Interrelation of transport services markets with the serviced...

Interrelation of markets for transport services with serviced commodity markets

The processes of commodity exchange and transportation of goods in the economy are closely related. In many cases, transportation is an integral part of the purchase and sale transaction. This gives some researchers a reason to consider transport and trade almost as synonyms.

The relationship between transportation and trade is manifested primarily through the transport component of the product chain. The cheaper the goods and the farther from the point of production is the market for its sale, the more this influence is manifested more. In the supply chain of such goods as, for example, coal or grain, the transport component in the final product chain can reach 50%. For such goods, excessive transportation costs can make a certain regional market inaccessible to the manufacturer. Therefore, relatively cheap bulk, bulk and bulk bulk cargoes are transported, as a rule, with a minimum level of profitability in order to ensure their competitiveness at the maximum distance from the place of production (the interconnection of transport and commodity markets through the tariff is considered in paragraph 3.3).

For more expensive cargoes, the cost of delivery goes to the background, but other characteristics of the transport service are significant: punctuality, speed, flexibility of transport services, a set of additional services, etc. If they are at a sufficiently high level, then the manufacturer or the trading company will have the opportunity of effective market maneuver, by managing the transportation, ensuring, according to the classical formula, the appearance of the "necessary goods in the right quantity at the right place at the right time."

Another factor that determines the relationship between transport and commodity markets is the impact of transportation conditions on the volume of reserves in production and trade. Constant increase of reliability and flexibility of transport systems allows to expand the application of concepts such as] and -time and floating stock, which reduce the level of stocks in supply chains.

The relationship between transportation and trade is reflected in trade contracts in determining the transport aspects of the supply of goods. The transport factor is particularly important in international trade, which is characterized by long distances of transportation, the participation of operators of various modes of transport and freight forwarders, as well as a rather complex process of preparation and documenting the carriage. Successful implementation of a foreign trade transaction requires the correct choice of modes of transport, the definition of transport operators and the transportation route, the provision of an acceptable price for transport services, the coordination of transport operations and the timing of their implementation and coordination of actions of all participants in the delivery process. In addition, it is important that the distribution of duties, costs and risks associated with transportation is acceptable to the seller and buyer of the goods. Such distribution is established by the choice of participants in the transaction basis INCOTERMS, on the basis of which the delivery is made (see paragraph 8.7).

The presence of interrelations between transport services markets and commodity markets forces transport companies to constantly analyze the state of the markets in which their customers - shippers operate. In the logistics projects implemented in various sectors of the economy, the system optimization of the processes of supply, storage and transportation of goods is increasingly being carried out.

thematic pictures

Also We Can Offer!

Other services that we offer

If you don’t see the necessary subject, paper type, or topic in our list of available services and examples, don’t worry! We have a number of other academic disciplines to suit the needs of anyone who visits this website looking for help.

How to ...

We made your life easier with putting together a big number of articles and guidelines on how to plan and write different types of assignments (Essay, Research Paper, Dissertation etc)