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Understanding the Economics of Transportation: Key Components of Freight Demand

This overview focuses on the essential economic principles guiding transportation logistics, particularly derived demand and landed cost. Derived demand highlights the relationship between product price and transportation expenses, while landed cost emphasizes total product costs, including transportation. The text also explores vital service components influencing freight demand, such as transit time, reliability, accessibility, and the advantages of motor carriers. Understanding these concepts is crucial for effective logistics management, reducing inventory costs, and enhancing supply chain efficiency.

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Understanding the Economics of Transportation: Key Components of Freight Demand

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  1. Basic Concepts in TransportationPart Seven Marketing Logistics

  2. Other Economics of Transportation

  3. Other Economics of Transportation • Derived demand.

  4. Other Economics of Transportation • Derived demand. • Landed cost.

  5. Other Economics of Transportation • Derived demand. • Landed cost. • Cost of product plus its transportation costs.

  6. Other Economics of Transportation • Derived demand. • Landed cost. • Cost of product plus its transportation costs. • If a product shipped all the way from China costs less than a product made in our city, it has a competitive landed cost.

  7. Service Components of Freight Demand.

  8. Service Components of Freight Demand. • Transit time

  9. Service Components of Freight Demand. • Transit time • The longer the transit time, the higher the inventory levels and inventory carrying costs.

  10. Service Components of Freight Demand. • Transit time • The longer the transit time, the higher the inventory levels and inventory carrying costs. • The longer the transit time, the greater the chance of stockouts.

  11. Service Components of Freight Demand. • Transit time • The longer the transit time, the higher the inventory levels and inventory carrying costs. • The longer the transit time, the greater the chance of stockouts. • Reliability

  12. Service Components of Freight Demand. • Transit time • The longer the transit time, the higher the inventory levels and inventory carrying costs. • The longer the transit time, the greater the chance of stockouts. • Reliability • Reliability affects modal and carrier demand.

  13. Service Components of Freight Demand. • Transit time • The longer the transit time, the higher the inventory levels and inventory carrying costs. • The longer the transit time, the greater the chance of stockouts. • Reliability • Reliability affects modal and carrier demand. • Accessibility.

  14. Service Components of Freight Demand. • Transit time • The longer the transit time, the higher the inventory levels and inventory carrying costs. • The longer the transit time, the greater the chance of stockouts. • Reliability • Reliability affects modal and carrier demand. • Accessibility. • Motor carrier advantage.

  15. Service Components of Freight Demand. • Transit time • The longer the transit time, the higher the inventory levels and inventory carrying costs. • The longer the transit time, the greater the chance of stockouts. • Reliability • Reliability affects modal and carrier demand. • Accessibility. • Motor carrier advantage. • Capability.

  16. Service Components of Freight Demand. • Transit time • The longer the transit time, the higher the inventory levels and inventory carrying costs. • The longer the transit time, the greater the chance of stockouts. • Reliability • Reliability affects modal and carrier demand. • Accessibility. • Motor carrier advantage. • Capability. • Refrigerated equipment.

  17. Service Components of Freight Demand. • Transit time • The longer the transit time, the higher the inventory levels and inventory carrying costs. • The longer the transit time, the greater the chance of stockouts. • Reliability • Reliability affects modal and carrier demand. • Accessibility. • Motor carrier advantage. • Capability. • Refrigerated equipment. • Security.

  18. End of Program Go to Part Eight.

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