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Transportation Features and Modes

A key objective of product distribution is to get products into customers’ hands in a timely manner. While delivery of digital products can be handled in a fairly smooth way by allowing customers to access their purchase over the Internet (e.g., download software, gain access to subscription material), tangible products require a more careful analysis of delivery options in order to provide an optimal level of customer service. But as we noted earlier, “optimal” does not always translate into fastest.

In terms of delivering products to customers, there are six distinct modes of transportation: air, digital, pipeline, rail, truck, and water. However, not all modes are an option for all marketers. Each mode offers advantages and disadvantages on key transportation features that include:

• Product Options - This feature is concerned with the number of different products that can realistically be shipped using a certain mode. Some modes, such as pipeline, are very limited in the type of products that can be shipped while others, such as truck, can handle a wide-range of products.
• Speed of Delivery - This refers to how quickly it takes products to move from the shipper’s location to the buyer’s location.
• Accessibility – This transportation feature refers to whether the use of a mode can allow final delivery to occur at the buyer’s desired location or whether the mode requires delivery to be off-loaded onto other modes before arriving at the buyer’s destination. For example, most deliveries made via air must be loaded onto other transportation modes, often trucks, before they can be delivered to the final customer.
• Cost – The cost of shipment is evaluated in terms of the cost per item to cover some distance (e.g., mile, kilometer). Often for large shipments of tangible products cost is measured in terms of tons-per-mile or metric-tons-per-kilometer.
• Capacity – Refers to the amount of product that can be shipped at one time within one transportation unit. The higher the capacity the more likely transportation cost can be spread over more individual products leading to lower transportation cost per-item shipped.
• Intermodal Capable – Intermodal shipping occurs when two or more modes can be combined in order to gain advantages offered by each mode. For instance, in an intermodal method called piggybacking truck trailers are loaded onto railroad cars without the need to unload the trailer. When the railroad car has reached a certain destination the truck trailers are off-loaded onto trucks for delivery to the customer’s location.

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