing rail's presence on main cross­border routes. While there is some evidence that Europe's new railways are attracting passengers back, the

revitalizatiori of rail freight may take some time. There is optimism in the

air as authorities and politicians alike agree that it is not a simple question of road versus rail ­ Europe must have both. 22

WATER. In countries favourably served by coastal and inland waterways, a large amount of goods can be moved by ships and barges. On the one hand, the cost of water transportation is very low for shipping bulky, low­value, non­perishable products such as sand, coal, grain, oil and metallic ores ­ a single coaster or ro­ro (roll on, roll off) ship can carry the same cargo as dozens of trains or hundreds of

trucks. On the other hand, water transportation is the slowest transportation mode arid is sometimes affected by the weather. Again, producers and suppliers have to make choice decisions based on trade­offs between speed, security and costs of transportation.

In the EU. waterways' share of freight transport volume is around 8 per cent ­ low compared to rail and roads. Its full potential, however, cannot be realized without harmonization of European shipping and port policies and pricing systems, and the removal of existing restrictive and unnecessary legislation. German operators, for example, have been set against traditional cheaper rivals in

Holland, Belgium and France. Despite the problems, the EU and member govern­ ments are set on pushing ahead with ambitious plans to upgrade Europe's

waterway network, with hopes pinned on a healthier waterway freight industry in the future. 2 ­ 1

PIPELINE. Pipelines are a specialized means of shipping raw commodities such as petroleum, natural gas and chemicals from sources to markets. Pipeline shipment of petroleum products costs less than rail shipment, but more than water shipment. Host pipelines are used by their owners to ship their own

products.

A l R . Although the use of air carriers tends to be restricted to low­bulk goods, they are becoming more important as a transportation mode. Air­freight rates are much higher than rail or truck rates, but air freight is ideal when speed is needed or distant markets have to be reached. Among the most frequently air­freighted products are perishables (fresh fish, cut flowers) and high­value, low­bulk items (technical instruments, jewellery). Companies find that air freight also reduces inventory levels, packaging costs and the number of warehouses needed.