Role of Transportation in Logistics: Boosting Supply Chain Efficiency
Published on July 23, 2025
• 7 min read
The supply chain is incomplete without transportation, as it is one of the three essential components. The world is changing rapidly, thanks to globalisation and technological advancements. Transportation and logistics in the supply chain are also affected by it. Between 2015 and 2020, there was an investment of US$ 10.2 trillion in infrastructure development to facilitate transportation and logistics. Whether it is a multinational company or an SME, it is necessary to understand the role of transportation and the changing trends, risks and challenges to develop strategies that ensure seamless supply chain management.
In today’s article, we will look at the role of transportation in logistics and supply chain management and how it can boost supply chain efficiency.
- Overview of Transportation In Supply Chain Management
- Role of Transportation in Logistics
- Transportation Management Systems – A Game Changer for Supply Chain Management
- Risks and Challenges in Supply Chain Transportation
- Strategies for Improving Transportation Efficiency in Supply Chain Management
- Boost Your Supply Chain Transportation With Solutions From WareIQ
- Conclusion
- FAQs on Role of Transportation in Logistics
Overview of Transportation In Supply Chain Management
A supply chain has three essential components: purchasing, manufacturing, and transportation. These components are interrelated and include several processes from start to end. Transportation interlinks the processes by facilitating the movement of raw materials from suppliers to manufacturing stations, the movement of goods from the manufacturing station to warehouses, and, ultimately, the movement of final goods from the warehouse to the end consumer.
Transportation efficiency impacts the supply chain’s overall performance, as it is involved in almost all processes, whether acquiring materials for production or delivering them to customers. Efficient transportation management is key to staying ahead of the competition and should be optimised to ensure smooth supply chain operations.
A case study shows that with a fast and responsive transportation system, Walmart boosted its supply chain operation to reduce costs and improve output.
Role of Transportation in Logistics
Transportation may seem simple from afar, but it significantly impacts the supply chain. The role of transportation in the supply chain is explained below:
1. Connect All Processes
Transportation is the bridge between all the supply chain processes from start to end. Without effective transportation between different methods, the raw materials/finished goods will not move efficiently, leading to delays and bottlenecks.
2. Supporting Just-in-time Delivery
Efficient transportation management has just-in-delivery (JIT) models that help in minimising waste and thus reduce inventory costs as well. It will also help streamline inventory management.
3. Improves Cost Effectiveness
Transportation costs make up a significant portion of an organisation’s total logistic costs. When transportation methods are optimised, expenses can be reduced, and reduced transportation costs can increase profitability, as research by McKinsey & Company shows.
4. Enable Smoother Supply Chain Functions
Transportation is integrated with other functions in a supply chain, such as order processing, warehousing and inventory management. Faster and better transportation can make different processes more efficient, making the supply chain more resilient.
5. Improved Customer Satisfaction
Effective transportation will make all processes time-efficient; hence, the customer will receive the products in less time, increasing customer satisfaction.
6. Facilitates Global Trade
Transportation can pave the way for global trade, as transporting goods beyond international borders is now possible with air and sea routes.
7. Adaptability to Changes
When transportation systems are flexible, supply chain functions can be adapted to changing market conditions, demands, supply shortages, and disruptions caused by unforeseen natural disasters.
Transportation Management Systems – A Game Changer for Supply Chain Management
Transportation Management Systems (TMS) are software platforms that can assist businesses in planning, executing, and optimising the transportation of goods for better supply chain operations. Considering the importance of transportation in the supply chain, here is how TMS helps in boosting supply chain performance:
Optimised Route planning
TMS uses high-tech features and algorithms and real-time data based on traffic patterns and weather conditions to find the most efficient and cost-effective shipping routes. This will reduce fuel costs and improve delivery speeds.
Better Load Consolidation
TMS helps consolidate various shipments into one when needed, reducing transportation costs as the number of trucks will be fewer.
Data-driven Decisions
TMS can help generate data insights about various aspects, such as carrier performance, shipping cost, delivery timelines, route updates, and tracking. It will help decide carrier selection, process improvements, and cost-cutting strategies.
Better Inventory Management
TMS allows visibility into shipment status, which can improve inventory planning and management and help avoid overstocking and stockouts.
Enhanced Collaboration
A TMS connects warehouses, carriers, shippers, and customers on one platform, facilitating better communication and faster issue resolution.
Risks and Challenges in Supply Chain Transportation
Even though there have been technological and infrastructural advancements which have considerably improved the transportation process in a supply chain, there are certain risks and challenges that will continue to arise:
- Infrastructural limitations can cause delays in transportation.
- Fluctuations in fuel prices can increase transportation costs.
- Labour shortages can cause delays in transporting goods from one place to another.
- Advanced technology in transportation will require drivers who can get accustomed to it. Drivers who are unable to adapt will result in a shortage.
Strategies for Improving Transportation Efficiency in Supply Chain Management
There is an urgency for improving the transportation for businesses to not only streamline the supply chain but also to stay ahead of the competition:
- Investing in a state-of-the-art transportation management system will provide real-time visibility, better inventory management, cost control and faster service levels.
- Using data analytics to make informed decisions will optimise various supply chain processes.
- Adopting multi-modal transportation can help optimise costs and save time.
- Having a trained staff will lead to safer operations and increased productivity.
- Using real-time tracking will offer more transparency and better communication.
- Having sustainable transportation will lead to a reduced carbon footprint and facilitate regulatory compliance.
Boost Your Supply Chain Transportation With Solutions From WareIQ
WareIQ is a Y-Combinator-backed eCommerce full-stack platform offering multi-channel fulfillment across D2C, Marketplaces, Quick Commerce, and B2B (General Trade & Modern Trade)
Our solution offers:
- Pan-India network of Seller Flex & FAssured compliant across 12+ cities operated by WareIQ and shipping partners for last-mile delivery across 27000+ pin codes
- Multi-Channel Fulfillment Platform with plug-and-play integrations across marketplaces (Amazon, Flipkart, Myntra, Nykaa, etc.), D2C platforms (Shopify, Magento, Woocommerce, etc.), WMS, and ERPs to support fulfilment across distributors, flagship stores and eCommerce channels with analytics capabilities to assess operational performance
- Inventory LogIQ: AI-led multi-channel inventory planning solution to minimise stockouts and automate replenishment
- Leverage the tech-enabled returns QC solution to capture, centrally store, and auto-index HD media evidence of damaged or missing returned products and eliminate marketplace claims rejections.
- A host of seller enablement and support – dedicated account manager, APOB/PPOB registrations, GST registration, NDR & COD verification, etc.
Also check – What is a Logistics Center? Definition, Types, Functions and Components of Logistics Distribution Hub in 2025
Conclusion
Role of Transportation in Logistics which has a significant impact. It connects several processes in a supply chain to ensure that the movement of goods is effortless from start to end. It helps facilitate trade on a global level, too. However, with changing times, it is essential to understand how to optimise transportation efficiency to reduce cost and improve the overall efficiency of a supply chain. Using a transportation management service (TMS) can be a game-changer, as it can help optimise route planning, better load consolidation, better inventory management and data-driven insights to boost productivity and profitability.
Suggested – Difference Between Transportation and Logistics
FAQs on Role of Transportation in Logistics
What are the main modes of transportation when it comes to logistics?
There are five modes of transport: rail, road, air, sea, and pipeline. These modes are selected depending on the type of product to be transported and the urgency.
What are some of the challenges faced in transportation logistics?
Challenges in transportation include regulatory compliance, fuel price volatility, labour shortages, and infrastructure limitations, as well as technological limitations.
What is a transportation management system (TMS)?
TMS is software that helps optimise the supply chain and the moment of goods with proper planning and execution of transportation processes.
Does transportation affect customer satisfaction?
Yes, when customers get on-time deliveries and estimated updates that they can rely on, it increases customer satisfaction and loyalty.
How does technology enhance transportation?
New technologies, such as GPS tracking or automated vehicles, have increased transportation’s accuracy, efficiency and visibility.
