THE ROLE OF TRANSPORT IN THE LOGISTICS STRATEGY

Transport is one of the main logistics functions. In addition to representing the largest share of logistical costs in most organizations, it plays a fundamental role in the performance of several dimensions of Customer Service. From the point of view of costs, it represents, on average, around 60% of logistics expenses, which in some cases can mean two or three times the profit of a company, as is the case, for example, in the distribution sector of fuels.

The main functions of transport in Logistics are basically linked to the dimensions of time and place utility. Since the beginning, the transport of goods has been used to make products available where there is potential demand, within a timeframe suited to the needs of the buyer. Even with the advancement of technologies that allow the exchange of information in real time, transport remains fundamental for achieving the logistical objective, which is the right product, in the right quantity, at the right time, in the right place at the lowest possible cost. .

Many Brazilian companies have been seeking to achieve this goal in their operations. With that, they see in Logistics, and more specifically in the transport function, a way to obtain a competitive advantage. Among the initiatives to improve transport activities, we highlight the investments made in information technology that aim to provide companies with better planning and control of the operation, as well as the search for intermodal solutions that allow a significant reduction in costs. There are countless examples of companies with initiatives of this type, notably Souza Cruz, Coca-Cola, Alcoa, OPP-Trikem, Brahma, Martins, Dow Química, among others.

Throughout this article, the transport function will be treated initially from the perspective of integration with other logistics functions. Then, the five different types of modes will be classified from the perspective of costs and service. Issues that make the Brazilian transport matrix unbalanced will also be addressed. The article ends with a discussion on the impacts that information technology, more specifically the Internet, has been causing in transport management.

2. INTEGRATION WITH OTHER LOGISTICS FUNCTIONS

One of the main pillars of modern Business Logistics is the concept of Integrated Logistics, which is represented in Figure 1. Through this concept, logistics functions are no longer seen in isolation and are now perceived as an operational component of the Marketing strategy. As a result, transport plays a fundamental role in various strategies in the logistics network, making it necessary to generate solutions that allow flexibility and speed in responding to the customer, at the lowest possible cost, thus generating greater competitiveness for the company.

Among the main trade-offs that affect the transport function, those related to Inventory and Customer Service stand out.

Transport x Stock

Central to this trade-off is the relationship between transport and inventory policies. Within a non-integrated view, the inventory manager commonly has the objective of minimizing inventory costs, without analyzing all logistical costs. This type of procedure has a negative impact on other logistical functions, such as, for example, production that needs greater flexibility (with smaller and more frequent batches, causing higher costs) and transport management characterized by more fractioned transport, generally increasing the unit cost of transport. It is important to make it clear that this policy may be the most appropriate in situations where time-based strategies are used, such as JIT, ECR, QR. These strategies aim to reduce inventory from an integrated view of Logistics, demanding the necessary speed and consistency from the transport function to meet batch sizes and delivery times. In addition, in many cases the delivery must be carried out within a time window that can be one shift or even an hour.

Another important issue linked to this trade-off is associated with the choice of modes. Depending on the modal chosen, the transit time may vary in days. For example, a typical transport from São Paulo to Recife by road takes around 5 days, while by rail it can be done in about 18 days. The choice will obviously depend on the level of service desired by the customer, and on the costs associated with each option. The total cost of this operation must include all costs related to door-to-door transport plus inventory costs, including inventory in transit. For products with higher added value, it may be interesting to use more expensive and faster modes.

Transport x Customer Service

Customer Service is a fundamental component of Integrated Logistics. All of the logistical functions seen in Figure 1 contribute to the level of service a company provides to its customers. The impact of transport on Customer Service is one of the most significant and the main demands of the market are generally linked to the punctuality of the service (in addition to the travel time itself), the ability to provide a door-to-door service; flexibility, with regard to handling a wide variety of products; managing the risks associated with theft, damage and breakdowns and the ability of the carrier to offer more than a basic transport service, becoming capable of performing other logistical functions. The answers to each of these requirements are linked to the performance and characteristics of each mode of transport, both in terms of its structural dimensions and its cost structure.

3. CLASSIFICATION OF TRANSPORT MODES

The five basic modes of transport are rail, road, water, pipeline and air. The relative importance of each mode can be measured in terms of the system's mileage, traffic volume, revenue and the nature of the traffic composition. Table 1 summarizes the fixed-variable cost structure of each mode, while Table 2 classifies the operational characteristics of each mode in terms of speed, availability, reliability, capacity and frequency. These characteristics will be discussed below.

Speed ​​refers to the elapsed time of movement on a given route, also known as transit time, with air modal being the fastest of all.

Availability is the ability of a modal to serve any origin-destination pair of locations. Road transport companies have the greatest availability since they can go directly to the points of origin and destination, characterizing a door-to-door service.

Reliability refers to the potential variability of expected or advertised delivery schedules. Pipelines, due to their continuous service and the restricted possibility of interference due to weather conditions and congestion, occupy a prominent place in the reliability item.

Capacity refers to the ability of a transport mode to handle any transport requirement, such as size and type of cargo. Transport carried out by sea/river is the most suitable for this task. The final classification refers to the frequency, which is related to the number of programmed movements. Once again, pipelines lead the frequency item due to their continuous service performed between two points.

As illustrated in Table 2, the preference for road transport is partly explained by its high ranking on all five characteristics. Road hauliers operating world-class road systems rank first or second in all categories except capacity.

In Brazil, there are still a series of barriers that prevent all modal, multimodal and intermodal alternatives from being used in the most rational way. This is a reflection of the low level of investment seen in recent years in terms of conservation, expansion and integration of transport systems. Despite initiatives such as the Brasil em Ação plan and the privatization process of ports and railways, little has changed in the Brazilian matrix, as can be seen in table 3. as is the case with commodities for export.

4. IMPACTS OF THE INTERNET ON TRANSPORT

The Internet as well as other information technologies have not only generated specific needs, but also created new opportunities for planning, controlling and operating transport activities. Among these needs and opportunities, we could mention the growing demand for more pulverized deliveries, the emergence of transport portals and the potential for tracking vehicles in real time.

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• Direct delivery from manufacturers

Through the Internet, it became possible for manufacturers of high added value products, such as computers, to sell directly to consumers, eliminating the need for intermediaries such as distributors and retailers from the supply chain. Previously, the transport of products between manufacturers and their main customers was marked by greater concentration and stability in shipments, since the customers' destinations were known and they sought to periodically renew their stocks. In the US, Gateway and Dell dominate the market for direct sales of personal computers over the Internet. The distribution of these computers is carried out by carriers that have a high degree of penetration in different markets. In transport management, more and more companies that carry out a highly dispersed distribution are looking for systems such as routing machines to help them in structuring routes. Transport is marked by a short transit time and great flexibility in delivery, normally made between 1 and 2 days.

Emergence of transport portals

The Internet is also providing the emergence of new virtual businesses related to the purchase and sale of freight. In fact, Internet portals are being structured to mediate between carriers and shippers. This type of business model is characterized by contracting spot transport. As a result, the portal makes it possible to articulate a shipper's need for transport, characterized by origin, destination and type of shipment, with the available offer. In other words, the portal is looking for a carrier that is interested in transporting cargo, while trying to obtain the best conditions for the shipper.

Traceability of shipments

One of the great advantages that the Internet offers in improving the quality of service is the possibility of tracking shipments. Courier companies, shipping agencies, road and rail transporters and logistics operators are increasingly using the Internet to provide the status of shipments to their customers. Fedex, one of the largest American couriers with sales exceeding US$ 13 billion, structured a highly sophisticated order tracking system in the early 90s, recently benefiting from the ease that the internet provides. Similarly, Brazilian companies, such as Varig Cargo, are also making information about the status of cargo available via the internet.

5. CONCLUSION

This article addressed the impacts of the transport function on companies and the economy of countries with a relative degree of development. Specifically in the business environment, the relationships between transport and other logistics functions were explored: inventories and customer service. Then, in terms of fixed and variable costs and dimensions of the logistical service, the characteristics of the five main modes of transport were explored: road, rail, air, pipeline and waterway. In Brazil, despite initiatives such as the privatization of ports and railways, the road modal is still dominant in the transport matrix. This fact, depending on the characteristics of the product, can be an impediment to achieving a higher level of competitiveness in terms of cost. Finally, the main impacts generated by the advent of new information technologies, especially the Internet, on the management, planning and operation of transport were commented on.

6. BIBLIOGRAPHY
7. BOWERSOX, DJ, CLOSS, DJ 1996, Logistical Management – ​​The Integrated Supply Chain Process, 1st ed, McGraw-Hill.
8. CHRISTOPHER, M., 1997, Logistics and Supply Chain Management – ​​Strategies for Cost Reduction and Service Improvement, 1 ed. São Paulo, Pioneira Publishing House.
9. LAMBERT, DM, STOCK, JR, ELLRAM, LM, 1998, Fundamentals of Logistics Management, 1st ed. New York, Irwin-McGraw Hill.

Author Peter Wanke, Paulo Nazario and Paulo Fernando Fleury