Logistics and Integrated Transport Demand

The more integrated a supply chain is, the harder it is to make a distinction between physical distribution and materials management as distribution channels extend from suppliers to consumers and as responsibility for transport and warehousing is shared between manufacturers, wholesalers and retailers. Logistics must be consistent with the products it supports as customers tend not to place any distinctions between a product and the distribution system that supplies it. Consequently, it is becoming increasingly difficult to consider transportation solely as a derived demand, or industrial production, manufacturing and consumption solely as factors inducing transport demand. The classic transport economics concept of derived freight demand has been blurred by the diffusion and adaptation of logistics. Manufacturing and mobility requirements are both embedded as what is being produced has to be moved at a similar rate along the supply chain.