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Datamatrix - Transportation

Suite 708

TRANSPORTATION


Transportation requirements
Pros and Cons of different modes of Transport
Use of Carriers or your own Vehicles

Please note that the information provided herein is not intended to be absolute. It is a compilation of information which has been harmonized to adhere to the foundation of principles as put forth by The UN, the United States and the Commonwealth so it is important that you should check current details with your particular government.

708.01 TRANSPORTION REQUIREMENTS

Each business has its own particular transport needs. These depend on the nature of the business and the type of products or services it buys and sells.

Things to consider

When deciding which type of transport meets your business needs, there are several factors you may want to take into account.

What you want to transport

Consider the nature of the products you need to distribute. Are they perishable, dangerous, or expensive?

If you are transporting perishable goods such as food, then clearly speed is of the essence. You may also wish to consider specialised refrigerated transport.

Hazardous goods such as chemicals and waste in transit must meet certain requirements.

When transporting people or live animals you will need to gauge the volume expected to ensure your transport has an appropriate capacity and meets health and safety standards.

Frequency and timing of deliveries

Your goods or services may need to go to single or multiple destinations in the world.

You need to decide:

  • If you will deliver daily, monthly etc
  • Whether you want the delivery capacity to be 24-hour
  • Whether you can predict the dates and times you'll need to distribute your goods.
  • How much control you want over the timing of your deliveries, e.g. whether train timetables fit in with your requirements.
  • How quickly you want goods to reach their destination

Costs

The cost of transporting goods varies depending on the type of transport you use. Transporting goods by plane or courier tend to be the most expensive methods per unit, but can be the fastest. Using trains, ships or the post can be more cost-effective, but not always practical, especially if the goods are perishable. Email is another cost-effective delivery method but is limited to electronic files and data.

708.02 PROS AND CONS OF DIFFERENT MODES OF TRANSPORT

When deciding which method of transport to use, you need to weigh up the advantages and disadvantages of each.

Depending on the distance, destination, volume and type of goods you deliver, if you want to transport goods directly from door-to-door, you can choose between different types of road transport, such as bikes, cars, vans or trucks or use alternatives such as rail, air, sea or electronic delivery.

_________________________________________________________

Method
      Advantages                                      Disadvantages
________________________________________________________________

Road         Cheap, convenient, flexible,                 Noisy, pollutes the environment,
                 Private                                                   less safe than alternatives, stressful
                                                                                For drivers, potential delays, can be
                                                                                Expensive where there are road charges

Rail            Fast, safe, more environmentally        Limited routes, inflexible routes and 
                  Friendly than alternatives, does          timetables, expensive, sometimes
                  Not add to congestion                          unreliable

Air              Fast for long distance deliveries,       Expensive, unsuitable for some goods,
                  Safe                                                       limited routes, inflexible timetables, 
                                                                                Airport taxes

Sea            Cheap for large volumes                     Very slow, relatively few ports, 
                                                                                Routes and timetables, port duty/taxes 
                                                                                Requires inland transportation for door-
                                                                                To door delivery

Courier       Fast, reliable, secure                          Expensive, weight of deliveries is Ltd.

Electronic   Instant, cheap, for international       Insecure due to viruses and hackers, 
                    deliveries                                              limited to certain goods and services.

________________________________________________________________

Transport licences

You may need to apply for a Large Goods Vehicle (LGV) licence if you want to drive vehicles over 3,500 kilograms. Even if you do not drive the vehicle and one of your employees is the driver you are still classified as a user. This means you need to apply for a licence.

If you carry passengers for hire or reward you may need to apply for a Public Service Vehicle (PSV) licence.

If you or one of your employees needs to drive a minibus or van you may need to apply for a Passenger Carrying Vehicle (PCV) licence.

You may require special licences for transporting chemicals, livestock and hazardous materials.

Insuring your transport

If you or your employees use a vehicle for work, then by law you must take out motor insurance. Even if you use your own car, a private policy is not sufficient. It may even be invalidated if you use your vehicle for business purposes.

Your policy must cover:

  • All vehicles owned by your business
  • Any employees' vehicles used for business
  • Fleet vehicles

708.03 USE OF CARRIERS OR YOUR OWN VEHICLES

There are three main ways of acquiring the use of vehicles. You can:

  • Buy your own vehicles outright
  • Hire purchase or lease them
  • Use a courier or distributor to move your goods.

The most cost-effective choice for your business depends on the amount and frequency of the goods you deliver. Don't buy you own vehicles if they will sit idle for most of the time, or are half empty when on the road. You need to balance this factor with any tax breaks you may miss out on. You can read about tax breaks related to company cars on your governments Customs tax website.

If you produce certain goods, e.g. very fragile ones, making sure that they reach your customer in one piece may be your priority. Your goods may be insured when a carrier transports them, but this may not compensate you for losing a customer if their goods arrive in pieces.

If your business places particular emphasis on customer service or prompt delivery, then owning your own vehicles may be the best way to meet these commitments. If you want flexibility and control over when you transport goods, and want the ability to dispatch goods at a moment's notice, then owning your vehicles makes business sense.

You need to check the licences of all your drivers. You must advise your insurers of any serious motor convictions or your insurance will be invalid.

As well as the upfront vehicle costs, there are extra costs to take into account before making the final decision, such as vehicle licences, employee training and fuel and insurance costs.

Leasing vehicles is an alternative. It gives you more control over transporting your goods than using carriers, and allows you to minimise costs by hiring vehicles only when you need to.

If you operate your own vehicles, your drivers will be subject to the Road Transport (Working Time) Regulations2005 (UK). This means that drivers are allowed to work a maximum of 60 hours in a single week and no more than an average of 48 hours a week. This is normally calculated over 17 weeks.

Carriers can be more expensive but provide a more complete transportation service, logistics providers, for example, can manage the entire process for you, including organising any documentation that is needed.

Training

Identify your needs and getting your transport organisation right is challenging. If you import or export goods, it can become even more complicated.

If handling transportation is a substantial part of your business activities, it may be a good idea to take courses on subjects such as;

  • Freight regulation and control
  • Transport operation and management
  • Transport policy
  • Supply-chain management
  • Economics and finance

Using carriers to transport your goods

If you decide to use a carrier, there are several options to consider.

Couriers specialise in the speedy and secure delivery of small goods and packages. They deliver nationally and internationally. They only deliver goods up to a certain weight.

Haulers will collect goods from your premises and deliver them too your chosen destination by road. This may prove expensive if your goods don't fill up an entire vehicle, such as van or a truck.

Freight forwarders specialise in “consolidation”. This means they combine your goods with other consignments in a single container or vehicle, reducing the costs. They generally offer related services, e.g. organising the paperwork for exports.

Logistics providers manage the entire transportation process, tracking goods and organizing any documentation needed. They can also provide warehousing and local distribution centres if necessary.

When choosing a carrier, you need to consider:

  • Their experience handling similar products to yours
  • Their experience in the modes of transport you wish to use
  • Cost and extra charges
  • Delivery schedules
  • Their location
  • Whether they offer national and international coverage
  • Whether they provide insurance
  • Membership of trade associations and professional bodies
  • Word of mouth recommendations

You will find a full range of useful training courses on the Chartered Institute of Logistics and Transport website.

http://www.iolt.org.uk/pages/traincourse

CANADA

The following link provides information on the Government of Canada:

http://www.canada.gc.ca/depts/major/depind_e.html

The following link provides information on the individual Provinces.

http://bsa.cbsc.org/gol/bsa/interface.nsf/vSSGBasic/su10000e.htm

IRELAND

The Government of Ireland Official Gateway

http://www.irlgov.ie/

Irish local government Council websites:

http://www.oultood.com/localgov/eire.htm

AUSTRALIA

Australian Commonwealth Government Gateway

http://www.australia.gov.au/

General Information

http://gov.info.au/

Federal, State and Local Government

http://www.nia.gov.au/oz/gov/

UNITED KINGDOM

United Kingdom Government site:

http://www.hse.gov.uk/

NEW ZEALAND

The Government of New Zealand Gateway

http://www.govt.nz/

The E-Government site for New Zealand

http://www.e.govt.nz/

Note: Although this site is a compilation of information from various countries we would like to particularly acknowledge the support of the United Nations, FirstGov of the United States Government and Business Link of the United Kingdom for the use of their text which is provided by permission and protected by their individual copyrights. A more complete list of acknowledgements with their official links can be accessed in this site through: Acknowledgements

AID TO BUSINESS
FLOOR 1
GOING INTO BUSINESS?
STARTING A BUSINESS
ESSENTIAL TO STARTING
SELECTING A COMPANY STRUCTURE
FLOOR 2
BOOKS AND ACCOUNTS
NEW PRODUCTS & SERVICES
DEFINING PRODUCT AND COMPANY
FROM PRICING TO TRADE SHOWS
FLOOR 3
MARKETS & MARKETING
MARKETING CHANNELS
E-COMMERCE
MARKETING YOUR WEBSITE
FLOOR 4
CREATING A BUSINESS PLAN
FINANCIAL PAGES
ANALYZING COMPANY REPORTS
SECURING CAPITAL
FLOOR 5
CORPORATIONS AND THE LAW
PURCHASE OF AN ENTERPRISE
VALUATION PRINCIPLES
VALUATION OF FINANCIALS
FLOOR 6
LAND & PROPERTY ISSUES
PROPERTY TRUSTS
CONTRACTS AND LETTER OF INTENT
GLOSSARY OF LAND & PROPERTY TERMS
FLOOR 7
OPERATION OF A BUSINESS
HEALTH & SAFETY
STOCK AND INVENTORY CONTROL
TRANSPORTATION
FLOOR 8
CONSUMER PROTECTION
ENVIRONMENT, HEALTH AND SAFETY TERMINOLOGY
POLLUTION, EFFLUENT & WASTE MANAGEMENT
REGULATORY BODIES
FLOOR 9
EMPLOYING PEOPLE
RESPONSIBILITIES OF AN EMPLOYER
EMPLOYMENT STATUS
THE EMPLOYER/LABOR AND THE LAW
FLOOR 10
GROWTH AND EXPANSION
JOINT VENTURE AGREEMENT
PARTNERSHIP AGREEMENT
CONFIDENTIALTY AGREEMENT
FLOOR 11
ACQUISITIONS & MERGERS
SALE OR LIQUIDATION
AGREEMENT TO SELL BUSINESS
BILL OF SALE OF BUSINESS
FLOOR 12
COPYRIGHTS AND PATENTS
TAX OVERVIEW
GLOSSARY OF BUSINESS TERMINOLOGY 1
GLOSSARY OF BUSINESS TERMINOLOGY 2

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