Chapter 6 transport fundamentals
Download
1 / 40

Chapter 6: Transport Fundamentals - PowerPoint PPT Presentation


  • 798 Views
  • Uploaded on

Chapter 6: Transport Fundamentals. Skip Transit Privileges (pp. 172-175) Five Modes. Intermodal and International. Regulation/Deregulation. Costs & Rates. Documentation. Transportation. Most important component of logistics cost. Usually 1/3 - 2/3 of total cost.

loader
I am the owner, or an agent authorized to act on behalf of the owner, of the copyrighted work described.
capcha
Download Presentation

PowerPoint Slideshow about 'Chapter 6: Transport Fundamentals' - Anita


An Image/Link below is provided (as is) to download presentation

Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author.While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server.


- - - - - - - - - - - - - - - - - - - - - - - - - - E N D - - - - - - - - - - - - - - - - - - - - - - - - - -
Presentation Transcript
Chapter 6 transport fundamentals l.jpg
Chapter 6: Transport Fundamentals

Skip Transit Privileges (pp. 172-175)

  • Five Modes.

  • Intermodal and International.

  • Regulation/Deregulation.

  • Costs & Rates.

  • Documentation.


Transportation l.jpg
Transportation

  • Most important component of logistics cost.

    • Usually 1/3 - 2/3 of total cost.

  • Shapes economy and society.

  • Links production and consumption.

  • Increases competition, availability and variety.

  • Permits economies of scale in production.


Five modes of transport l.jpg
Five Modes of Transport

% of Total % of Total % of Total

Mode US Intercity US Tons US Transport.

Ton-miles Cost

Water 15 15 5

Railroad 38 25 8

Truck 28 43 80

Air 0.4 0.1 4

Pipeline 18 16 3


Trends for intercity ton miles l.jpg
Trends for Intercity Ton-Miles

  • Water use will increase.

  • Rail use will decrease.

  • Truck use will stay about the same.

  • Air use will increase.

    • Fastest growth, but small %.

    • High growth between US & Asia.

  • Pipeline use will stay about the same.


Water l.jpg
Water

  • Products: Nonperishable bulk cargo.

    • Liquids, minerals, grain, petroleum, lumber, etc.

  • System:

    • Mississippi system: 55% of traffic; 11,000 miles; 7500 miles over 6 ft. deep.

    • Coastal & other: 35% of traffic; 17,000 miles.

    • Great Lakes: 10% of traffic; 95,000 square miles.

  • Average trip:

    • Internal: 400-500 miles.

    • Coastal: 2000 miles.


Water6 l.jpg
Water

  • Public ownership of waterways.

  • Slow speed: 5-10 mph

  • Very large size:

    • 1 barge = 35 ft. x 195 ft.

    • 1 barge = 1500 tons (3,000,000 lbs).

    • Up to 40 barges per tow (60,000 tons).

    • Can haul very large objects.

  • Disruptions of service: drought, flood, ice.


Water transport st louis l.jpg
Water Transport & St. Louis

  • St. Louis is major inland port.

    • Most northern ice-free port.

  • Loads/unloads 50-100 barges each day.

  • Above St. Louis: 15 barges per tow.

  • Below St. Louis: 30-45 barges per tow.

  • St. Louis - New Orleans travel time?

    • 1053 miles.


Inland waterways information l.jpg
Inland Waterways Information

  • Inland water transportation is about a $3.5 billion annual industry.

  • Over 11,000 federally maintained linear miles of navigable waterways.

  • Corps of Engineers manages the infrastructure, Coast Guard manages the navigation.


Slide9 l.jpg



1999 upper mississippi illinois waterway commodity flows l.jpg

Commodity

Tons

% of Total

Agriculture

59,212,908

44.3%

Coal

25,288,293

18.9%

Aggregates

15,056,445

11.3%

Chemicals

8,571,485

6.4%

Petroleum

8,430,536

6.3%

Ores

3,312,471

2.5%

Iron & Steel

5,565,281

4.2%

Other

8,281,576

6.2%

Total

133,718,995

100.0

1999 Upper Mississippi – Illinois Waterway Commodity Flows


Slide13 l.jpg
Rail

  • Products: Heavy industry, minerals, chemicals, agricultural products, autos, etc.

    • 60% of coal; 67% of vehicles; 68% of paper and pulp

  • System: 120,000 miles of line.

    • 1.2 million rail cars.

    • Most are boxcars or hoppers.

  • Average trip: 700 - 800 miles.


Slide14 l.jpg
Rail

  • Private ownership of right-of-ways.

    • Few very large US railroads.

    • Mergers lead to fewer, larger railroads.

  • Average speed: 20-25 mph.

    • 80% of time spent loading, unloading & waiting.

  • Large size:

    • 1 car = 80-100 tons.

    • Average 60-80 cars per train.

    • 2-5 locomotives per train.

    • Most shipments are CL (carload).


Trucks motor carriers l.jpg
Trucks (Motor Carriers)

  • Products: Medium and light manufacturing, food, clothing, all retail goods.

  • System: 3,800,000 highway miles.

    • 42,500 miles of Interstates.

  • Average trip:

    • Truckload (TL): 200-300 miles.

    • Less-than-truckload (LTL): 600-700 miles.


Trucks motor carriers16 l.jpg
Trucks (Motor Carriers)

  • Public ownership of roadways.

    • Many, many trucking companies (>300,000).

    • Most are very small.

    • Truckload (TL): > 10,000 lbs.

    • Less-than-truckload (LTL): < 10,000 lbs.

  • Door-to-door service.

  • Small size:

    • 1 trailer = 40,000 lbs.

    • 40-53 feet long (small trailers are 28.5 ft.)

    • Can have 2 or 3 trailers per tractor in some places.


Slide17 l.jpg
Air

  • Products: Perishable and time sensitive goods.

    • Flowers, produce, electronics, mail, emergency shipments, documents, etc.

  • System: 160,000 miles.

  • Average trip: 1300 miles.


Slide18 l.jpg

Air

  • Public ownership of airways.

    • Terminal & ground facilities may be privately owned.

  • Very fast: 500-600 mph.

    • Door-to-door service requires trucks.

  • Size:

    • Large aircraft can carry 100 tons.

    • Can carry 8x8x40 ft containers.

  • Aircraft are very expensive to buy and operate.


Pipeline l.jpg
Pipeline

  • Products: Petroleum, oil, natural gas.

    • 3/4 of all crude petroleum.

  • System: 170,000 miles.

    • Texas has 1/4 of total.

  • Very dependable.

  • Can store large amount in transit.


Slide20 l.jpg

Pipeline

  • Private ownership of pipelines.

  • Very slow, but large capacity.

    • Can move 24 hr/day, 7 days per week.

  • Size:

    • 4-26 inch diameter.

    • Alaska pipeline: 48” diameter; moves 2 million barrels per day.

  • No vehicles!


Mode comparison l.jpg
Mode Comparison

Relative Delivery Product

Mode Price Time Value Damage

Water 1 4 1 1

Railroad 3.5 3 2 4

Truck 35 2 3 3

Air 80 1 4 2

1=fastest 1=least 1=least

Size: 1 barge = 15 rail cars = 60 trucks


Slide22 l.jpg

Intermodal Services

  • Combine two or more modes.

    • Rail+Truck or TOFC: trailer on flat car.

  • Used by 70% of shippers.

  • Containers:

    • 8’ x 8’ x 20’ (TEU) or 8’ x 8’ x 40’ (2 TEU’s)

    • Pack at origin; do not open until destination.

    • Used extensively in ocean transportation.

    • Large ships may carry >4000 20’ containers.


Slide23 l.jpg

Small Shipments

  • Many options:

    • LTL motor carriers, US Postal Service, UPS.

  • Freight Forwarders:

    • Do not own long haul equipment.

    • Handle transportation for shippers.

    • Can consolidate small shipments and arrange TL service.

  • Express shipments:

    • Federal Express, US Postal Service, UPS.


Slide24 l.jpg

International Transportation

  • Water is most important mode.

    • 99% of world trade volume by weight.

    • 50% of world trade volume by value.

  • Top US ports:

    • By tons: Houston, New Orleans, New York, Norfolk.

    • By value: LA/Long Beach, New York, Seattle/Tacoma, Houston.

  • Air handles 21% of world trade volume by value.


Slide25 l.jpg

Imports and Exports in Billions of $ (2000)

Mexico Canada Europe Pacific Rim

US Exports 100 150 170 190

US Imports 135 230 240 415

US Imports & Exports


Slide26 l.jpg

International Transportation

  • Legal issues, regulation and documentation can be extensive and detailed.

  • Political issues important.

  • Foreign trade zones encourage international transportation.

  • Regional free trade agreements:

    • NAFTA, European Community.


Slide27 l.jpg

Pacific Ocean Transportation

  • U.S. - Asia travel: 13-15 days

  • Major ports:

    Hong Kong Seattle/Tacoma

    Kaohsiung (Taiwan) Long Beach/LA

    Pusan (Korea) San Francisco

    Mumbai (Bombay, India)

    Sydney (Australia)


Slide28 l.jpg

Atlantic Ocean Transportation

  • Travel between U.S. and:

    • Europe: 10-12 days

    • South America: 20-30 days

    • South Africa: 35-40 days

  • Major ports:

    • Europe: Liverpool (England), Antwerp (Belgium), Rotterdam (Netherlands), Bremerhaven & Bremen (Germany), Genoa (Italy), Oporto (Portugal), Istanbul (Turkey).

    • South America: Buenos Aires (Argentina), Santos & Porto Alegre (Brazil).

    • South Africa: Durban, Capetown, Port Elizabeth.

    • U.S.: Houston, New Orleans, New York, Norfolk.


Slide29 l.jpg

Problems at Ports

  • Container imbalances.

    • More into U.S. than out of U.S.

  • Congestion - in water and on land.

  • Labor issues:

    • Lockout on U.S. west coast ports: 2002

  • Inspections into U.S.

    • Security.

    • Animal (insect) pests and diseases.


Slide30 l.jpg

Transportation Regulation

  • 1800’s: Railroad boom:

    • Near monopoly on inland transportation.

    • Led to abuses of shippers.

  • 1887: Railroads regulated:

    • Rates must be reasonable, fair and published.

    • ICC established for enforcement.

  • Other modes:

    • 1906: Pipelines regulated.

    • 1935 - 1940: Motor carriers, airlines and water carriers regulated.


Slide31 l.jpg

Features of Regulation

  • Government control over:

    • Rate adjustments.

    • Entry, expansion, acquisition & merger.

    • Safety.

  • Principle: Service change must benefit customers.

    • Burden of proof on carriers.

  • Little incentive for improved service.


Slide32 l.jpg

Deregulation

  • Transportation Deregulated: 1977-1985:

    • Rate can be changed as long as reasonable.

    • Entry, expansion, acquisition & merger rules relaxed.

    • Safety still addressed at federal and state level.

  • Burden of proof shifted to shippers.

  • Major changes for carriers and shippers.


Slide33 l.jpg

Deregulation Outcomes

  • Many new carriers, especially trucking firms.

  • Larger carriers created.

    • Existing carriers expand.

    • Many mergers & acquisitions.

  • Lower rates (?)

  • Good or Bad?


Slide34 l.jpg

Transportation Costs

  • Fixed Costs:

    • Vehicles.

    • Infrastructure (road, rail, pipeline, navigation, etc.).

    • Terminal facilities.

    • Administration.

  • Variable: Proportional to distance or volume.

    • Fuel, labor, handling, pickup & delivery, taxes.

  • Cost structure varies by mode.

    • Railroads: High fixed cost; Low variable cost.

    • Trucks: Low fixed cost; High variable cost.


Slide35 l.jpg

Transportation Costs

  • Allocating costs to shipments can be very complicated.

    • Many shipments move on same vehicle.

    • Marginal cost for additional shipment may be very low or very high.

    • Traffic imbalances (backhauls).

  • How to incorporate backhauls (return trips)?

    • Allocate all costs to forward haul?

    • Allocate some costs to backhaul?


Slide36 l.jpg

Transportation Rates

  • Rate is price carrier charges for service.

    • Should reflect costs and value of service.

    • Linehaul rate + additional charges for special services.

  • Line-haul rate from origin terminal to destination terminal.

  • Additional charges for terminal services, extra protection, stop-offs, etc.


Slide37 l.jpg

Line-haul Rates

  • Depend on product, distance and volume (weight).

  • Strong economies of scale:

    • Cost per cwt decreases with weight.

    • Cost per mile decreases with distance.

  • Under regulation, pricing was very complicated.

    • Rating or classification system for EVERY product.

  • Simpler now, and negotiation is important.


Slide38 l.jpg

Line-haul Rates

  • Carriers offer discounts from published rates.

    • Published rates may be based on rating system.

    • FAK (Freight-all-kinds) rate applies to any product.

  • Rates may be negotiated based on:

    • Products.

    • Lane.

    • Volumes on a given lane.

    • Volume of business overall.


Slide39 l.jpg

Additional Charges

  • Pickup and delivery.

  • Changing destination.

  • Use of multiple carriers.

  • Switching in rail yards.

  • Demurrage and detention: retaining vehicles longer than agreed.


Slide40 l.jpg

Documentation

  • Bill of Lading: Legal contract between shipper and carrier.

  • Freight Bill: Charge for service

  • Freight Claim:

    • For loss, damage or delay.

    • For overcharges.

  • Much more documentation is usually required for international transportation.


ad