Professional Documents
Culture Documents
Dr. M.P.Singh
Outbound transportation was clearly the largest component of total physical distribution costs. Cost trade-offs abound in transportation and are typified by trading lower inventory costs for higher transportation costs.
Small vehicle size coincides with lower inventory strategies and quick replenishment (QR).
Relatively high cost compared to rail and water; trade-off is faster service.
Regulated common and contract carriers haul about 5% of the freight, while private and exempt carriers haul the other 95% of the ton-miles.
Bulk carriers Specially designed to haul minerals Can handle multiple cargoes
Any of the air carriers can carry air freight although some haul nothing but freight. Cost structure is highly variable; do not own rights-ofway. Transit times are fastest of the modes, but rates are highest.
Modes Water
2 4
Air 5 1
Pipeline 1 ---
2
1 2 3
1
2 1 2
4
4 4 4
3
3 3 1
--5 -----
Accessibility
Security
Exceptions to liability include acts of God, acts of the public enemy, acts of public authority, acts of the shipper and defects inherent in the goods. Continued service is assisted by ceiling and floor limits on the rates charged. Backbone of the transportation industry.
The ICC Termination Act of 1995 eliminated most of the common carrier economic regulation for these two modes, including entry controls, reasonable rates, and nondiscrimination provisions. When acting as a contract carrier, not subject to STB economic regulations. Must provide safe and adequate service.
Intermodal Transportation
Refers to use of two or more modes of transportation cooperating on the movement of shipment by publishing a through rate. Logistics managers are looking for the best way to move shipments and these often attempt to take advantage of multiple modes of transportation, each of which has certain useful characteristics.
Intermodal Transportation
Biggest disadvantage is that carriers are reluctant to participate. Cultural bias towards using only one mode and this makes change more difficult. Certain types have been fairly well developed, such as rail/water, motor/water, rail/motor, and motor/air.
shipments where oceans are separated by a large land mass. For example, containers moving from Japan to Europe may dock at Long Beach, CA, transfer the containers to a railroad, and reload the containers onboard another ship in Norfolk, VA., continuing on to a European port.
Over the road trailers ride in special rail cars. Takes advantage of motor flexibility and rails long haul economic advantage. Multiple service plans for shippers. Some railroads provide varying levels of service, differentially priced.
Brokers
Acts as an intermediary May be licensed by STB Often used to provide backhauls for private carriers