Transportation is the most expensive part in logistics;Trucking is the most important mode of transportation;CWT => Hundred Weight (1CWT=100LBS)*ROOBAR -> Bar avoiding Kangaroos?Motor Carriers are the easiest Mode of Transportation;Motor Carriers never go below variable cost;80,000 LBs is the weight limit on the HWYMOTOR CARRIERS => have LOW Fixed-cost and HIGH Variable-costVARIABLE COST [FUEL, DRIVERS, WAGE, ANYTHING WITH OPERATION]FIXED COST [MONTHLY PAYMENT ON TRUCK LICENSE;]LESS-THAN-TRUCKLOAD (LTL) -> need to have huge fleet of trucks; number of facilities(hubs) are required; don’t have to have full truckload;LESS-THAN-TRUCKLOAD => has more fixed-cost (^) because of the more number of fleet trucks; Less-Than-Truckload is 60% variable and 40% fixed.Truckload Carriers – 10% fixed cost, and 90% variable cost, because it’s on an individual truck basis;RAILROADS => Based on revenues you have Class 1,2, & 3 Railroads; THERE ARE 7 CLASS 1 RAILROADS WITH EXCESS REVENUES OF $290 MILLION; THERE ARE OVER 500 CLASS 2 & 3 RAILROADS TYPICALLY BEEN ABANDONED; Before Deregulation, you couldn’t abandon a railroad track; Every city doesn’t have a railroad tracks;Railroads are natural monopolies, which are good for consumers;Railroads own their right-of-way which makes fixed-cost(^) more than variable cost.TWO CARRIER TYPES : LINEHAUL, AND SHORTLINE CARRIERSHigh Fixed-Cost, because they own the land which tracks are laid; & Low Variable-Cost;IMPORTANT RAILWAY TERMS:1887 Act to Regulate Commerce (Regulated the Railroad Industry)ICC (Interstate Commerce Committee) - made sure transportation did what they were supposed to be doing;Robber Baron – Rockerfeller, Carnegie, titans of businessGOLDEN SPIKE????DOMESTICS WATERWAYS => River system, Great Lakes, Major Coasts;High Variable Costs, Low Fixed Costs, because the waterways are not owned;Major Facilitator of International Trade => Grain, Oil, Etc move via water;*BARGE TOWS????AIR CARRIERS => First Airlines were used to transport mail;*Netjet – private airline for corporate executivesHigh Variable Costs, and Low Fixed Costs; Because nothing is owned they pay for services;Domestic Market is dominated by 14 Major Carriers;PIPELINE => Pipelines and Railways are similar because only one is needed [Natural Monopoly]; High Fixed-Cost, and Low Variable-Cost, because they own their own infrastructure, like railroads;*TAPS (Trans Alaska Pipeline System) – 800 miles long @ $8 Billion;3 TYPES OF PIPELINES:GATHERING LINES – gather oil coming from ground, and feeds it in main pipeline;TRUCK LINES – main pipeline; main product is crude oil and everything comes from crude oil;REFINED PRODUCT PIPELINES - ??? WHAT TO KNOW?*PIG – cylinder used to clean pipelines; OR to separate two different kinds of product;AVIATION FUEL IS THE MOST HIGHGRADE;Why is the pipeline all Zig-Zaggy?Because of the rapid movement of plates;Why are the pipelines on a raised platform?You don’t want to disrupt the natural migration patterns of animals;INTERMODAL TRANSPORTATION => use of two or more different modes of transportation; Greater Accessibility, Overall cost efficiency, and it facilitates global trade (container on a train can be put on a ship); Development of standardized containers that are compatible with multiple Modes of Transportation;COST AND ACCESSIBILITY EFFICIENCY – Truck & Train is the most common combination;Intermodal HubsRail-Road HubsAir-Rail-Road HubsAir-Rail-Water-Road HubsSOME HUBS ARE ALSO FREE TRADE ZONES:Free Trade Zones – no taxes, a piece of property designated as a tax-free zone; Nissan imported mirrors from Japan and had a manufacturing plant in a Free Trade Zone;*DOUBLE STACKING CONTAINERS ON RAILPIGGYBACK?ROADRAILERS?*CLASSIFICATION????*BONDED CARRIERS?????INDIRECT AND SPECIAL CARRIERS =>BROKERS – charge commission every transaction, come in during emergenciesFOB ORIGIN – Buyer is responsibleFOB DESTINATION – Seller is responsibleMost Accessible Mode of Transportation are TRUCKSFastest Transit Time is by Air;RATE NEGOTIATIONS/ ZONE OF NEGOTIATION (ASK QUESTIONS)FREIGHT DOCUMENTATION:BILL OF LADING – important document shows proof of ownership; acts as a receipt for the goods the shipper tenders to the carrier;*ACT OF GOD -> Natural Disaster; Container falls over on ship;*MAINTAIN IN-TRANSIT VISIBILITY – technology facilitates the ability to monitor product;TRANSPORTATION METRICS:Key Performance Indicators (KPI) – On-time delivery, and Damage Free Goods;Primary categories of transportation KPI include service quality and efficiency;TRANSPORTATION MANAGEMENT SYSTEMS (TMS)ERP (ENTERPRISE RESOURCE PLANNING)SCMT309: Chapter 10 TransportationTransportation is the most expensive part in logistics;Trucking is the most important mode of transportation;CWT => Hundred Weight (1CWT=100LBS)*ROOBAR -> Bar avoiding Kangaroos? Motor Carriers are the easiest Mode of Transportation;Motor Carriers never go below variable cost;80,000 LBs is the weight limit on the HWYMOTOR CARRIERS => have LOW Fixed-cost and HIGH Variable-cost-VARIABLE COST [FUEL, DRIVERS, WAGE, ANYTHING WITH OPERATION]-FIXED COST [MONTHLY PAYMENT ON TRUCK LICENSE;]-LESS-THAN-TRUCKLOAD (LTL) -> need to have huge fleet of trucks; number of facilities(hubs) are required; don’t have to have full truckload; oLESS-THAN-TRUCKLOAD => has more fixed-cost (^) because of the more number of fleet trucks; Less-Than-Truckload is 60% variable and 40% fixed.Truckload Carriers – 10% fixed cost, and 90% variable cost, because it’son an individual truck basis;RAILROADS => Based on revenues you have Class 1,2, & 3 Railroads; THERE ARE 7 CLASS 1 RAILROADS WITH EXCESS REVENUES OF $290 MILLION; THERE ARE OVER 500 CLASS 2 & 3 RAILROADS TYPICALLY BEEN ABANDONED; Before Deregulation, you couldn’t abandon a railroad track; Every city doesn’t have a railroad tracks;-Railroads are natural monopolies, which are good for consumers;-Railroads own their right-of-way which makes fixed-cost(^) more than variable cost.-TWO CARRIER TYPES : LINEHAUL, AND SHORTLINE CARRIERS-High Fixed-Cost, because they own the land which tracks are laid; & Low Variable-Cost;-IMPORTANT RAILWAY TERMS: o1887 Act to Regulate Commerce (Regulated the Railroad Industry)oICC (Interstate Commerce Committee) - made sure transportation did what they were supposed to be doing;oRobber Baron – Rockerfeller, Carnegie, titans of businessoGOLDEN SPIKE????DOMESTICS WATERWAYS => River