Chap 9: Transportation

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Chap 9: Transportation
2014-05-08 00:55:47
Business Logistics
Transportation infrastructure in several countries, Id 5 modes of transportation,intermodal transportation, transportation specialists, different types of regulation impact transportation, ID legal classification of transportation carriers.
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  1. Transportation (pg.167)
    is the movement of goods and people between two points.
  2. Transportation: Formal list of six
    • 1. transportation costs are affected by node location (firm's plants, warehouses, vendors, retail locations, and customers)
    • 2. inventory requirements are influenced by mode (High-speed, high-priced transportation systems require smaller amounts of inventories in a logistics system, whereas slower, less-expensive trans. requires larger amounts of systemwide inventory)
    • 3. packaging requirements are dictated by mode (the transport mode selected influences the packaging required, and carrier classification rules dictate package choice)
    • 4. materials handling equipment and design of the docks are dictated by mode (loading and unloading equipment and the design of the receiving and shipping docks)
    • 5. maximum consolidation of loads achieved with order-management technology reduces costs (shipments btwn common points enables a co. to give larger shipments to its carrier and take advantage of volume discounts)
    • 6. customer service goals influence the type and quality of carrier and carrier service selected by the seller
  3. What are the 5 modes?
    • Air
    • Motor
    • Pipeline 
    • Rail
    • Water
  4. Transportation modes: Airfreight 

    • Generally the fastest mode
    • Expensive
    • Accessorial service, if needed, adds cost and time
    • Best suited for high-value, lower-volume urgent, perishable or time-specific deliveries
    • Dimensional weight used for rates
  5. Transportation modes:
    Airfreight reliability is problematic due to delays caused by:
    • Weather
    • Congestion and resultant delays with air passenger transporation (belly freight)
  6. Transportion mode examples of products that move by air:
    • auto parts and accessories
    • cut flowers and nursery stock
    • electronic or electrical equipments, i.e. iPods
    • Fruits and vegetables
    • machinery and parts 
    • metal products
    • photographic equipment, parts, and film
    • printed matter
    • wearing apparel
  7. Modes of transportation:
    Air carriers
    491 air cargo carriers:

    • - Combination carriers
    • - Air cargo carriers
    • - Integrated carriers
    • - Nonintegrated carriers

    Domestic market is dominated by 14 major carriers

    High variable and low fixed cost
  8. Transportation modes: Motor 

    • TL and LTL
    • Most important business user of the Interstate Highway System
    • Primary advantage is flexibility 
    • Cost is generally lower when compare to airfreight
  9. Transportation Modes: Motor (LTL Carriers*)
    • LTL - Less than truck load
    • 150-10,000 pounds
    • too big to be handled manually, too small to fill a truck
    • LTL trucks carry shipments from many shippers 
    • prominent LTL carriers include: ABF Freight System, FedEx Freight, UPS Freight, YRC (formally Yellow Freight and Roadway)
    • Process: 
    • > Local pick up
    • >origin terminal used to load aboard line haul 
    • >line haul to terminal near destination
    • > destination loval delivery on smaller trucks 
    • > consignee receives
  10. Transportation modes: Pipelines 

    (pg. 173)
    • Only mode without vehicles
    • most reliable mode
    • tend to be the slowest mode
    • accommodates only liquid, liquefiable or gaseous products
    • capable of transporting large product volumes
    • high fixed costs, but relatively low cost per unit due to large product volume
  11. Modes of transportation: pipeline 

    • Unique mode of transportation as the equipment is fixed in place and the product moves through it in high volume
    • 174 operators of hazardous liquid pipelines that primarily carry crude oil and petroleum products
    • 3 primary types: 
    • >Gathering lines (small in diameter)
    • > Trunk lines
    • >Refined product pipelines
    • High fixed versus low variable
  12. Transportation modes: Railroad 

    • U.S. dominated by 4 carriers
    • - Burlington Northern (BN)
    • - CSX 
    • - Northfolk Southern (NS)
    • - Union Pacific

    Domination limits service and pricing options
  13. Transportation Modes: Railroad
    • Neither Best or Worst on any of the 6 attributes
    • superior to air, motor, and pipe, but inferior to water when transporting different kinds of products
    • less flexibility, but more when compared to air, water, and pipe.
    • Superior to air and motor w/ regards to volume, but inferior to pipe and water
    • less expensive than air and motor, but more expensive than pipe and water
    • faster than pipe and water, but slower than air and truck.
  14. Modes of transportation: Railroads
  15. Water

  16. Intermodal Transportation

    refers to transportation when using a container or other equipment that can be transferred from the vehicle of one mode to the vehicle of another mode without the contents being reloaded or disturbed. 

    • 2 or more modes are employed to utilize advantages of each while minimizing their disadvantages 
    • - Piggyback transportation - combination btwn rail and road.