There is little doubt the least glamorous and most underappreciated roles in marketing are the ones undertaken by those responsible for product distribution. While transportation decisions are likely not something that first comes to mind when someone thinks about marketing, these are, nonetheless, extremely crucial for two key reasons. First, transportation decisions affect when customers can obtain products. Any delay in delivery could frustrate customers leading them to cancel orders and instead purchase from competitors. Second, costs associated with product delivery are almost always passed on to the final customer. Thus, poorly selected delivery methods can lead to higher prices resulting in a less competitive product offering.
As we note in our Managing Product Movement tutorial, there are several modes for transporting products including truck, air, railroad and water. Of these main modes, water often offers marketers the lowest cost for transporting product. Of course, there is a tradeoff here ? using a ship to transport product means slower delivery compared to other modes. This tradeoff between cost and speed may seem like a hard decision and for some companies it is. However, when it comes to transporting products from overseas, especially bulky products, water is the only real option.
This leads us to this story from National Public Radio. The story discusses a new cargo ship that is remarkable in its size. Among the ship’s impressive specs are these: it is 240 feet tall (20 stories), 1,300 feet long (over 4 football fields) and 200 feet wide. But the most mind-boggling statistics is that is can carry over 18,000 shipping containers that, if laid end to end, would stretch nearly 70 miles!
With this type of capacity, the per-unit cost of shipping products must be markedly lower than using ships with less capacity. Of course, with a ship of this size there are other issues including available docking space in the world’s ports. Yet, as the story discusses, it is expected that ports around the world will expand in order to accommodate ships of this size.