Chapter 6 TransportationLearning ObjectivesTransportationSlide 4Slide 5Slide 6Slide 7Overview of Transportation InfrastructureTransportation Infrastructure (2006)Transportation Infrastructure (2010)Selecting Transportation ModesAirfreightSlide 13Slide 14Slide 15Motor CarriersSlide 17LTL CarriersSlide 19PipelinesSlide 21RailroadsSlide 23WaterSlide 25Transportation Mode ComparisonIntermodal TransportationSlide 28Slide 29Slide 30Transportation SpecialistsSlide 32Slide 33Slide 34Transportation RegulationSlide 36Federal Regulation of Transportation in U.S.Slide 38Slide 39Slide 40Slide 41Slide 42Legal Classification of CarriersSlide 44Private TransportationCase 6-1 Boone Shoe CompanySlide 47Slide 48Slide 49Slide 50Chapter 6TransportationLearning Objectives•To relate the mode of transport to the user’s shipping volume•To understand the use of routing guides•To realize the role of freight forwarders and other intermediaries•To understand the difference between LTL and TL motor carriers•To appreciate the use of terminals as transfer points for bulk materials•To appreciate trade-offs when using vehicles with self-loading/unloading equipment•To learn about project cargo•To learn the basics of freight rate determination© 2008 Prentice Hall 6-2Transportation•Key Terms–Accessorial service–Barge–Broker–Common Carrier–Consignee–Contract carrier–Dept. of Transportation–Dimensional weight•Key Terms–Excess capacity–Exempt carrier–Freight forwarder–Intermodal transportation–Line-haul–Parcel carriers–Piggyback transportation© 2008 Prentice Hall 6-3Transportation•Key Terms–Private carriers–Rail gauge–Shippers’ association–Slurry systems–Surface Transportation Board–TEU–Terminal•Key Terms–Ton miles–Transportation© 2008 Prentice Hall 6-4Transportation•Transportation is the movement of goods and people between two points.Transportation•Transportation influences or is influenced by the following logistics activities:–Transportation costs are affected by node location–Inventory requirements are influenced by mode–Packaging requirements are dictated by mode–Materials handling equipment and design of the docks are dictated by mode–Maximum consolidation of loads achieved with order-management technology reduces costs–Customer service goals influence carrier choice12-6© Pearson Education, Inc. publishing as Prentice Hall12-7Transportation•Five different types or modes of transportation include:–Air–Motor carrier (truck)–Pipeline–Rail–Water© Pearson Education, Inc. publishing as Prentice Hall12-8Overview of Transportation Infrastructure•Wide disparities in the various infrastructures exist between highly populated countries •Lack of infrastructure makes it difficult to use that mode domesticallyTransportation Infrastructure(2006)6-9Brazil China India UK USAir (runway > 10k ft.) 8 54 17 8 191Highway (paved, km) 95K 1448K 2411K 388K 4165KPipeline (oil, km) 5.2K 14.5K 5.6K 6.4K 244.6KBroad gauge rail (km) 4.9K 45.7K 0.5KStd gauge rail (km) 0.2K 71.9K 16.8K 227.7KNarrow gauge rail (km) 23.9K 14.4KWater (inland, km) 50K 124K 14.5K 3.2K 41KArea (km2) 8544K 9806K 3167K 244.8K 9162KTransportation Infrastructure(2010)6-10Brazil China India UK USAir (runway > 10k ft.) 7 63 21 9 189Highway (paved, km) 96K 3584K 3320K 394K 4375KPipeline (oil, km) 4.5K 20.1K 7.7K .7K 244.6KBroad gauge rail (km) 5.7K 52.8K 0.3KStd gauge rail (km) 0.2K 77.1K 16.2K 226.4KNarrow gauge rail (km) 22.9K .8K 8.5KWater (inland, km) 50K 110K 14.5K 3.2K 41KArea (km2) 8544K 9806K 3167K 244.8K 9162Khttps://www.cia.gov/library/publications/the-world-factbook/rankorder/2053rank.htmSelecting Transportation ModesAttributes•Cost•Speed (transit time from pickup to delivery)•Reliability (consistency of delivery)•Capability (amount of different types of product)•Capacity (volume/weight can be carried at one time)•Flexibility (ability to deliver the product to customer)© 2008 Prentice Hall 6-11© Pearson Education, Inc. publishing as Prentice Hall12-12•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 ratesAirfreightAirfreightAdvantages:•Speed (line-haul)Disadvantages:•Cost•Flexibility (need of accessorial service)•Limited capacity–Boeing 737: 10 tons; 777: 60 tons, 747: 100 tons–Airbus A-380: 150 tonsApplicable: high-value, low-volume© 2008 Prentice Hall 6-13© Pearson Education, Inc. publishing as Prentice Hall12-14•Examples of products that move by air:–Auto parts and accessories–Cut flowers and nursery stock–Electronic or electrical equipment, i.e. iPods–Fruits and vegetables–Machinery and parts–Metal products–Photographic equipment, parts, and film–Printed matter–Wearing apparelAirfreight© Pearson Education, Inc. publishing as Prentice Hall12-15•Airfreight reliability is problematic due to delays caused by:–Weather–Congestion and resultant delays with air passenger transportation (belly freight)Airfreight© Pearson Education, Inc. publishing as Prentice Hall12-16•Motor Carriers–Most important business user of the Interstate Highway System–Primary advantage is flexibility–Cost is generally lower when compared to airfreight–LTL vs. TLMotor CarriersMotor CarriersAdvantages:•Flexibility•CapabilityDisadvantages:•Cost (only cheaper than airfreight)•Limited capacity: 40 tons (Interstate Hwy)© 2008 Prentice Hall 6-17LTL Carriers•Less-than-truckload (LTL)–150 to 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 (formerly Yellow Freight and Roadway)© Pearson Education, Inc. publishing as Prentice Hall12-18LTL Carriers•Less-than-truckload (LTL) (continued)–Process•Local pick-up•Origin terminal used to load aboard line haul•Line haul to terminal near destination•Destination local delivery on smaller trucks•Consignee receives© Pearson Education, Inc. publishing as Prentice Hall12-19•Pipelines–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
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