Transportation & Distribution Management
Water Carriers Cost Structure - โโ-high variable costs (85%)
-low fixed costs (15%)
Water Carrier Variable Costs - โโ-user charges (lock fees, dock fees, fuel taxes) are variable in nature
-not labor-intensive
-major variable expenses are line-operating costs, operating rents, & maintenance
Water Carrier Fixed Costs - โโ-low fixed-cost structure can be attributed in part to public aid in
construction & maintenance of waterways
-fixed costs include depreciation and amortization and general expenses
Strengths of Water Carriers - โโ-low cost transport service for large volumes over medium to long
distances
-relatively large carrying capacity
-fuel efficient
Weaknesses of Water Carriers - โโ-speed of service (slowest mode for dry cargoes)
-vulnerable to ice, flood, drought conditions
-accessibility limitations
-packing requirements for high-value goods
Main Commodities of Water Carriers - โโ-dry bulk items
-bulk petroleum, petroleum products & chemicals
Water Carriers Intermodal Competition (heavy) - โโ-pipeline (vigorous)
-railroad
-trucks
