The improvement in logistics shows up statistically in reduced inventory levels. Inventories are a cost: whoever owns them has had to pay for them but has yet to receive money from selling them. Better, more reliable transport has permitted companies to obtain goods closer to the time they need them, instead of weeks or months in advance, tying up

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As the manager, you could add another toaster, but this becomes an expensive addition of capital equipment. You could run the toaster continuously and build up an inventory of hot toast, throwing away what you can't use but always having immediate access to product. That means waste, which can also become too expensive for the operation. But at lea... See more

Many nonfreight costs undoubtedly fell with the growth of container shipping. Packing full containers at the factory eliminated the need for custom-made wooden crates to protect merchandise from theft or damage. The container itself served as a mobile warehouse, so the traditional costs of storage in transit warehouses fell away. Cargo theft droppe

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What both transportation companies and shippers were slowly coming to grasp was that simply carrying ocean freight in big metal boxes was not a viable business. Yes, it produced some savings: cranes, boxes, chassis, and containerships eliminated much of the cost of loading and unloading vessels at the dock. Shippers, however, cared not about loadin

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