(a) What is transportation? (b) Explain dead freight. (c) List and explain five factors that will determine a seller's mode of transportation.

Answer Details

(a) What is transportation?

Transportation is the movement or carriage of goods and people from one place (where they are produced or located) to another place (where they are needed or consumed), using means such as road, rail, water, air and pipeline. It creates place utility by bridging the gap between producers and consumers.

(b) Dead freight

Dead freight is the sum of money paid to a shipping company by a person who has hired space in a ship but fails to fill it with the full quantity of goods agreed. He is charged for the unused (empty) space that he reserved but did not occupy.

(c) Five factors that determine a seller's mode of transportation

1. Nature of the goods: perishable, fragile or bulky goods call for a suitable means of carriage.
2. Cost of transport: the seller compares freight charges and selects the cheapest suitable means.
3. Speed/urgency: where delivery is urgent, a faster means such as air is chosen.
4. Distance and destination: long or overseas journeys need ship, rail or air; short distances suit road.
5. Safety and value of the goods: valuable goods are sent by a means that offers greater security against damage or theft.