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In today’s global economy, products are seldom produced and consumed at the same location. A product manufactured at one location has very little value to the prospective customer unless it is made available at the point of consumption. Through globalization, international trade is a phenomenon and growing market share in emerging markets is highly desirable for any company to prosper and thrive. From an end to end supply chain management viewpoint, Logistics Management focuses on how and when to get raw materials, intermediate products, and finished goods from their respective sources to their destinations.

Although linking businesses and customers via e-commerce transactions and the Internet is much easier, the physical delivery of goods relies on effective management of the transportation system. Efficient, cost-efficient transportation management can be a real point of competitive distinction for a company and in order to achieve this, an enterprise must lay the foundation for a responsive and economical transportation operation. This allows companies to cut costs, implement strategic changes and improve customer service levels without disrupting the overall supply chain flow.

With ever-changing factors affecting business operations around the world, an organization needs to be flexible in adapting to the changes and constantly aligning its strategies and operations. Changes in the supply chain network such as raw material availability, product demands, storage location capacities, logistics service availability, etc. are critical for any organization to respond to maintain the business stable and secure. A responsive transportation network allows the business to lower-cost areas without affecting customer service levels, because any uncertainty within the network can be monitored and appropriately managed to keep the business risks lowest.

The first step in making transport operations economical is to recognize transportation as a strategic function rather than a source of cost and risk. According to the studies, transport accounts for approximately 30 percent of total logistics expenditure, which is equal to the total amount of inventory and warehousing. Lately, transportation has been recognized by logistics managers as a strategic driving force ensuring cost savings and creating value within the supply chain. Sophisticated tools supported by cutting-edge technology for tracking, controlling and optimizing transportation operations help to make transport operations efficient and cost-effective.

Transportation management assumes comprehension of a company’s geographical scope and relationships reflecting the association of a company regarding the sources of their materials, operated markets, and rivals. It functions as a strategic link between geographically divided units in the internal organization of a business (including warehouses and plants) and between external units (including suppliers and customers).Good transport management is closely linked to inventory planning, market forecasting and storage and delivery of goods. These interconnections provide efficient logistics management that optimizes all activities and minimizes the costs involved.

A consumer-driven economy forces companies to deliver a wide choice of competitive products that need the conversion of resources into practical goods and their intensive distribution. This is why strategic positioning of transportation is important for corporate performance and therefore it requires proper management throughout the supply chain system.

Effective management of transportation and establishing strategic links and partnerships with suppliers and customers has a direct influence on cost, market, location, and delivery decisions. When carefully planned, transportation can be a leading competitive strategy for a firm. The ultimate objective is to minimize costs and maximize efficiency which is the business logistics intent.