Decision Areas for Transporters

The Important objectives if a carrier are to manage its operations effectively and efficiently , and to provide better consumer services . The important areas that require management's attention can be summarized as pricing and negotiations , routing and scheduling , service offering  ( including fleet mixed) , amidst a scenario of competition and required marketing activities .
 For this these are the decision areas for Transporters .

1) Pricing and Negotiation :-  Pricing of transportation services could be mainly cost - based or based on the value provided to the customer and the customer's ability to pay ( as in the case of private trucking operators)  . In any case , a knowledge of cost involved in providing the service is essential .
   There are several useful ways of looking  at costs associated with transportation operations . One way is to separate the total costs into the following components .

a)   Direct Costs :
b)  Indirect Costs :

Another useful ways to think of cost is in term of

a)  Fixed Costs :
b)  Variable Costa :
c)  Semi Variable Costs :

For system of negotiation to be successful , the following conditions should also hold :

-----  Existence of a simple rating system which is easily understandable and applicable . This rating system should be based on a uniform method for all the shipper's/receiver's location  and commodities .
------ Price stability for the shipper for an established period of time .
------ Volume stability for the shipper for an established period of time .
------ Simplifies freight bill payment .
------ Ability to integrate with electronic data interchange system and computerized rating and auditing .

2)  Routing and Scheduling :-   In general , the benefits of a carrier  by improving routing and scheduling can be summarized as :

-----   Greater vehicle utilization .

-----   Improved the more consistent customer service  .

-----   Reduced transportation expenses .

-----   Reduced capital investment in equipments .

-----   Increased competitive advantage .

Carriers are becoming more and more sophisticated in these areas ,


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