Confused about the different types of transport logistics operators?
Let’s delve a little deeper into the world of transport logistics to help explain more about this industry.
One thing they both have in common is the cost involved in managing transport logistics. Cost which can be categorised into the following sectors:
According to a 2015 report by Markets and Markets, the Transport Managements System Market is an industry worth £6.5 Billion ($9.22 Billion).
The human cost is almost inevitable for such a large industry. Despite the increased use of technology, humans are always needed in every aspect of society and this comes at a cost.
Employees cost, recruiting them, cost, training them, cost, and even losing valuable employees come at a cost too.
Dedicated loads are offered as a prime service but comes with additional costs, often related to bespoke customer management delivered by a dedicated team. It is debatable that reducing the risk of human errors can be offset with training.
The financial cost of transport logistics
The financial cost is in other words the monetary value of transport management, it’s a cost no businesses can underestimate when it comes to transport logistics and profitability.
Finding effective ways to keep transportation cost down is an ongoing challenge. This financial cost is usually factored into consumers final products, so this cost is somehow hidden to them, yet it remain real.
Without doubt transport is a key component of today’s global economy. So it comes as no surprises that when a transport logistics issue arises and brings everything to a halt, this implicates even further costs.
As transportation became more and more sophisticated the cost of transporting goods from the other sides of the world came with advantages and disadvantages.
But what about the risks of strikes? How do these issues affect freight logistics and other industries?
In today fast-paced economy foreign goods, in many western countries, are often cheaper than their locally produced counterparts. Hence crisis as epitomised by the 2015 farmers strike in France where road haulage trucks were stopped at German and Spanish borders. They were protesting against the unfair competition from cheap foreign products.
Even in the UK, some local producers may put the blame on EU free market, others on countries as far as India and China.
What are the environmental, social and economical costs?
The environmental cost has also played a major role in promoting locally sourced goods. Used as a backdrop in the fight between local and non-local producers. Environmentally and socially grounded costs are as such connected to economically grounded costs.
With the production of CO2 emissions, transportation has also been associated to environment and health damages, yet, without it, one can question how today’s society can even function.
Taking road haulage, as an example, that is the business of transporting goods by roads or rails, without it heavy loads of goods cannot be transported in masses. In an ideal world we could dream of buying everything locally but capitalism and the needs of providing for the masses at a reduced cost have made our system heavily reliant on transportation. On the other hand an environmental disaster may bring transports to a halt, even locally dedicated loads in the UK could be stopped because of floods.
Political and social costs such as an embargo on a country, or the strong connection between regions can be seen as what makes or breaks any transport logistics, an ongoing challenge any logistics operator who relies on the swift movement of road haulage faces.