Sourcing goods from around the world and offering them to customers at competitive prices can only make economic sense if there are cost effective ways of bringing them to market. Logistics plays a vital part in achieving the efficient supply of goods to retail outlets.
In the supply and retail area, sales are subject to seasonal demand variations, congestion on the roads, the weather or the need to be first in the market place. (In the 19th century, the tea clippers arriving first at London could command higher prices before the rival ships arrived and the market saturated). Goods in transit represent a cost to the supplier and the cost of time is important.
With increasing congestion on roads, there is concern to reduce the number of road miles travelled, and bring into play alternate modes of distribution (rail, coastal shipping, inland waterway).
Reverse Logistics are equally important. Too many lorries run their return journeys empty. container ships return to the Far East carrying waste paper.
According to Jacques Barrot, Vice President of the European Commission and Transport Commissioner, transport logistics represents an effort of about 1000 B Euros per year. The final cost of products includes between 10% and 15% costs due to logistics.