Situation Factors: Proximity to Markets and Transport
For proximity of inputs, industries that need to be closer to their materials tend to be bulk-reducing industries. For proximity to markets (or buyers and sellers), industries that need to be closer to those markets are called bulk-gaining industries. These industries produce goods that either increase weight or volume to the product before it is finalized. There are also two other types of industries that are located near markets: perishable and single-market.
Bulk-Gaining Industries: Fabricated metal factories take various metal parts and machinery to finalize a product. The best example is an automobile manufacturer. The parts are used to build and finalize a product that is larger in volume and weight than the individual parts and pieces. Therefore, when transporting the final product to consumers, the bulk of the cost will be at this stage. This means they need to be close to the markets for cost-cutting capabilities.
Another example would be beverage manufacturers. Breweries, distilleries, and soda production needs to add something to water in order for the consumers to enjoy. Therefore, the syrups for soda and the ingredients for beer are added, then the beverage is bottled and sent to the consumers. Although water can be expensive to transport, there is generally an abundance in most places so industries do not have to be close to inputs for this production.
Perishable: While most rightly think of food as perishable, other perishable products include products such as newspapers. It is imperative for perishable product manufacturers to be close to the markets since there is a timetable or expiration date set on their products. No one wants to receive spoiled food or out of date newspapers.
Single-Market: Harkening back to the major factories, single-market industries include specialized parts and machinery for factories and foundries. These industries may only a handful of customers and must be close to them in order to turn a profit. This is due, in part, to the need of these parts or machinery which are crucial to the daily operation of factories.
When shipping freight and product, it is important for industries to choose the best shipping methods for them. Land, sea, and air are the modes of transportation, and land is usually split into truck or railroad shipping. For quick delivery, trucks and air are the best option, although it can be more expensive, while ships cost less but take longer. For overland travel involving more than one day service, many companies use rail transport.
Other industries use a combination of transportation methods. Those that do transfer goods at what is called a break-of-bulk point. Simply, this is the place where the different modes of travel interconnect, e.g. seaports, railroad depots, and airports.
Bulk-Gaining Industries: Fabricated metal factories take various metal parts and machinery to finalize a product. The best example is an automobile manufacturer. The parts are used to build and finalize a product that is larger in volume and weight than the individual parts and pieces. Therefore, when transporting the final product to consumers, the bulk of the cost will be at this stage. This means they need to be close to the markets for cost-cutting capabilities.
Another example would be beverage manufacturers. Breweries, distilleries, and soda production needs to add something to water in order for the consumers to enjoy. Therefore, the syrups for soda and the ingredients for beer are added, then the beverage is bottled and sent to the consumers. Although water can be expensive to transport, there is generally an abundance in most places so industries do not have to be close to inputs for this production.
Perishable: While most rightly think of food as perishable, other perishable products include products such as newspapers. It is imperative for perishable product manufacturers to be close to the markets since there is a timetable or expiration date set on their products. No one wants to receive spoiled food or out of date newspapers.
Single-Market: Harkening back to the major factories, single-market industries include specialized parts and machinery for factories and foundries. These industries may only a handful of customers and must be close to them in order to turn a profit. This is due, in part, to the need of these parts or machinery which are crucial to the daily operation of factories.
When shipping freight and product, it is important for industries to choose the best shipping methods for them. Land, sea, and air are the modes of transportation, and land is usually split into truck or railroad shipping. For quick delivery, trucks and air are the best option, although it can be more expensive, while ships cost less but take longer. For overland travel involving more than one day service, many companies use rail transport.
Other industries use a combination of transportation methods. Those that do transfer goods at what is called a break-of-bulk point. Simply, this is the place where the different modes of travel interconnect, e.g. seaports, railroad depots, and airports.
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