Notesale: Turn your study into money

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An organisation can choose from sea, air and rail
as transport modes
Quality and speed have a price, but so do delays
and damages
Prices of fuels, interest rates and freight costs
are continuously changing
Movements should be constantly monitored
appropriate policy changes should be made when
necessary

ITC

M10:A:3
...
1-2

ITC

M10:A:3
...
1-4

Choosing the most appropriate
mode of transport
 Determine the ultimate destination &
the speed & frequency of delivery required
 Match the type and size of the cargo to the type of
transport available & its capacity
 Match the physical attributes & handling capacities of ports,
terminals, warehouses with the type of transport
 Compare the cost implications of more frequent deliveries of
small cargoes against those of fewer shipments of larger
cargoes
 Obtain & compare freight quotations from different sources
ITC

M10:A:3
...
3 tonnes
2
...
shipments per year

40

10

 Supplier’s avge yearly stock awaiting shipment 0
...
4 tonnes

 Buyer’s average yearly stock after shipment
Logistics costs per kg

10
...
5 tonnes
Air ($)

 Freight rate

2
...
40

 Packing

0
...
20

 Local transport in supplier’s country (to FOB)

0
...
15

 Insurance

0
...
30

 Tied up capital during the voyage

0
...
40

 Ordering costs

0
...
02

 Local transport in the buyer’s country

0
...
25

 In transit warehousing

0
...
45

 Tied capital in stock (before & after shipment)

0
...
15

3
...
32

Total cost per kg:

M10:A:3
...
3-1
Purchase item(s):
____ tonnes
____ tonnes
____ m3 /tonne
____
Mode:

Mode:

 Door-to-door lead-time

__days

__ days

 Annual interest rate

__%

__%

 No
...
3-2

Action Point

A
...
3-3



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