Commerce · Lesson 8

Modes of transport, warehousing and tourism

JAMBWAECNECO

What the syllabus asks

JAMB: 6 Aids to trade (e) Tourism (importance, agencies, challenges); (f) Transport (importance, modes, merits and demerits, choice); (g) Warehousing (importance, types, factors in siting)

WAEC: Transport (meaning, importance, modes: road, rail, water, air, pipeline; advantages and disadvantages; factors determining choice; containerisation; problems of transport in Nigeria); Warehousing (meaning, functions, types, qualities of a good warehouse); Tourism (meaning, types, importance, tourist centres in Nigeria, problems and solutions)

NECO: Transport (meaning, importance, modes: road, rail, water, air, pipeline; advantages and disadvantages; factors determining choice; containerisation; problems of transport in Nigeria); Warehousing (meaning, functions, types, qualities of a good warehouse); Tourism (meaning, types, importance, tourist centres in Nigeria, problems and solutions)

What you will learn

Explain the meaning and importance of transport in commerce.
Describe the modes of transport with their advantages and disadvantages.
Explain the factors that determine the choice of transport.
Explain ocean transport terms: liners, tramps, charter parties and containerisation.
Identify transport agencies in Nigeria and the problems of transport.
Explain the meaning, functions and types of warehouses and the qualities of a good warehouse.
Explain the meaning, types and importance of tourism.
Identify tourist centres in Nigeria and the problems facing tourism and their solutions.
Carry out simple calculations of transport and storage costs.

Key points

Transport moves people and goods, removes the hindrance of place and creates place utility.
Importance: wider markets, specialisation, price stability, jobs, revenue, unity.
Choice factors: cost, speed, nature of goods, distance, safety, reliability, availability, terminals.
Road: door-to-door and flexible; but limited capacity, accidents, congestion, poor roads.
Rail: cheap for bulk over long distances, safe; but inflexible, needs road links, costly to build. Lagos–Ibadan SGR commercial since 2021.
Water: cheapest for bulk; slow; inland waterways seasonal; ocean liners vs tramps; charter parties.
Air: fastest, for urgent and valuable goods; very expensive, limited capacity.
Pipeline: continuous and cheap for liquids and gas; high initial cost, vandalism.
Containerisation: standard boxes, intermodal, faster and safer; 40-ft = 2 TEU.
Agencies: FRSC, FERMA, NRC, NIWA, NPA, NIMASA, FAAN, NCAA.
Warehousing removes the hindrance of time; stores, stabilises prices, protects, grades, finances.
Warehouses: private (manufacturer, wholesaler, retailer), public, bonded, cold stores, silos.
Good warehouse: accessible, secure, spacious, ventilated, fire-protected, equipped, well recorded.
Tourism: domestic, inbound, outbound; leisure, business, religious, cultural, medical, eco.
Nigeria: Yankari, Obudu, Osun-Osogbo and Sukur (UNESCO), Argungu, Calabar Carnival; NTDA promotes; problems include insecurity and poor infrastructure.

Start here: Transport: meaning and importance

Transport is the movement of people and goods from one place to another. Tomatoes grown in Kano are of little use to a family in Port Harcourt until they are moved there; transport creates place utility and removes the hindrance of place.

Importance of transport

Moves goods from producers to consumers, completing the chain of production.
Widens the market: producers can sell nationwide and abroad, enabling large-scale production.
Encourages specialisation and division of labour between regions.
Moves raw materials to factories and labour to workplaces (mobility of labour).
Stabilises prices by moving goods from areas of surplus to areas of scarcity.
Creates employment: drivers, transporters, mechanics, pilots, sailors, port workers.
Supports other aids to trade: tourism, warehousing, communication (mail delivery).
Earns revenue for government through licences, tolls and taxes, and foreign exchange through shipping and airline services.
Promotes national unity and defence through movement of people and troops.
Helps in emergencies: relief materials, ambulances.

Elements of transport

Every transport system has: the way (road, rail track, waterway, air route, pipeline), the unit of carriage (vehicle, wagon, ship, aircraft), the motive power (engine, fuel), and terminals (motor parks, stations, ports, airports).

Worked example 8.1 (JAMB-style)

Transport adds value to goods by creating

A. form utility B. place utility C. time utility D. marginal utility

Answer: B.

Transport and the cost of goods

Transport costs form part of the price of almost everything we buy. When fuel prices rise or roads deteriorate, transporters raise their charges, and traders pass the higher cost on to consumers. For example, a rise in the cost of moving tomatoes from the north to Lagos quickly shows up as higher market prices in the south. Efficient, cheap transport therefore lowers prices, while poor transport raises them and can cause goods to rot before they reach the market. This is why good transport infrastructure is one of the most important foundations of commerce in a large country such as Nigeria.

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Practice questions

1. Pipelines are mainly used to transport

oil and gas
passengers
perishable fruits
furniture

Show answer

A: oil and gas
Cheap and continuous for liquids and gas.

2. A disadvantage of air transport is

speed
safety
suitability for urgent goods
high cost

Show answer

D: high cost
It also carries limited bulk.

3. Inland waterways are suitable for

door-to-door delivery
perishable goods over long distances
bulky, non-urgent goods along rivers
urgent letters

Show answer

C: bulky, non-urgent goods along rivers
Slow but cheap.

4. A liner is a ship that

is used for fishing
sails on fixed routes to a regular timetable
sails anywhere for any cargo
carries only oil

Show answer

B: sails on fixed routes to a regular timetable
Tramps have no fixed route.

5. A tramp ship

has no fixed route or timetable
only carries passengers
is a small canoe
is owned by the navy

Show answer

A: has no fixed route or timetable
It goes wherever cargo is offered.

Key words

Transport: The movement of people and goods from one place to another.
Place utility: The added usefulness of goods when moved to where they are wanted.
Time utility: The added usefulness of goods when stored until they are wanted.
Liner: A ship that sails on regular routes according to a published timetable, carrying passengers or cargo of many shippers.
Tramp: A cargo ship with no fixed route or timetable, hired to carry cargo wherever needed.
Charter party: A contract for hiring the whole or part of a ship, either for a voyage or for a period.
Freight: The charge for carrying goods, especially by sea or air; also the goods themselves.
Containerisation: The use of standard-sized steel boxes to carry goods, which can be moved between ship, rail and road without unpacking.
TEU: Twenty-foot equivalent unit: a standard measure of container capacity.
Demurrage: A charge for delay in loading or unloading a ship, or for keeping containers or wagons beyond the free period.
Cabotage: Reserving coastal and inland shipping within a country to that country’s own vessels.
Warehousing: The holding and storage of goods in large quantities until they are needed.

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