• Water transport is the cheapest and the oldest mode of transport. It operates on a natural track and hence does not require huge capital investment in the construction and maintenance of its track except in case of canals. • The cost of operation of water transport is also very less. It has the largest carrying capacity and is most suitable for carrying bulky goods over long distances. • It has played a very significant role in bringing different parts of the world closer and is indispensable to foreign trade