Cambridge O Level Commerce: Logistics in Commerce — Revision Notes (7100)

Logistics is the part of commerce that gets goods from producer to consumer: transporting them and storing them in warehouses along the way. Cambridge O Level Commerce (7100, 2026-2028) Topic 4 has two sections, 4.1 Transport and 4.2 Warehousing. Questions usually give a business situation and ask you to recommend a transport method or warehouse, so revise by practising decisions, not just lists.

For full explanations use the logistics study guide; practise with the logistics practice questions.

Syllabus coverage (7100, 2026-2028)

Section	You must know
4.1 Transport	Functions (time, place, quantity); road, rail, air, sea, pipeline; pros and cons; six choice factors; containerisation and transshipment
4.2 Warehousing	Five functions; bonded, cold storage, cash and carry, RDC; robotics, automated sorting, voice picking; five benefits of automation

How does transport add value?

Transport makes goods useful by delivering them at the right time, to the right place, in the right quantity. A crate of mangoes on a farm is worth little to a city shopper until transport brings it to the market before it ripens too far.

Transport methods in one line each

• Road (vans, trucks, couriers) - the only method that reaches the customer’s door; best for short, flexible journeys.
• Rail (freight trains) - heavy loads over long land distances; needs road at each end.
• Air (freight planes) - fastest for long distances; the most expensive per kilogram.
• Sea (ferry, tanker, container ship, cargo liner) - cheapest for large international loads; slowest.
• Pipeline - continuous movement of liquids and gases; very costly to build, cheap to run.

How do you choose a transport method?

Ask six questions - they are the six factors in the syllabus.

Question	Factor	Points towards
Is it perishable, fragile, bulky, liquid or valuable?	Nature of goods	Air for perishables; sea or rail for bulky; pipeline for liquids
How soon is it needed?	Urgency	Air or courier
Can the price of transport be justified by the value of goods?	Cost	Sea or rail for low-value goods
Is there a risk of theft or damage?	Security	Air, sealed containers
How far is it going?	Distance	Road for short; sea or air for international
Will the carrier deliver on time?	Reliability of transporter	A carrier with a good record

Decision practice

Situation	Best method	Reason
Cement from a works to building sites across one city	Road (trucks)	Short distance, many destinations
Iron ore from a mine to a coastal steelworks 800 km away	Rail	Heavy, bulky, long overland journey
Spare part for a grounded aircraft on another continent	Air	Extremely urgent, small and valuable
10 000 washing machines from Korea to Brazil	Sea, in containers	Large volume, international, not urgent
Natural gas from a field to a power station	Pipeline	Continuous flow of a gas

What is containerisation and transshipment?

Goods are packed into standard-sized sealed containers that are lifted between ships, trains and trucks without unpacking. Transshipment is moving containers from one ship or vehicle to another at a hub - for example from a giant ocean vessel to a smaller feeder ship serving a minor port.

• For: quick crane loading; less theft and damage; lower labour and insurance costs; easy multi-mode transport.
• Against: expensive containers, ships and port equipment; small ports may be excluded; empty containers must be returned.

Why are warehouses needed?

• Seasonal production - storing a harvest (such as wheat) to sell through the year.
• Demand - building stock before peaks such as school terms or festivals.
• Protecting supply - buffer stock if a delivery is delayed.
• Price stability - steady release prevents sharp price swings.
• Logistics postponement - finishing, labelling or packing goods only when orders arrive.

Warehouse	When to use it
Bonded	Imported goods awaiting payment of customs duty, or for re-export
Cold storage	Food, flowers, medicines needing low temperatures
Cash and carry	Small retailers buying in bulk and transporting goods themselves
Regional distribution centre (RDC)	A retail chain supplying all its shops in a region from one hub

How does automation help warehouses?

Robotics move and pick goods; automated sorting routes parcels by scanner; voice picking guides workers by headset. Benefits: lower labour costs, less human error, better picking accuracy, better inventory control and better customer service.

Worked evaluation. A medium-sized wholesaler considers robots. Benefits: fewer picking errors and faster dispatch. Costs: high purchase price, maintenance and training. Judgement: worthwhile if order volumes are high enough for savings in labour and errors to cover the investment.

Common mistakes and exam traps

• Recommending a method without using the scenario’s facts (distance, urgency, nature of goods).
• Saying pipelines can carry solid goods.
• Calling transshipment “moving goods into containers”.
• Writing that a cash and carry delivers to the retailer - retailers collect the goods.
• Mentioning automation without a specific benefit from the syllabus list.

Frequently asked questions

Why is road transport used in almost every supply chain? It is the only method that can deliver to the customer’s door, so goods arriving by rail, sea or air usually finish their journey by road.

What is a regional distribution centre? A large warehouse that receives goods from many suppliers and sends combined deliveries to a retail chain’s shops in one region.

How many factors affect the choice of transport in 7100? Six: nature of goods, urgency, cost, security, distance and reliability of transporter.

Official syllabus

Cambridge O Level Commerce (7100) syllabus for 2026, 2027 and 2028 - official syllabus PDF, Topic 4.