An important aspect of the global supply chain is that of physical distribution and transportation mode choice. Transportation is one major factor to consider because it determines how and when goods will be received. It can be further divided into three components: infrastructure, the availability of modes, and the choice of modes among the given alternatives. It is the role of the international manager to then understand the transportation infrastructures in other countries and the various modes of transportation. The choice of these modes will depend on the customer’s demands and the firm’s transit time, predictability, and cost requirements. In addition, noneconomic factors, such as government regulations, weigh heavily in this decision.
Source: Czinkota, Michael R., Ilkka A. Ronkainen, and Michael H. Moffett. Fundamentals of International Business. Mason, OH: Thomson/South-Western, 2004. 311.