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Delivery Systems. Overview Why transport is important? Types of delivery system Factors to be considered when choosing a delivery system Modern developments.

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Presentation on theme: "Delivery Systems. Overview Why transport is important? Types of delivery system Factors to be considered when choosing a delivery system Modern developments."— Presentation transcript:

1 Delivery Systems

2 Overview Why transport is important? Types of delivery system Factors to be considered when choosing a delivery system Modern developments in delivery systems Calculating delivery costs

3 Why is transport important? A good transport system is important to business: To deliver raw materials to the manufacturer To deliver finished goods to retailers To transport workers to their jobs To transport goods abroad

4 Types of delivery systems Road Rail Sea Air Pipeline Canal

5 Road Advantages Fast over short distances Door-to-door deliveries (entire country is accessible) Minimum handling Flexible, convenient and cheap – operates 24 hours a day Disadvantages Congestion/poor roads – delays Bad weather – delays Not suitable for bulky goods Slow over long distances Cost of drivers, tax and insurance is high

6 Rail Advantages Fast over long distances Suitable for bulky goods Reliable Cheap for bulky goods Can carry containers and chemicals Not affected by weather and traffic congestion Railways service the main ports – important for firms that export Disadvantages Not flexible – fixed timetable Lot of handling – other methods of transport to and from the station are needed Fixed routes Expensive over short distances Not every city/town is served by a railway station

7 Lack of integrated rail network throughout the country

8 Sea Advantages Suitable for bulky goods Large cargos can be carried Cheaper than air Suitable for containers Good facilities at ports Modern ships – large loads Disadvantages Slow over long distances Weather conditions – delays Not flexible – fixed timetable Must link with other forms of transport High insurance costs

9 Types of ship Cargo ships (LO-LO) Ferries (RO-RO) Tramp ships

10 Container ships

11 Air Advantages: Fast Suitable for perishable goods and goods needed urgently Good safety record Less packing – reduced cost Modern aircraft – large loads Less likelihood of damage/theft Good network of regional airports Disadvantages Expensive Bad weather – delays Must link with other forms of transport Not flexible – fixed timetable Not suitable for bulky goods

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14 Pipeline Advantages: Safe Cheap to maintain Disadvantages: Expensive to install Suitable only for liquids or gases

15 Canal Man-made waterway Not commonly used in Ireland, except as a tourist attraction Used extensively in Europe Famous canals: Amsterdam, Venice, Suez, Panama

16 Ship canals may be used to link major cities with sea ports, e.g. Manchester linked with Liverpool

17 Suez Canal Joins the Red Sea and Mediterranean Sea in Egypt

18 Panama Canal Connects the Caribbean Sea to the Pacific Ocean 50 miles long

19 Factors affecting choice of delivery system Cost –Delivery adds to the selling price of goods Reliability –The system should be punctual. A delay in delivery could cause a delay in production for “just-in-time” Convenience –Delivery should be available when required Speed/Type of goods –Very important for perishable goods (e.g. fresh fish) and urgently needed supplies (e.g. medicine) Distance –The distance between the buyer and seller can mean a number of transport methods must be used

20 Modern Developments in Transport Containers Refrigeration Tachograph Euro Tunnel Toll roads/toll bridges Quality Bus Corridors (QBC)

21 Containers Large metal boxes of standard size Minimum handling of goods required once sealed in the container Small firms may share a container to reduce costs

22 Refrigeration Refrigerated containers are used for transporting perishable goods, e.g. meat, fish, etc.

23 Tachograph An instrument installed in the cab of a truck/lorry that measures the hours (and speed) driven as well as the breaks taken by the driver

24 Euro-Tunnel The Euro-Tunnel linking Folkestowe in England with Calais in France was opened in 1993 This provides a regular, fast rail link between the UK and mainland Europe

25 Quality Bus Corridors Special lanes that buses can use to provide a quicker and more effective service Public transport becomes more attractive because it will be quicker and more punctual

26 Toll roads/Toll bridges Built by private firms who charge a fee for their use

27 RO-RO & LO-LO

28 Calculation of Delivery Cost Distance travelled each day is 740km The diesel van can travel 34km per litre The cost per litre of diesel is €1.05 Mark Hennessy, the driver is paid €200 per day Employer’s PRSI is 12.5% of gross pay Annual motor tax is €1,300 Annual motor insurance is €2,275 Annual motor repairs are €1,300 Toll charges are €20 per day Brady Ltd., a fruit and vegetable wholesaler which operates 325 days a year supplies the following information: Calculate the total cost of transport for one day

29 Solution FIXED COSTS€€ Annual motor tax1,300 Annnual motor insurance2,275 Annual motor repairs1,300 Total fixed costs4,875 Daily fixed costs4,875/32515 FUEL COSTS Distance travelled per day740 Divide by kilometres per litre37 Daily fuel used20 Cost per litre20 x OTHER VARIABLE COSTS Driver's wages200 Employer's PRSI (USC)25 Toll charges20245 TOTAL COST FOR ONE DAY281

30 Review and Recap Why transport is important? What are the different common types of delivery system? What factors need to be considered when choosing a delivery system? List and explain four modern developments in delivery systems Explain how a business calculates delivery costs


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