Major Functions of Logistics Management

Understanding the objectives of logistics management can help organizations to

boost profitability and enhance the customer experience. Therefore, implementing
and executing efficient logistics functions allow companies to gain a substantial
competitive advantage.

1. Order Processing

Logistics operations tend to begin with order processing as it manages the entire
workflow that determines the orders are prepared and delivered to the customers. It
is a vital part of fulfilling the customer requirements, so it consists of major
activities such as picking, packaging, and delivering the goods.

Following an effective logistics strategy allows the organizations to receive,

record, assemble and distribute customer orders in the shortest period. It is
imperative for business owners as it is considered to be the key component of order
fulfillment. There are five major steps in order processing such as order placement,
picking inventory, sorting, packing, and shipping. Therefore, optimizing these
activities are making the operations efficient and accurate.

2. Material Handling

Logistics companies are responsible for managing the surplus goods within the
warehouses. It ensures that the goods are safely transported throughout the entire
process starting from manufacturing to distribution. Handling goods or materials
can be a daunting task, therefore the organizations should streamline the work
activities and incorporate the relevant equipment which is manual, semi-
automated, and automated equipment. Moving stored materials or products is an
important function of logistics which can lower the manufacturing cost and elevate
the customer experience.

3. Inventory Management
It manages the crucial information about the flow and storage of goods by
determining how much stock is needed. It uses various valuable insights to keep
the track of the goods and maintain sufficient inventories. Inventory management
in logistics helps in restocking and predicting the demand in the supply chain
operations.

Moreover, it determines the speed of production processes which is an efficient

way to make the decisions cost-effective. Nowadays, the just-in-time inventory is
also becoming popular as it increases efficiency by accurately forecasting demand
and meeting the customer requirements without investing much in manufacturing.

4. Warehouse Management

It is the major function in logistics management as it is essential in running day-to-

day operations in the warehouse and safeguarding the goods.It is advisable that the
warehouses should be nearby to the dealer or the distributors’ place can be
beneficial to maintaining timely delivery.

Moreover, storing the goods or products is critical to business growth. Thus, it has
become imperative to choose the right warehouse by analyzing the structure,
layout, dimensions, etc. Warehousing plays an important role in the supply chain
so it is advisable to manage and optimize the operations in the warehouses with
real-time data for the efficient functioning of the workflow.

5. Transportation

It is required throughout a company’s supply chain to run the operations efficiently

which is also useful in driving high levels of operational excellence. Companies
are focusing on keeping transportation costs under control with advanced routing
practices and following compliance and regulations.

Embracing a transportation network that responds to your organizational needs is

significantly optimizing the last-mile delivery and reducing transportation costs.
Therefore, it is known to be one of the major functions of logistics as it is driven
by strategic planning and determines the success of the supply chain ecosystem.

6. Packaging and Labelling

It is an important aspect of the supply chain as the packaging of the product or

goods plays a vital role in facilitating sales. Encasing a product into suitable
packages and containers with safety and customs regulations is extremely essential
to enhance logistics functions. Packaging should be done correctly to eliminate the
breakage or spillage of the goods.

It also involves labeling which provides essential information about the goods such
as date of manufacturing and expiry, price ingredients, and so on. It is a critical
element that is used for damage prevention and enhancing material handling.
proactive about this area of your business.

7. Information and Control

The element of information and control allows the businesses to gain clear
visibility of the supply chain operations. It can help organizations to get real-time
insightful data with new-age technologies. Analyzing those data is useful in
evaluating overall delivery effectiveness. Therefore, embracing the latest
technological innovations strengthens the business goals by significantly impacting
the decisions and making the operations more cost-effective.

In order to effectively manage fleets, the most important function of logistics is to

implement transparency in the entire supply chain process. Having a deep
knowledge will enable businesses to create strategies that are for meeting
consumer demands.

Conclusion
These are some of the major functions of logistics management that help
organizations to manage entire supply chain operations. Making last mile delivery
more accurate, efficient, and customer-centric. Following the logistics operations
and the fundamental process is the best way to avoid potential disruptions and
business growth.

Proper logistics management ensures the managing and monitoring of the fleets in
real-time to make data-driven decisions and enhance the overall supply chain
strategy.
Here are the five major components of logistics management:

1. Planning: storage, warehousing, and materials handling

2. Packaging and utilization
3. Inventory control
4. Transportation
5. Information and control
Understanding each element of logistics is a simple and effective way to
recognize how logistics activities and processes take part in the supply
chain. Let’s take a close look at each.

1. Planning: Storage, Warehousing, and

Materials Handling
The market is unpredictable and highly susceptible to the imbalances
between supply and demand. Supply can be steady, but the demand for
goods from consumers is not. It is directly affected by different factors,
making it unpredictable.

Logistics management plays a key role in ensuring a constant and

continuous supply of goods from the manufacturer to the consumer. Great
planning becomes essential to maintain a healthy supply chain.

During the fluctuation of supply and demand, there can be an insufficient

supply of goods or a surplus of goods produced. In such cases, storage
units and warehouses become part of the process. Proper logistics
planning provides organization and synergy and becomes essential to
ensure proper maintenance and handling of the goods.

Planning is one of the most important components of Logistics

management. It is essential to assuring all elements of the process are
coordinated and implemented successfully. It creates systems and
processes to achieve timely delivery of products.

2. Packaging Unitisation
Care and conditioning of the products and goods are essential in the supply
chain. Proper handling and storing of products is key in logistics
management.

The packaging of the products takes a lot of research. Analyzing the way
the goods are stored to keep them at their best quality, and strategizing
how the package itself can be handled and processed is part of the
research and strategy. In addition, the colors and branding play a big part
to ensure the consumer gets a positive experience.

The design, the shape, the material, and even the colors of the packaging
are thought out in order to successfully get the product to the right hands in
the best condition possible. Packaging protects a product as it is being
transported from the manufacturer to the hands of the consumer or
distributor.

But when supply and demand fluctuate, that package might need to sit in a
warehouse in the process. That goes into the packaging strategy as well. It
must maintain and condition the product in such scenarios, without
jeopardizing the quality.

Unitisation assists in the storage and transportation of goods and products.

Essentially, it is a “grouped or bundled cargo, wrapped into packages and
loaded onto or inside a bigger unit”.

The end goal is to fit products and goods in a cube, the easiest shape to
transport and store. Packaging and unitisation work together on packing all
different shapes and sizes of products and goods into a cuboid shape.

3. Inventory Control
Inventory is closely related to storage and warehousing and is important to
ensure consumer requirements are met. It is about controlling the flow of
goods and products going in and out of the warehouses. It determines how
much stock to hold, where to store, and how much is to be stored.

Inventory management is about predicting the demand of goods by

consumers with the help of sales data, mathematical and statistical tools.
As previously mentioned, the market varies and can sometimes be
unpredictable.

Inventory management is not an exact science, but it is an important

logistics element to helping manage the flow of goods through the supply
chain. A healthy inventory balance is detrimental to the supply chain and
business margins.

4. Transportation
Transportation is a complex and costly part of logistics management. It can
represent 50 percent of the logistics budget, putting pressure on companies
to find the fastest and cost-effective way to get products and goods to the
consumers and distributors. Transportation includes various platforms,
such as road vehicles, cargo trains, freight shipping, and air transport.
Perishables do not travel far, but many other goods travel from all over the
world, adding complexity to the process such as tax codes, customs
clearance, and payment methods. All of which must be cleared before the
products even leave the warehouse.

Transportation plays a key role in the fast-growing industry of e-commerce.

The consumer has high expectations for fast and proper delivery of goods,
and even the return of such. When partnering with a 3PL, it is important to
work with a company that provides reliable and transparent logistic services
to ensure quality and efficiency.

5. Information and Control

Data-driven logistics drive the future of the industry. The flow of information
throughout the logistics management process is vital to providing fast and
accurate service to the consumer and manufacturers.

From inventory flow to warehouses and transportation, information

improves the efficiency and performance of activities in a supply chain.

Information and control improve business efficiency helping in the

traditional management processes, but also supporting as a modern tool in
achieving strategic goals.

Analyzing and understanding the five components of logics management

thoroughly is a constructive business practice as advances continue to
shape the components of logistics management, change the industry, and
improve the technologies.
businesses must understand the components of logistics in supply chain management to enhance
operations and guarantee customer happiness. These elements include:

Demand planning

Identifying all logistics-related areas is essential to maintaining supply and demand harmony. By
ensuring that operations are appropriately planned, logistics management prevents interruptions in the
movement of goods. Organizations can streamline their logistics management processes to evaluate
and predict demand for different products. It can also prevent an inadequate or erroneous product
supply and help businesses stay informed on market developments.

Material handling and storage

As demand is erratic, businesses must keep optimum supplies on hand until customers need them. The
storage, handling, retrieval, packing, and unitization of goods are all handled by warehouses. Many
businesses also utilize warehouse management systems to improve storage capabilities, warehousing
procedures, and retrieval times.
Inventory management

Companies regularly examine inventory levels to monitor the flow of goods to and from warehouses.
This is necessary to decide the amount of stock to acquire, when, and the place to store it. Businesses
can prevent having an excess or shortage of inventory by utilizing effective inventory management
and keeping the company's inventory at optimal levels. It can even predict client demand, making
order management efficient.

Transportation

This involves utilizing various forms of transportation to carry goods from one supply chain stage to
another. This is achieved through various means, including ships, roads, and freight trains. Companies
can also perform transportation optimization to ensure the timely delivery of the products to the end
client. It also manages the reverse transit of goods.

Information and Control

Logistics management can use software and technologies to generate data-driven insights to provide
demand and transportation estimates, enabling firms to make cost-effective choices. This element can
analyze, understand, and monitor the information flow to help businesses achieve strategic objectives
and secure their future in the industry.
Logistics play a critical role in promoting trade and ensuring smooth operations. However, as
time passes, the evolutionary changes in technology, customer demand, and ever-changing
legislation create more hurdles for even the largest logistics organizations.

1. Cost Savings On Transportation

This is the industry’s one of the greatest difficulties, as transportation accounts for a sizable
portion of total logistics expenses. A key source of concern for logistics businesses
worldwide is the rise in fuel prices, as they account for most of the increase in transportation
costs. Increased fuel prices impose an additional surcharge on customers, effectively
increasing the total shipping cost or freight charge for products and affecting revenue and
earnings when fuel prices fall. Failure to cut costs results in an increase in expenses and,
ultimately, losses for the business.

2. Enhancing Business Procedures

Keeping up with new advances in business procedures is another challenge for the logistics
company. As new opportunities arise, it is in the best interest to adapt and adopt these
changes to improve service and operational efficiency. According to a study, 36% of firms
surveyed strongly agreed that they relied on their logistics partners to deliver cost savings and
process improvements. This requires logistics partners to have the knowledge and experience
to look beyond supply chain and operations to effect change throughout the framework of the
entire procedure. Moreover, they should be financially stable, adaptable, and willing to take
appropriate risks for long-term gain.

3. Improving Customer Service

Markets are dynamic and competitive nowadays, supply chains have grown complex and
customer expectations have shifted. When clients place an order with the business today, they
have higher expectations of delivery times and service quality. Customers expect
their logistics partners to assist them in resolving issues and growing in a competitive
climate. They demand tracking information and real-time updates on the status of their order
throughout the shipment and delivery process. Additionally, they want the option of paying
for expedited freight, such as two-day or same-day delivery.

4. Relationships with Suppliers

Any logistics company’s success depends upon its relationship with its suppliers. Businesses
should continuously strengthen their relationship with their supplier, keeping them informed
of their development and ensuring that the supplier is satisfied with their success. It is critical
to develop, comprehend, and adhere to mutually agreed upon standards in order to gain a
greater understanding of not only present performance but also areas for development.

5. Reverse logistics
Every e-commerce business requires reverse logistics. Customers return products they have
purchased if they are unsatisfied, and the process should be seamless. Without an effective
reverse logistics platform, you risk alienating customers and preventing them from making
another purchase from you. However, implementing a reverse logistics plan can be difficult
and costly without the proper support.

6. Shortage Of Drivers
Driver shortages continue to be a major problem for logistics companies across the globe.
Dealing with drivers and transporters are critical necessities that should be addressed with
proper supply and demand management. One of the most effective ways for shippers to
attract new drivers is to offer amenities that address the drivers’ interests, requirements, and
aspirations. Shippers can begin developing a more positive relationship by demonstrating the
importance and necessity of drivers for the growth of the company.

7. Lack Of Skilled Manpower

Numerous logistics sectors suffer from an increasing shortage of competent labour and
specialized experts. With the advancement of modern technology, there is an increased
demand for technically trained manpower. However, most labourers are underqualified,
overworked, and lack the necessary skill sets to ensure the process is efficient. As a result,
these businesses confront significant workforce turnover, increasing training expenditures,
and underperforming human resource departments.

8. Government Regulations
Logistics companies should adhere to stringent laws set by federal, state, and local
governments. Transportation legislation, norms, and security measures differ by region, and
educating all company staff about these restrictions can be a significant burden. Additionally,
these laws constrain the scope and autonomy of logistics firms and their ability to seek
alternative viable options and prospects.

9. Environmental Regulations
The growth of transportation and logistics infrastructure requires a significant amount of
space. As a result, carbon emission increases and the environment suffers. Reduced
greenhouse gas emissions is a top priority for many logistics businesses, particularly in light
of several studies demonstrating the negative impact of large industrial supply chains on the
environment. Companies that adapt and decrease their carbon footprints succeed more than
ever before, as both partners and consumers are more conscious.

10. Technological Barriers

While technology is critical to a logistics company’s success and primarily benefits the
industry, most businesses are faced with problems such as ‘who will pay for it’ and ‘who will
execute the technology advancements’. Responding to these questions is critical for logistics
companies operating in developing and third world countries. Additionally, the cost of
logistics technology is relatively high, with only the largest logistics organizations able to
afford top-notch technology.
A value chain is a concept describing the full chain of a business's activities in the
creation of a product or service -- from the initial reception of materials all the way
through its delivery to market, and everything in between.

The value chain framework is made up of five primary activities -- inbound

operations, operations, outbound logistics, marketing and sales, service -- and four
secondary activities -- procurement and purchasing, human resource management,
technological development and company infrastructure.

A value chain analysis is when a business identifies its primary and secondary
activities and subactivities, and evaluates the efficiency of each point. A value
chain analysis can reveal linkages, dependencies and other patterns in the value
chain.

The value chain concept was first described in 1985 by Harvard Business School
professor Michael Porter, in his book Competitive Advantage: Creating and
Sustaining Superior Performance.
 A
diagram of a value chain's five primary activities and four secondary activities.
How do value chains work?
The value chain framework helps organizations identify and group their own
business functions into primary and secondary activities.

Analyzing these value chain activities, subactivities and the relationships between
them helps organizations understand them as a system of interrelated functions.
Then, organizations can individually analyze each to assess whether the output of
each activity or subactivity can be improved -- relative to the cost, time and effort
they require.

When an organization applies the value chain concept to its own activities, it is
called a value chain analysis.

Primary activities

Primary activities contribute to a product or service's physical creation, sale,

maintenance and support. These activities include the following:

 Inbound operations. The internal handling and management of

resources coming from outside sources -- such as external vendors and
 other supply chain sources. These outside resources flowing in are called
"inputs" and may include raw materials.

 Operations. Activities and processes that transform inputs into "outputs"

-- the product or service being sold by the business that flow out to
customers. These "outputs" are the core products that can be sold for a
higher price than the cost of materials and production to create a profit.

 Outbound logistics. The delivery of outputs to customers. Processes

involve systems for storage, collection and distribution to customers.
This includes managing a company's internal systems and external
systems from customer organizations.

 Marketing and sales. Activities such as advertising and brand-building,

which seek to increase visibility, reach a marketing audience and
communicate why a consumer should purchase a product or service.

 Service. Activities such as customer service and product support, which

reinforce a long-term relationship with the customers who have
purchased a product or service.

As management issues and inefficiencies are relatively easy to identify here, well-
managed primary activities are often the source of a business's cost advantage. This
means the business can produce a product or service at a lower cost than its
competitors.

Secondary activities

The following secondary activities support the various primary activities:

 Procurement and purchasing. Finding new external vendors,

maintaining vendor relationships, and negotiating prices and other
activities related to bringing in the necessary materials and resources
used to build a product or service.

 Human resource management. The management of human capital.

This includes functions such as hiring, training, building and maintaining
 an organizational culture; and maintaining positive employee
relationships.

 Technology development. Activities such as research and development,

IT management and cybersecurity that build and maintain an
organization's use of technology.

 Company infrastructure. Necessary company activities such as legal,

general management, administrative, accounting, finance, public
relations and quality assurance.
Benefits of value chains
The value chain framework helps organizations understand and evaluate sources of
positive and negative cost efficiency. Conducting a value chain analysis can help
businesses in the following ways:

 Support decisions for various business activities.

 Diagnose points of ineffectiveness for corrective action.

 Understand linkages and dependencies between different activities and

areas in the business. For example, issues in human resources
management and technology can permeate nearly all business activities.

 Optimize activities to maximize output and minimize organizational

expenses.

 Potentially create a cost advantage over competitors.

 Understand core competencies and areas of improvement.

A value chain analysis can offer important benefits; however, when emphasizing
granular process details in a value chain, it's important to still give proper attention
to an organization's broader strategy.

How to conduct a value chain analysis

A value chain analysis is a process that helps organizations understand points in
their value chain, as well as relationships between these different points.
Conducting a value chain analysis helps a company identify factors that create or
hinder cost efficiency in its business model.

When undergoing a value chain analysis, businesses should regard the framework
as a starting point rather than a complete start-to-finish process.

Here are some steps that companies can take to understand their value chains:

1. Break each primary and secondary activity down into

subactivities. Organizations can then analyze each function on a more
granular level, to compare the financial return of each function to the
time, effort and cost required.

2. Look for connections between subactivities. Often, the inefficiency of

one activity or subactivity is linked to another. For example, an ill-
advised HR hire can create issues that permeate into many different
subactivities. Technology and inbound operations can also have rippling
effects throughout a company's value chain.

3. Diagnose areas of improvement. Consider trends and patterns in the

different subactivities and connections between subactivities, and
evaluate for potential improvement opportunities in those particular
points in the value chain.
Examples of value chains
Here are some examples of tech/e-commerce giant Amazon's primary activities.

Inbound logistics. Amazon's primary inputs can be identified as products sold

through its own fulfillment services, as well as data center resources that fuel
Amazon Web Services (AWS) cloud offerings.

Here, Amazon can use its size as a large operation to lower the costs per unit of
items it purchases from external suppliers.
1) Movement of Products :
The fundamental function of transportation is to move the products from one place to another.
The upward and downward movements of products in the value chain are facilitated by
transportation. Transportation is important for moving the material to the next stage of
manufacturing process and also closer to the customer. The material can be in the form of
components, assemblies, materials, work-in-progress, finished products.

2) Storage of Products :
Storing the product in the vehicles for temporary purpose can be seen as another function of
transportation. It can be seen as a costly source of storage but it is less expensive than the cost of
unloading the material in a warehouse for few days and again loading it. Vehicles are used as
temporary storage facility because sometimes the need of storing the in-transit shipment,
generally for few days, arises. Another situation where the transportation vehicle can be used as a
storage facility is when the space in the warehouse is limited.

3) Economic Utility:
As per the economic theories, creating place utility (right place) for the products, distributed and
produced by the firm, can be seen as the main function of transportation. When the goods are
placed where they are to be consumed, it is regarded as place utility. Apart from having the
products at the right place, it is also important to have the product at the right time (time utility)
and in right form (form utility). Moreover, the products should be owned by or in custody of the
person who really wants to consume these products creating 'possession utility'. All the discussed
utilities depend the efficiency and effectiveness of transportation.
4) Geographic Specialization :
When the products are produced in that nation, region, or city which suits best as per the capital,
talent, labour, raw material, and other resources of the company, it as regarded as 'geographic
specialization'. Some level of economic inefficiency can be resulted when such specialization
does not occur. In other words, when a certain region, nation, or city is not able to produce certain
products because of its misfit with some of the factors then the extra resources and efforts need to
be applied.
For example, if area A is specialized in product X then it needs to depend on other areas for
fulfilling its need of things other than the product A.

5) Large-Scale Production :
In order to enable the large scale production, any firm will be requiring the collection of different
types of raw material, spare parts, equipment, items from number of sources and from number of
locations. Similarly, after producing the product it should be distributed to a large geographical
market at a reasonable cost. Therefore, transportation is a very crucial element for carrying out a
large-scale production.

Modes of Transportation :

Rail, highways, water, pipeline, and air are the five main modes of transportation. Apart from
these the recently emerged forms of transportation are package carrier, ropeways, and inter-modal
system. Traffic volume, revenue, system mileage, and the nature of traffic composition are the
factors that can be used to determine the comparative significance of each mode. With respect to
these measures, each mode of transportation is explained below :
1) Roadways :
For the agricultural and industrial development of any nation, the most important mode can be
seen as the road transport. This method is quite useful in reaching to short and medium distances,
even to those places where other modes of transportation do not have their reach. The facility of
door-to-door service, which is not possible by other modes, is provided by road transport. In
order to bring the trade from the remote and rural areas to the urban and semi-urban areas, road
transportation can be used. With the help. of road transportation the basic infrastructure can be
built to ensure the connectivity of far-off villages with the rest of the nation. Because of the
increased demand and a huge development in industrial and agricultural sector, the significance
of road transportation is quite vital for making the product available at the place and time of
consumption. In the transport network of the country, the role of road transportation is quite
dominant.

2) Railways :
One of the principal carriers of men and material in the country is railways which plays a very
significant role in the trade and commerce activities of the country. It supplies essential
commodities. to different locations by transporting across the length and breadth of the country.
The industrialization and development of many nations have been carried forward with the help
of railways. During the initial phase of industrialization many countries were depending upon the
railways as it was the main source of transportation which was available for moving the raw
material and finished products from one place to another. Chemicals, heavy material, farm
products, automobiles, and also the low value products are transported by railways. They have
greater efficiency in case of truckloads which can be shipped at a relatively cheaper price through
railways in comparison to smaller modes of transportations. A relatively lesser handling is
required in transporting the goods through railways. In order to facilitate easy loading and
unloading of material, different firms establish their facilities near to the rail lines.

3) Waterways/Sea :
In order to ship heavy, non-perishable, and low value goods (such as coal, grain, ore, and
petroleum products), the cheapest mode of transportation can be seen as waterways. There is a
huge capacity in case of water carriers. Products weighing a minimum of ten times the weight of
one rail car can be transported by waterways powered by towboats, tugboats, barges which move
in inter coastal canals and inland rivers. In fact the vessels which run in oceans can have
thousands of containers. There are a number of markets which are not connected with the
waterways without the use of railroad or trucks. The waterway shipping industry is segmented
into various parts which are as below :
 Liner service
 Tramp shipping
 Tanker operations
 Industrial services
Dry bulk carries, container ships, tankers, and special vessels are included in the shipping fleet
around the world. In India, approximately 32% of the total GRT (Gross Registered Tonnage) of
the shipping fleet is contributed by the dry bulk carriers and 33% of total fleet is accounted by the
tankers.

4) Airways :
Among all the other modes of transport, the least hazardous mode can be considered as the
airways. The cost of air transportation is quite high; thus, it is mainly used for the transportation
of high valued perishable products with limited life span. The facility of air cargo is mainly
concentrated near the gateway airports e.g. Delhi, Mumbai, Kolkata, Chennai, and Bangalore.
About 87% of the total air cargo is handled by these airports in India. Anticipating the growing
needs of cargo airways and passenger airways, the Government of India is inviting the interested
private players in the air transport services and its associated services such as airports.

5) Pipelines :
The use of pipeline for transportation of petroleum was first done by Samuel Van Syckel in the
year 1870 in Pithole, Pennysyivania. The face of transportation was changed after twenty years
by Standard Oil Company of North-Western Pennysylvania. The pipeline transportation was first
use for transporting the petroleum but its scope is enhanced by using it for transporting many
commodities such as coal in slurry form, chemicals, natural gas, iron ore fines in slurry form, etc.
Although the initial cost of setting up the network of pipelines is quite high but later it helps in
reducing the operating costs. Almost all public and private sector petroleum refineries use the
pipelines for the transportation of petroleum products. These can be thought of as the most
automated mode of transportation which mainly carries the products of a shipper as it belongs
only to a certain shipper. Mainly chemicals or petroleum products are transported by the
pipelines. There are numerous environmentalists who have. their concerns regarding the effect of
pipeline on the environment such as harm to plants and animals due to installation and leaks.

6) Ropeways :
Out of the total geographical area of India, over 16% is comprised of hilly locations. The problem
of transportation is quite prominent in these locations due to the long circuitous paths.
Sometimes, the transportation of essential commodities and other materials is quite vital due to
their strategic significance in the defence programs of the nation. Ropeways can be seen as the
economical and faster mode of transportation in the hilly areas, especially when the oil shortage
is going on. The various merits of ropeways are as follows :
 Lesser harm to the ecology.
 Shorter routes can be used to reach to the remote hilly locations.
 The cost of ropeway transportation is lesser than the other modes.
 Over short distance, thee transportation of bulky products is quite fast.
7) Package Service :
The country, in last few decades, has faced a huge problem related to the availability of
transportation for small-shipments. Due to the different costs associated with the terminal and
line haul operations, the small-shipment service providers charged quite high prices. The
providers cannot decrease the prices as different overheads impose certain minimum charges on
them irrespective of the size of shipment and the distance of destination. Due to such obstacles,
some private companies realized the potential of specialized services for package-service or
small-shipment market.

8) Inter-modal Transportation :
Taking the economic advantages of two or more modes of transportation by combining them with
each other to facilitate the transportation service at a least possible total cost is known as inter-
modal transportation. In order to combine the various modes of transportations, various efforts
are carried out over the years. The concept of inter modal transportation is not a new concept, it
has originated during the early years of 1920s but in order to control the monopoly practices,
different restrictions were imposed on the cooperative practices. During 1950s, this mode started
gaining popularity as the advantages of road and rail transportation were combined to for a an
inter-modal transportation known as piggy back service. The flexibility of motor or road transport
for low distances and the low line-haul cost of rail for longer distances were combined to form
this common inter-modal transportation. In order to gain the higher efficiency and effectiveness
of transportation, the popularity of inter-modal transportation has increased significantly in recent
years.

Participants in Transportation :

Following are the participants that together facilitate the transportation activities :