History of Transportation and Its Role
in the Supply Chain
OMIS 6210 3.0
Transportation and Logistics
Management
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©Professor Natalie Kotikova, York University, 2025
Why Transportation Is Central to Supply
Chain Management?
• Economic Engine: Transportation links suppliers, manufacturers,
and consumers – representing ~5% of Canada’s GDP1.
• Value Creation Enabler: Timely, reliable movement of goods
enables JIT production, customer satisfaction, and cost-effective
sourcing.
• Strategic Leverage: Transportation decisions shape network
design, inventory levels, and market responsiveness – key levers
in competitive advantage.
1Freeland,C. (2025). TRANSPORTATION IN CANADA (Report TP 15388E). Transport Canada. https://tc.canada.ca/sites/default/files/2025-
06/transportation-canada-annual-report-2024.pdf
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From Ancient Routes to Modern Supply Chains -
A Brief History of Transportation in Global Trade
• Silk Road & Maritime Routes: Early
trade relied on camel caravans and
sailing ships, linking Asia, Africa, and
Europe with goods like spices, silk, and
salt.
• Industrial Revolution Leap: Steam
power and railways radically cut
transit times and costs, making mass
production and distribution viable
• From Manual to Mechanical:
Centuries of innovation transformed Photo by Jullian Amatt on Unsplash
transportation from labor-intensive to
mechanized and eventually digitized
systems
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Geography, Population Density and Climate
Influence Canadian Transportation Infrastructure
• Vast Distances, Sparse • Trade Corridor • Weather &
Density: Dependence: Infrastructure Risk:
• Canada spans nearly 10 • 90% of Canadian exports • Harsh winters, floods, and
million square kilometers rely on a few choke points aging infrastructure
with highly urbanized - Vancouver, Halifax, and introduce systemic risk into
pockets posing serious the Windsor-Detroit national and cross-border
challenges for national corridor. logistics.
distribution.
Canada’s logistics infrastructure is shaped by unique challenges—huge distances, a
dispersed population, and environmental threats. A small number of trade corridors handle
the vast majority of freight, making resilience and contingency planning non-negotiable.
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Transportation’s Role in Supply Chain Strategy -
Beyond Delivery—A Core Strategic Lever
• Network Design • Cost-to-Serve • Risk Mitigation &
Anchor: Optimization: Resilience: Transport
Transportation Aligning transport diversification and
choices influence mode and routes with contingency planning
facility location, lead demand patterns is reduced exposure to
times, inventory essential for cost delays, strikes, or
strategy, and visibility and profit geopolitical shocks.
customer service margin control
design.
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Big Decisions in Transportation Strategy –
What Every Supply Chain Manager Must Get Right
• Mode Selection: Choosing air,
rail, truck, ocean, or intermodal
involves trade-offs in speed,
cost, and carbon footprint.
• Carrier Partnerships: Selecting
3PLs, negotiating contracts, and
managing SLA's is critical for
reliability and cost control
• Service vs. Cost Balancing: Photo by Avi Waxman on Unsplash
Faster delivery increases
customer value but must be
justified by margin and
competitive positioning.
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Technology in Modern Transportation -
Digitization, Visibility, and AI-driven Logistics
• Real-Time Tracking: GPS, RFID, and
API's provide visibility across the
shipment lifecycle - critical for
exception management.
• Predictive Analytics: AI forecasts
delays, optimizes routes, and
automates carrier selection using real-
time and historical data.
Photo by Austin Distel on Unsplash
• Digital Integration: Transportation
management systems (TMS) integrate
with ERP / WMS, enabling seamless
planning, execution, and auditing.
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The Transportation Trade-Off Triangle -
Balancing Cost, Speed, and Sustainability
• Speed vs. Cost: Air freight offers
speed but at a high cost; Ocean is
cheaper but slower - affecting
inventory and service levels.
• Sustainability Pressures: Firms must
reduce emissions across transport
modes, driving demand for greener
fleets and route optimization.
Photo by Andy Li on Unsplash
• Strategic Alignment: No one-size-fits-
all: choices must align with customer
needs, brand promise, and financial
model.
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Canadian Transportation –
From Disruption to Adaptation: Examples
• Vancouver Port Disruptions: BC port
strikes in 2023 stalled over $10B in
trade – highlighting overreliance on
West Coast corridors.
• Grocery Supply Resilience: During
COVID-19, Loblaws and Metro
optimized inland DCs and truck routes
to ensure product availability
nationwide. Photo by Casey Horner on Unsplash
• Flood Risk Planning: Alternative routes
and modes are used, particularly in Resilience and agility must be built into
Quebec; seasonal load restrictions transport plans from day one!
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Emerging Trends in Transportation –
Autonomy, Sustainability, and Data-Driven Logistics
• Decarbonization Pressure: Carbon
pricing and ESG goals drive
investment in electric fleets, fuel
optimization, and model shifts.
• Autonomous Logistics:
Autonomous trucks, drones, and AI
dispatching are reshaping last-mile
and long-haul logistics. Photo by Cristiano Firmany on Unsplash
• Logistics Digital Twins: Real-time
simulation of networks enables
proactive transport planning and
risk mitigation.
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So What? Strategic Insights –
What the Transportation Lens Reveals
• Infrastructure is Strategy: Understanding
chokepoints, corridors, and trade dependencies
is key to national competitiveness.
• Transportation Drives Tradeoffs: Cost, carbon,
service, and risk must all be balanced through
transport decisions - not just inventory or
sourcing.
• Flexibility is Non-Negotiable: Scenario planning,
network modeling, and transport redundancy
are core to future-proofing SCM.
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Now What? Strategic Priorities for SCM Leaders -
Translating Insight into Action
• Map Dependencies: Audit your transportation nodes, partners,
and chokepoints - especially in Canada’s corridor-based system.
• Model Scenarios: Use digital tools to model delays, modal
shifts, and cost / service trade-offs under the realistic risk
conditions.
• Invest in Adaptability: Prioritize flexible contracts, multimodal
options, and tech adoption that supports long-term agility.
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To lead SCM effectively, transportation must be treated as a living
system—adaptable, measurable, and aligned with strategic priorities
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