Basic Marketing: A Global Managerial Approach

Perreault−McCarthy: Basic

Marketing: A

Global−Managerial

Approach, 14/e

12. Distribution Customer
    Service and Logistics

Text © The McGraw−Hill

Companies, 2002

344 Chapter 12

Inland waterways (such as the Mississippi River and Great Lakes in the United

States and the Rhine and Danube in Europe) are also important, especially for bulky,

nonperishable products such as iron ore, grain, steel, petroleum products, and gravel.

However, when winter ice closes freshwater harbors, alternate transportation must

be used. Some shippers—such as those moving iron ore—ship their total annual

supply during the summer months and store it near their production facilities for

winter use. Here low-cost transporting combined with storing reduces totalcost.

Pipelines are used primarily by the petroleum industry to move oil and natural

gas. So pipelines are important both in the oil-producing and oil-consuming coun-

tries. Only a few major cities in the United States, Canada, Mexico, and Latin

America are more than 200 miles from a major pipeline system. Of course, the

majority of the pipelines in the United States are located in the Southwest—con-

necting the oil fields and refineries. From there, the more flexible railroads, trucks,

and ships usually take over—bringing refined and graded products to customers.

The most expensive cargo transporting mode is airplane—but it is fast! Airfreight

rates are on average three times higher than trucking rates—but the greater speed

may offset the added cost. Trucks took the cream of the railroads’ traffic. Now air-

planes are taking the cream of the cream.

High-value, low-weight goods—like high-fashion clothing and parts for the elec-

tronics and metal-working industries—are often shipped by air. Perishable products

that previously could not be shipped are now being flown across continents and

oceans. Flowers and bulbs from Holland, for example, now are jet-flown to points

all over the world. And airfreight has become very important for small emergency

deliveries—like repair parts, special orders, and business documents that must be

somewhere the next day.

The growth of airfreight has
made it easier and faster for
firms to serve customers in
foreign markets.

Internet Exercise A firm that is just starting to export to international mar-

kets may want help figuring out what shipping services are available. The

North Carolina Ports Authority’s website (www.ncports.com) helps provide

such information. Go to the website, select Ports Directory,and review the

different firms and agencies that might be able to provide you with help if you

had to ship a large quantity of furniture to the Middle East. Identify an organi-

zation from those listed that you might want to contact first, and indicate why.

Internet

Inland waterways are
important too

Pipelines move oil
and gas

Airfreight is expensive
but fast and growing