Financing the Transport Function

The monograph examines firstly the magnitude of demand for capital investment in individual items of distribution equipment—ships, aircraft and motor vehicles, It then concentrates on financing motor transport, examining the objectives of acquisition analysis and the relative importance of the company controlling its own fleet. Alternative methods of distributing the product are examined to show how transport involvement can be minimised according to the marketing strategy adopted. The monograph considers, in some detail, alternative approaches to commercial vehicle acquisition. The broad principles of the subject are discussed and three common methods presented—outright purchase, hire purchase and leasing. Worked examples are shown for each method, using discounted cash flow techniques and the net present costs of the alternatives compared. The final section of the paper examines the changing demand for capital in the company for transport from its launch as a one man operation through to the mature large organisation.