Product Storage:
A less common transportation function is temporary storage. Vehicles make rather expensive storage facilities. However, if the in-transit product requires storage but will be moved again shortly (e.g. in a few days), the cost of unloading and reloading the product in a warehouse may exceed the per-daily charge of storage in the transportation vehicle.
In circumstances where warehouse space is limited, utilizing transportation vehicles may be a viable option.
One method involves loading on the vehicle and then having it take an indirect route to its destination. This is desirable when the origin or destination warehouse has limited storage capacity.
A second method to achieve temporary product storage is diversion. This occurs when an original shipment destination is changed while the delivery is in transit.
E.g. suppose a product is initially scheduled to be shipped from Chicago to Los Angeles. However, if during the delivery process, it is determined that San Francisco is in greater need of the product or has available storage capacity; the product could be delivered to the alternative destination of San Francisco.
In short, although product storage in transportation vehicles can be costly, it may be justified from a total cost or performance perspective when loading or unloading costs, capacity constraints, or the ability to extend lead times are considered.
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