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Overview of Transportation Modes and Intermodal Services

The content discusses the history, advantages, and characteristics of pipeline transportation, particularly in the context of oil and gas. It also explores the concept of intermodal transportation, showcasing the benefits of combining different modes like rail, road, and sea for efficient and cost-effective logistics operations. Various intermodal services such as piggyback and roadrailers are explained, along with the role of logistics villages in streamlining supply chain activities.

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Overview of Transportation Modes and Intermodal Services

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  1. 1 Chapter 8 Transportation 1

  2. PIPELINE – The first pipeline in US was built in 1865. This pipeline (6,5 km length) for oil transportation had used. – By increasing of production and consumption of natural gas and oil, pipeline systems building has been also increasing. – Transportation costs are lower than in the road and rail transport, but sea transport has lower costs (especially for petroleum products) than pipeline system. 2

  3. PIPELINE – Only a few products can be transported by pipelines:petroleum products, gas, liquid chemicals – Pipeline has dual role: it is mean of transportation, and in the same time road. – In contrast to the other modes, only goods move – means stand. – Pipelines have very high fixed costs but very low variable costs. – Losses and damages are rare – Climatic conditions have minimal effect – Flow is monitored and controlled by computer – Not labor intensive 3

  4. Bakü-Tiflis-Ceyhan Oil Pipeline-2006 4

  5. Blue Stream Pipeline-from Russia through Black Sea • 5

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  7. Relative Rankings of Transportation Mode by Cost and Operating Performance Characteristics PERFORMANCE CHARACTERISTICS Delivery-Time Variability Absolute 1=Least Costb 1=Highest Percent d 1= Least Mode of Transport ation Average Delivery Timec 1= Fastest 3 2 5 4 1 Loss and Damage 1= Least Rail Truck Water Pipe Air a Service is assumed to be available b Cost per ton-mile cDoor-to-door speed d Ratio of absolute variation in delivery time to average delivery time 3 2 5 4 1 4 3 5 2 1 3 2 4 1 5 5 4 2 1 3 7

  8. INTERMODAL TRANSPORTATION • The carriage of goods by at least two different modes of transport in the same loading unit (an Intermodal Transport Unit-ITU) without stuffing or stripping operations when changing modes. • Unit load: vital element of intermodal-consignment of freight into a swap body or in a container in order to save from transhipment or repacking time-cost- handling. • Intermodality enables economies of scale within a transportation system where modes are used in the most productive manner. 8

  9. INTERMODAL TRANSPORTATION • Enables a systems approach to transport : MODE- INDEPENDENT DOOR-TO-DOOR CONNECTION • Safer transit for dangerous products • Reduced consumption of fossil fuels • Reduction in road traffic congestions • Lower transit costs • Faster delivery times • More efficient and cost-effective use of the transport system in an environmentally sustainable manner. 9

  10. INTERMODAL SERVICES 1. Piggyback –TRAILER-ON-FLATCAR (TOFC) –CONTAINER-ON-FLATCAR (COFC) 2. Road Railers 3. Other Combinations Air-water,air-rail,rail-water 10

  11. 1. PIGGYBACK • A motor carrier trailer or a container is placed on a rail flatcar and transported from one terminal to another. • Combines low cost of long haul rail and flexibility and convenience of truck. • Railroad carries freight on the long haul and trucking company picks up and delivers between customer and railroad. 11

  12. TOFC • TOFC (trailer-on-flat- car) refers to transporting truck trailers (semi-trailers) on rail flatcars, usually over longer distances than truck normally haul 12

  13. COFC • COFC (container-on-flat- car) refers to transporting standardized containers. • Container is transferable to all transportation modes with the exception of pipeline 13

  14. 2. Roadrailers • An innovative intermodal concept was introduced in late 1970’s. • Roadrailers (trailertrains) combine motor and rail transport in a single piece of equipment. • Trailer has steel rail wheels and rubber truck tires-can go on highway as well as on railroad without the need of rail flatcars • Less switching time • Disadvanteges: added weight of rail wheels-higher costs and higher consumption of fuel. 16

  15. Logistics Villages • The clusters in which various organisations provide all activities related with logistics. • With the beginning of 2012, there are 70 logistics villages registered to Europlatforms (i.e: in Germany, France, Italy, Greece, etc.) • In Turkey, there are 12 logistics villages to be planned by TCDD: İstanbul (Halkalı), İzmit (Köseköy), Balıkesir(Gökköy), Uşak, Eskişehir (Hasanbey),Samsun (Gelemen), Denizli (Kaklık),Mersin (Yenice), Kayseri (Boğazköprü),Konya (Kayacık), Erzurum (Palandöken) ve Bilecik (Bozöyük). 17

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  17. Logistics Villages (Cont’d) • Istanbul Metropolitan Municipality has also planned 2 logistics villages: Hadımköy and Tuzla • Besides these, there are two more projects developed by public and private institutes:Tekirdağ/Çorlu and Manisa (MOSBAR) 19

  18. Some activities provided in Logistics Villages • Warehouse • Distribution • Customs • Inventory Management • Packaging • Order Management • Materials Handling • Intermodal Transportation 20

  19. Qatar Logistics Village Layout 21

  20. Logistics Villages – Nuremberg (Germany) 22

  21. 74 CARRIER OPTIONS • Motor • Rail • Air • Water • Pipeline • Intermodal services n Third parties n Small- package carriers 23

  22. -THIRD PARTIES • Similar to channel intermediaries that provide linkages between shippers and carriers • Often, third parties do not own transportation equipment • They partner with a number of carriers who provide the necessary equipment to transport their shipments 24

  23. 75 Types of Third Parties 1. Transportation brokers 2. Freight forwarders (domestic and foreign) 3. Shippers’ associations 4. Intermodal marketing companies ( shippers’ agents) 5. Third-party logistics service providers 6. Fourth party logistics service providers 7. Small package carriers 25

  24. 1.Transportation Brokers • They provide services to both shippers and carriers by arranging and coordinating products. the transportation of • They charge a fee to do so, which usually is taken as a percentage of the revenue collected by the broker from the shipper. • The broker partially replaces one of the firm’s own traffic department 26

  25. 2. Freight Forwarders • Freight forwarders purchase transport services from various carriers, although in some instances they own the equipment themselves. • They consolidate small shipments from a number of shippers into large shipments moving into a certain region at a lower rate. • Domestic/international or surface/air • Because of consolidation efficiencies, these companies can offer shippers lower rates than the shippers could obtain directly by the carrier. 27

  26. Differences Between a Freight Forwarder and a Transportation Broker • A forwarder is the shipper to a carrier and the carrier to a shipper. • A broker is neither a shipper nor carrier, but an intermediary between the two. • A forwarder can arrange for transportation of freight or any mode. • A broker can arrange for freight transportation only by a motor carrier. • A forwarder is primarily liable to a shipper for cargo loss and damage. • A broker is not usually liable for cargo loss and damage, although many do provide this coverage. 28

  27. 3. Shippers’ Association • In their operations, shippers’ associations are much like freight forwarders, but they differ in terms of perception by regulatory authorities. • A shippers’ association can be defined as a nonprofit cooperative that consolidates small shipments into truckload freight for members’ companies. • They primarily use truck and rail carriers for transport-large blocks of rail wagons-use also TOFC(trailer on flat cars) 29

  28. 4. Intermodal Marketing Companies (IMC or Shippers’ Agents) • They specialize in providing piggyback services to shippers and are an important intermodal link between shippers and carriers. • They purchase large quantities of services at a discount and resell them in small quantities. TOFC/COFC 30

  29. 5. Third-Party Logistics Providers ( 3PLs) • Third party logistics providers typically specialize in integrated operation, warehousing and transportation services that can be customized to customer’s needs based on market conditions and the demands and delivery service requirements for their products and materials. • The companies known as ‘logistics’ companies in market. • Balnak Logistics, Elmas Logistics, Barsan Logistics... 31

  30. 6. Fourth-Party Logistics Providers ( 4PLs) • The 4PL acts as a single point of interface with the client organization and provides the management of multiple service providers through a teaming partnership or an alliance. • 4PL uses a 3PL to supply service to customers, owning only computer systems and intellectual capital. • To be successful, a 4PL leverages a full range of service providers (3PLs, IT providers, contractlogistics providers, call centres, etc.) along with the capabilities of the client and its supply chain partners. 32

  31. 7. SMALL-PACKAGE CARRIERS • For companies such as electronic firms, catalog merchandisers, companies, textbook distributers, small- package carriers can transportation options • Uses a combination of different modes, especially air. • FedEx, DHL cosmetic be important 33

  32. Legally Defined Forms of Transportation • Common Carriers: published rates, offering to general public, demand is uncertain • Contract Carriers: serve to a limited number of shippers under contractual agreements, demand is known, specified cost • Exempt Carriers: transport certain products like fish, newspapers,unprocessed agriculturals. • Private Carriers: a firm owns and transports primarily for its own products-leases equipments- flexibility-cost- service advantage 34

  33. Cost-of-Service Pricing ...establishes transportation rates at levels that cover a carrier’s fixed and variable costs, plus allowances for some profit. Value-of-Service Pricing ...is based on charging what the market will bear; and is based on the demand for transportation services and the competitive situation. 35

  34. Incentive Pricing Arrangements • Quantity Discounts - Cumulative quantity discount on the amount of purchases over some prescribed period of time - Non-cumulative quantity discount *applied to each order * larger shipments 36

  35. 7 9 Mode/Carrier Selection Process 1. Problem recognition 2. Search process 3. Choice process 4. Post-choice evaluation 37

  36. Constraints for Mode/Carrier Selection • Economic and resource constraints • Competitive pressures • Customer requirements 38

  37. 1. Problem Recognition • Customer requirements, dissatisfaction with an existing mode, and changes in the distribution patterns of the firm affect this stage 39

  38. 2. Search Process • Transportation executives scan a variety of information sources to aid them in making optimal mode/carrier decisions • Possible sources are: – Past experiences, – Carrier sales calls, – Company shipping records, – Customers of the firm 40

  39. 3. Choice Process • ...involves the selection of an option from the several modes and carriers available • the transportation executive determines which of the available options best meets the firm’s customer service requirements at an acceptable cost 41

  40. 4. Post-choice Evaluation • Once management has made its choice of mode or carrier, it must institute some evluation procedure to determine the performance level of the mode/carrier – customer complaints, – cost studies, audits, – reviews of on-time pick-ups and delivery performance 42

  41. Creating possible alternatives depend on: 1) Technological characteristics of the origin and destination points (Port,Road,Railway) 2) Characteristics of goods 3) Distance 4) Quantity of goods 5) Available time for transit 6) Customer service level required 43

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