1 Chapter 7 Transportation
Transportation includes the following activities: • Mode selection • Freight consolidation • Carrier routing • Vehicle scheduling • Rate auditing
Transportation-Logistics-Marketing Interface • Moving product to the markets that are geographically separated • Transportation cost impacts the selling price • Providing added value to customers-transporting the products to the right place in right condition, at right time, in right quantities. • Transportation contributes to the improvement of customer service levels and in consequence to providing customer satisfaction
Transportation service characteristics affecting customer service level • Consistency of service • Time-in-transit • Market coverage (door-to-door service) Air-water-pipeline-rail transport---terminal to terminal / Road transport----door to door • Loss/damage performance • Flexibility (having flexible network) • Versatility (transporting different products in varying sizes and weights)
1 7 Factors Influencing Transportation Costs PRODUCT-RELATED FACTORS • Density: Weight to volume ratio ( relatively heavy to given size) Low density products ( toys, clothing) are high in transportation costs High density products ( steel, canned food) are low in transportation costs • Stowability: (cube utilization) Degree to which a product can fill the available space in a transport vehicle. Petroleum versus machines • Ease or Difficulty of Handling • Need for Strong Protective Packaging • Products’ Hazardous Characteristics • Liability : Value to weight ratio high liability-jewelry, art paintings
MARKET-RELATED FACTORS • Government regulation • Freight traffic into and out of a market • Domestic versus international movement • Degree of intramode/intermode competition • Location of markets • Seasonality of products
MAIN TRANSPORTATION MODES Each mode is characterized by a set of technical and operational attributes. • Road transportation • Rail transportation • Air transportation • Water transportation • Pipeline
ROAD TRANSPORTATION • It is the most commonly used mode of transportation (e.g: Turkey95%, USA43% forlocalandregionaltransportation) • Relatively rapid transit times in local and regional transportation • Road transportation is versatile, numerous types of vehicles in use, that can carry varying sizes and weights over any distance : Bulk materials, liquids, containers to refrigerated goods.
ROAD TRANSPORTATION • Road transportation is flexible and haswidest market coverage Road network is very developed and branchy- this enables point-to-point service between almost all origin-destination combinations • FACT : There are more buses and trucks in Turkey than the total number of all buses and trucks that European countries have.
RAIL TRANSPORTATION InTurkey • Lacks versatility: fixed to track facilities-rail network incapabilities • Lacks flexibility:terminal-to-terminal services unless the companies have a rail siding at their facility like in Vestel
RAIL TRANSPORTATION • it is a relatively cheap form of transport. water-pipeline-railways-motorways-airway Cost of building 1 km. highway= Cost of building 5 km. railway • this relative cheapness is particularly important factor if the freight consignments are bulky and heavy • the movement is for medium to long distances • if the speed is not very important attribute (in general rail transport is relatively slow)
High speedrail • Generallyforpassengertransportation Routes: • Ankara-Konya • Ankara-Eskişehir (250km/h) -------Ankara-İstanbul and Ankara-İzmir linesareunderconstruction • In USA, France and Japan, there are trains with 450 km/h speed that compete with air transportation.
TermsforRailways • A railroad car (railway carriage) is a vehicle on a rail transport system (railroad or railway) that is used for the carrying of cargo or passengers. • A unit train (block train), is a railroad train in which all the cars are shipped from the same origin to the same destination.
RailcarTypes Hazırlayan:2/V Müd.Yrd İlhan ÇETİN
RailwayProjects • In 2012, theallowanceforrailwaysincreasedto 4.1 billion TL andprojectshavebeenlaunchedouttodevelopinternationalrailways: • Marmaray (London-China) • Kars-Tiflis-Bakü (toregenerate Silk Road) • BALO Project (Büyük Anadolu Lojistik Organizasyonu)(TOBB,Utikad, etc.)
Privatization • Railcarownership • Railcarrentals • Reform in TurkishRailways-With a new regulation, railways will also be privatized like airways to create market competition. • By these regulations, private companies can manage their own coaches, locomotives and personnel to have their own freight train business.
Characteristics of Air Transportation • Suitable for emergency and high value to weight products like fashion goods and spare parts, premium ( customer service importance) service • Quickest transit times on long distances and international movements • Damage and breakages are less. • Frequent and reliable service • Very flexible and can be operated without establishing costly stock-holding networks. • There may be delays due to airport congestion or due to handling and paperwork. • It is very costly. Consumes more energy per ton-kilometer than any other transport mode.
The busiest airports • HJ ATLANTA, US - 92.365.860 passengers/year • BEIJING International, China - 77.403.668 • LONDON Heathrow, UK - 69.433.565 • CHICAGO O’Hare, US - 66.561.023 • TOKYO Int., Japan - 62.263.025
Contemporary issues • 3rd airport in Istanbul6 landingfields on 3.500 hectares. • Passengercapacity of 120 million.
WATER TRANSPORTATION • Global sourcing, container ships, VLCC (very large crude carriers) • Common differentiation of water transportation • Inland waterways transport (e.g. Amsterdam) • Sea transport
WATER TRANSPORTATION • Suitable for bulk goods and low price goods (coal, oil, coal, wood,…) -In containers variable goods can be transported • Depends on geography, rivers and channels network • Generally, transport distances are longer • Slow transportation and long transit times • Depends on climate and seasonal characteristics (fog, water level, ice)
Characteristics of Water Transportation • Most of the foreign trade uses sea type of transport. • Energy usage per ton-kilometer is the least in comparison to the other modes. • Transportation costs are 2-3 times lower than in rail. • Advantages of sea transport can be visible at distances longer than 1000 km. • Port management and port’s equipment is very complex and expensive
Somefacts Thebiggestports in theworld (in terms of workload) Singapore Rotterdam, Netherlands South Louisiana, U.S.A. Shanghai, China Hong Kong, China Houston, U.S.A Chiba, Japan Nagoya, Japan Ulsan, South Korea Kwangyang, South Korea • The share of water transportation in total exportis 52% in Turkey. • While Greece gains 60 billion $ with water transportation, Turkey’s share is nearly 2,5 billion $. Rotterdam port
Some characteristics of the biggest ports in Turkey • Mersin: 21 docks enables to handle nearly 30 ships at the same time. In a year, the average tonage of handling is 15 billion. • İzmir: The length of the dock is 2.959 m, and in a year 3.640 ships visit the port. • Trabzon: The biggest port of Eastern Black Sea. In 2009, 1.242 ships visited the port and 21.000 containers are handled. • İskenderun: The length of the dock is 1.426 m, and the capacity of the port is 640 ships/year.
Contemporary issues Petkim Container Port Çandarlı Container Port It will be the biggest container port of Turkey and one of the biggest top 10 container ports of the world. It will create employment for 15.000 people. It will bring approximately 700 billion TL /year. • It will be the biggest integrated port of Aegean region. • Its capacity will be 50% more than Alsancak port. • Integrated to railways. • In total, 48 hectare will be separeted as logistics area. • 700 m. dock-11000 TEU vessels can berth