What is a primary benefit of faster transportation despite its higher cost?

Faster transportation offers a primary benefit of lower inventories. When companies can move goods more quickly through the supply chain, they can operate with reduced inventory levels. This is because they rely on just-in-time delivery strategies, where products are received only as they are needed in the production process or to meet customer demand. Lower inventory levels reduce holding costs, minimize the risk of obsolescence, and free up cash that can be used for other operational needs.

While lower transportation costs might seem appealing, the focus here is on the benefits associated with speed. When inventory is kept at lower levels due to faster replenishment, it leads to operational efficiencies. In turn, this helps organizations be more responsive to changes in customer demand and reduces the physical space required for inventory storage. Hence, the ability to transport goods quickly aligns well with the strategic goal of minimizing inventory while still ensuring product availability.