Transportation and Distribution ManagementUTCC Transport mode and Intermodal transport.
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Transcript of Transportation and Distribution ManagementUTCC Transport mode and Intermodal transport.
Transportation and Distribution Management UTCC
Transport mode and Intermodal transport
Transportation and Distribution Management UTCC
Contents
• Introduction• Operational factors• Transport mode characteristics• Method of selection• Aspects of international trade• Intermodal transport• Intermodal equipment• Intermodal vehicles• References
Transportation and Distribution Management UTCC
Introduction
• Companies move toward global operations has had impact on different modes of transport.
• In global context, more products are moved far greater distances with concepts of focus factories.
• Single global manufacturing point for certain products and concentration of production facilities
on low-cost manufacturing locations.
Transportation and Distribution Management UTCC
Introduction (Cont.)
• In Europe, road freight transport is the dominant mode of transport.
• The upward trend of road transport have continued for many years but its trend may have
reached a plateau.• Rail freight has declined for many years but its
trend is stable.• Inland waterways are also important.
• Pipeline has continued for certain specialized movements.
Transportation and Distribution Management UTCC
Transportation and Distribution Management UTCC
Introduction (Cont.)
• To select the most appropriate transport mode, both costs and customer service must be
balanced.
• Hence, characteristics of different modes and method of selection are important.
Transportation and Distribution Management UTCC
Operational factors
• These factors vary from country to country:
1. Basic infrastructure.
2. Trade barriers (custom duty, import quotas, etc.).
3. Export controls and licenses.
4. Law and taxation.
5. Financial institutions and services, and economic conditions (exchange rate stability, inflation, etc.).
6. Communication systems.
7. Cultures
8. Climate.
Transportation and Distribution Management UTCC
Operational factors (Cont.)
• Customer characteristics:
1. Service level/ type of service location.
2. Delivery point constraints (access, equipments, etc).
3. After-sales service needs.
4. Credit rating
5. Terms of sale preference (CIF/FOB)
6. Order size preference
7. Customer importance
8. Product knowledge
• Customer service (speed, reliability, etc)
• Physical attributes (order or drop size, location, etc)
Transportation and Distribution Management UTCC
Operational factors (Cont.)
• Physical product characteristics:
1.1. Volume to weight ratioVolume to weight ratio : the relative amount of cubic capacity taken up by a given weight of product.
• For example, one tone of paper tissues takes up far more space than one ton of brocks.
• Charging structures: by weight or by cubic volume.
2.2. Value to weight ratioValue to weight ratio : the value of the product to be transported.
• The relative transport cost of a high-value, low-weight product is likely to be so insignificant to the overall
value of product that the choice of mode from a cost perspective is irrelevant (jewelry or computer chips).
Transportation and Distribution Management UTCC
Operational factors (Cont.)
3.3. SubstitutabilitySubstitutability : Product alternative.• If a product can be substituted by an alternative from
another source, fast but expensive transport mode may be used to ensure the order is accepted by
customer.• If no substitute product is available, a slower and less
expensive can be used. 4.4. Special characteristicsSpecial characteristics : hazard, fragility, perishability,
time constraints, security.• Chemicals may be restricted in how it is allowed to be
transported. • A time-constrained product may have to be moved on
a fast and expensive mode of transport (newspapers)
Transportation and Distribution Management UTCC
Operational factors (Cont.)
• Fixed factors impose on any newly devised system:
1. Product locations.
2. Supply points.
3. Warehouse and storage facilities.
4. Own transport.
5. Marketing plans and policies.
6. Financial situation.
7. Existing delivery system.
Transportation and Distribution Management UTCC
Transport mode characteristics
Sea freightSea freight • For conventional sea freight, main points are:
1. Cost economies.• Bulk goods, large packaged consignments that
are going long distances and speed of service is unimportant.
2. Flexibility• Many liners and tramp ships, many ports (large
and small).• Sailings are frequent.
• Number of alternatives are open.
Transportation and Distribution Management UTCC
Transport mode characteristics (Cont.)
3. Availability
• Liners services are widely advertised, extensively categorized, and can be accommodated.
4. Speed.
• The actual voyage time is slow.
• The turnaround time in port.
5. Need for double-handling.
• Inefficient handling methods
6. Delay.
• Pre-shipment delays, delay at discharge port, and unexpected delays due to bad weather, missed tides.
7. Damage. Double handling cargo.
Transportation and Distribution Management UTCC
Transportation and Distribution Management UTCC
Transportation and Distribution Management UTCC
Transport mode characteristics (Cont.)
Road freightRoad freight • Road freight is the most important mode within
Europe and UK. • It consists of the through transport of goods from
factory or warehouse direct to customers abroad.• International distribution from UK is in terms of the
use of roll-on,roll-off (RORO) ferry services and the Channel Tunnel route.
• Quick service if ferry/tunnel schedules are carefully times into the route plans.
Transportation and Distribution Management UTCC
Transport mode characteristics (Cont.)
• It is cost competitive in a case of complete unit loads with single origin and destination points.
• Reduce need to double handle and tranship goods and packages.
• Completely eliminate direct, full load deliveries which saves time and minimizes the likelihood of
damage.• A great flexibility for through movement as unit
load in cross-Channel routes.
Transportation and Distribution Management UTCC
Transport mode characteristics (Cont.)• It is Packaging cost is kept at minimum since
loads are less susceptible to the extreme transit ‘shock’ that other modes can cause.
• They system provides regular, scheduled services due to frequent ferry/tunnel ‘sailings’ and due to
the flexibility of road vehicle scheduling.
• The RORO/tunnel system loses many of its advantages when used for less than lorry-sized loads. These entail group and involve double-
handling (at both ends of the journey), additional packaging and time delay.
Transportation and Distribution Management UTCC
Transport mode characteristics (Cont.)
Rail freightRail freight • The development of containerized systems using
ISO containers as the basic unit load.• Conventional rail freight system is a relatively
cheap form of transport, especially, bulky and heavy consignments that require movement over medium to long distances and where speed is not
vital.• Shunting shocks can cause damage.
• Need to double-handle loads because the first and last led of a ‘through’ journey often needs to be by
road transport.
Transportation and Distribution Management UTCC
Transport mode characteristics (Cont.)
• Limited number of railheads available-many companies with railway sidings on their premises
have closed them down.
• Rail transport is very slow mean of carriage.
• Rail freight transport is very unreliable. Batches of wagons may arrive at irregular intervals.
• Further delays for international traffic if a complete shipment is on a single customs document.
Transportation and Distribution Management UTCC
Transport mode characteristics (Cont.)
Air freightAir freight
• Air freight is competitive over longer international movements. It has rapid transit times over these
longer distances.
• Fast transport but it can be delayed at airports.
• Lead-time economy. It is unnecessary to hold stocks in the counties. The short lead time required between the ordering and receiving of goods results
in savings of inventory holding costs.
Transportation and Distribution Management UTCC
Transport mode characteristics (Cont.)
• Market flexibility. Number of counties and markets can be reached quickly and easily. A company need not
to set up stock holding network.
• Suitable for commodities with high value to weight ratios, perishable,s, fashion foods, emergency
supplies, and spare parts (class A).
• Delivery time lost due to airport congestion, and handling and paperwork delays.
• Severe lapses in security of good moved.
Transportation and Distribution Management UTCC
Transport mode characteristics (Cont.)
Container systemsContainer systems
• Container system is a fundamental feature of all the major national and international transport modes-
road, rail, sea, and air.
• Containerization supports the development of the “intermodal’ system of freight transport.
• Enable the uncomplicated movement of goods in bulk from one transport mode to another.
Transportation and Distribution Management UTCC
Transport mode characteristics (Cont.)
• Enable a number of small packages to be consolidated into large single unit loads.• Reduction in handling of goods.
• Reduction in individual packaging requirements, depending on load within the container.
• Reduction in damaged products caused by other cargo.
• Insurance charges are lower due to the reduced damage potential.
• Handling costs at the docks and the at the other model interfaces are reduced.
• Quicker turnaround for all the types of transport used. Port utilization improves.
Transportation and Distribution Management UTCC
Transport mode characteristics (Cont.)
• The all- around delivery time is speedier and raises service levels.
• Simpler documentation.
• Through transit becomes feasible and allow for a truly integrated transport system to be developed.
• A need for special facilities and handling equipments.
• The initial cost of the containers is very high.
• The return of empty containers are expensive.
• Containers may leak, causing damage due to rain.
• Loads may be affected by their position of stow, e.g. above or below deck.
Transportation and Distribution Management UTCC
Transport mode characteristics (Cont.)
Transportation and Distribution Management UTCC
Transport mode characteristics (Cont.)
Transportation and Distribution Management UTCC
Transport mode characteristics (Cont.)
Transportation and Distribution Management UTCC
Transport mode characteristics (Cont.)
Transportation and Distribution Management UTCC
Method of selection
1. Identify operational factors• External • Customer• Product
• Other logistical2. Identify transport mode characteristics
• Sea• Inland waterway
• Road• Rail• Air
• container
Transportation and Distribution Management UTCC
Method of selection (Cont.)
3. Determine major consignment factors
• Routing responsibility
• Distance
• Cargo type
• Priority
4. Make trade off
• Service
• Costs
Transportation and Distribution Management UTCC
Method of selection (Cont.)
1. Routing and through transit responsibility
• Is a direct route stipulated?
• Who is concerned with the through transit?
2. Distance
• What is the distance to be moved?
3. Type of cargo
• If bulk or general cargo, will a certain specific route be best?
4. Quantity
• Full load or part load?
Transportation and Distribution Management UTCC
Method of selection (Cont.)5. Unit size
• Small or large?• Will unitization help?
• Is group an alternative?6. Priority
• How soon must the goods reach their destination?• Does “urgent” really mean “urgent”?
7. Commodity value • How important is the transport cost element?• If import/export, how is the commodity rated?
8. Regular shipments size • How often will these shipments be made?
Transportation and Distribution Management UTCC
Method of selection (Cont.)
• The final decision is made based on trade off between cost and service.
• It must be undertaken with relevant operational factors, transport mode characteristics and
consignment factors.• The volume of freight to be moved and the
distance to be traveled dictate the choice of mode.
• Other elements e.g. speed of delivery required or reliability of service may override these purely
economic factors.
Transportation and Distribution Management UTCC
Method of selection (Cont.)
Transportation and Distribution Management UTCC
Aspects of international trade
• The introduction of a number of international trade agreements and economic unions e.g. EU,
NAFTA, ASEAN, etc., has had a major impact on the globalization of trade.
• In Europe, major barriers are being overcome includes:
• Physical barriers-removal of customs control, single administrative document and immigration
and passport control.
Transportation and Distribution Management UTCC
Aspects of international trade (Cont.)
• Technical barriers- removal of all barriers to trade between member states, free movement of goods,
capital, services, and workers, harmonization of technical standards, common protection of
intellectual and industrial property.
• Fiscal barriers – approximation of indirect taxation (VAT and excise duties), and consequent removal
of fiscal frontier checks.
• Access to Central and Eastern European countries.
• Introduction of the euro currency.
Transportation and Distribution Management UTCC
Aspects of international trade (Cont.)
• Goods and services can be bought anywhere in the community.
• Customs barriers have been virtually abolished.• Documentation has been simplified and
standardized.• Operating (transport) permit restrictions have
been removed.• Testing standard are acceptable in all
community states.• Free movement of capital.
Transportation and Distribution Management UTCC
Aspects of international trade (Cont.)
• More competition between TPL companies because of increased market.
• Transport and TPL distribution companies can give a more European-wide service.
• Easier and faster movement of goods across borders.
• Distribution and transport can be bought in any countries.
• Increased opportunities for joint ventures with other European or international operators.
• New depot locations and consequent transport flows can be determined to suit both sources and
markets.
Transportation and Distribution Management UTCC
Aspects of international trade (Cont.)
Crucial elements to be considered:Crucial elements to be considered:• Type of payment: an open account, a draft, a letter
of credit, and cash in advance.• Taxes and duties: Import tariffs, value added tax
or quota payment.• Transport costs: costs related to different modes.
An allowance for inland carriage from point of origin, plus international carriage, plus final delivery from
the destination port.• Associated transport charges: port fees, bunker
adjustment fees or fuel charges.• Other charges: insurance, break bulk, storage and
handling.
Transportation and Distribution Management UTCC
Transportation and Distribution Management UTCC
Aspects of international trade (Cont.)
Document requirements:
• The shipper’s export declaration
• Bill of lading
• Consular documentation
• Single administration document (SAD)
• Certificate of origin
• Packing note
• Insurance certificate
• Export clearance
• Customers requirements for import and export.
Transportation and Distribution Management UTCC
Aspects of international trade (Cont.)
Freight forwarders’ services: • Preparation and checking of shipping
documents.
• Booking space with carriers.
• The order collection from the point of origin to the shipping port.
• Customs clearance and final delivery at the destination country.
Transportation and Distribution Management UTCC
Aspects of international trade (Cont.)
Freight forwarders’ services: • Provision of advice in export regulations,
documentation requirements, etc.
• Detailed knowledge of carriers, ports, etc.
• Knowledge of the different modes of international transport.
• Knowledge of the different costs with modes/destinations.
Transportation and Distribution Management UTCC
Intermodal transport
• Intermodal transportIntermodal transport is the movement of goods the movement of goods in one and the same loading unit or vehicle, in one and the same loading unit or vehicle, which uses successively several modes of which uses successively several modes of
transport without handling of the goods transport without handling of the goods themselves in changing modesthemselves in changing modes.
• Freight containers have ability to move freight swiftly and safely aids the logistics process, as the
elimination of wasted time.
• They can also be traced through the transport system and their progress monitored.
Transportation and Distribution Management UTCC
Intermodal equipment
Intermodal container
ISO containers
• International Standards Organization have defined the important features of the container e.g.
dimensions, to allow for the widest possible use of this equipment around the world.
• Containers are rectilinear steel boxes.
• Their common sizes are 20, 30, 40, 45 feet in length.
• The height and width dimensions are the same for all lengths at 8 fee wide by 8 feet 6 inches high.
Transportation and Distribution Management UTCC
Intermodal equipment (Cont.)
steel boxes.
• Their common sizes are 20, 30, 40, 45 feet in length.
• The height and width dimensions are the same for all lengths at 8 fee wide by 8 feet 6 inches high.
• Twenty feet equivalent unit (TEU) refers to the 20- feet container.
• Forty feet equivalent unit (FFU) refers to the 40-feet container.
Transportation and Distribution Management UTCC
Intermodal equipment (Cont.)
The swap body
• A container used on bimodal operations, road and rail.
• Three standard lengths – 7.15, 7.45, and 7.82 meters.
• It is transferred from road vehicle to rail wagon by means of an overhead straddle crane.
Transportation and Distribution Management UTCC
Intermodal equipment (Cont.)
Transportation and Distribution Management UTCC
Intermodal equipment (Cont.)
Road-Railer trailers
• Road-Railer refers to a method of converting a road-going articulated semi-trailer into a rail-going rail
wagon.
• Placing a railway bogie under the rear of a specially designed road semi-trailer.
• The road wheels of the semi-trailer are mechanically retracted to prevent them from interfering with the
movement of the train.
• Rapid transfer of vehicle from road to rail.
Transportation and Distribution Management UTCC
Intermodal equipment (Cont.)
Transportation and Distribution Management UTCC
Intermodal equipment (Cont.)
Unaccompanied trailers
• Unaccompanied road semi-trailers may be used to send goods by roll-on roll-off sea ferry (RORO).
• Tariffs on service relate to the length of the vehicle.
• Unaccompanied trailer will be shorter and cheaper.
• Unaccompanied trailers are moved on and off the ferry by means of a motive unit fitted with a
hydraulic mechanism for attaching in front of the trailer and lifting the semi-trailer without the need to
raise the landing legs.
Transportation and Distribution Management UTCC
Intermodal equipment (Cont.)
Transportation and Distribution Management UTCC
Intermodal equipment (Cont.)
Piggyback
Transportation and Distribution Management UTCC
Intermodal equipment (Cont.)
Transportation and Distribution Management UTCC
Spine rail wagon
Transportation and Distribution Management UTCC
Intermodal equipment (Cont.)
Intermodal handling equipment
Transtainers• Large devices mounted on rails, which are able
to transfer containers from the sea-going vessel to trucks or rail wagons.
• A large boom spans the distance between the ship’s cargo and the quayside.
• Moving along the quayside parallel to the ship’s side to aid positioning.
Transportation and Distribution Management UTCC
Intermodal equipment (Cont.)
Transportation and Distribution Management UTCC
Intermodal equipment (Cont.)
Transportation and Distribution Management UTCC
Intermodal equipment (Cont.)Gantry (portal) crane
• Straddle carrier is a crane designed to life containers and swap bodies.
• It has four legs, one at each corner, with wheels at the bottom of each leg.
• It is equipped with a spreader beam that has a twist-locking device at each corner, with locates in the
corner casting of the container.
• The spreader beam is able to move in several directions to aid accurate location either of the
spreader beam prior to pocking up the container or when positioning the container on a road vehicle or
rail wagon.
Transportation and Distribution Management UTCC
Intermodal equipment (Cont.)
Transportation and Distribution Management UTCC
Intermodal equipment (Cont.)
Transportation and Distribution Management UTCC
Intermodal equipment (Cont.)
Reach stacker• A heavy-duty material handling truck that is fitted
with a lifting arm and a spreader beam.
• Capable of lifting containers and swap bodies.
• Load and unload road and rail wagons.
• Stack containers one on top of the other and to reach over a row of stacked containers.
Transportation and Distribution Management UTCC
Intermodal equipment (Cont.)
Transportation and Distribution Management UTCC
Intermodal equipment (Cont.)
Transportation and Distribution Management UTCC
Intermodal vehicles
The cellular ship
• A custom-built seagoing vessels for containers carriage.
• Containers are loaded one on top of the other and guided into position by the means of vertical guides
at each corner of the container.
• The stacks on containers are secured by means of deck lashings for added stability during the sea
journey.
Transportation and Distribution Management UTCC
Intermodal vehicles (Cont.)
Transportation and Distribution Management UTCC
Intermodal vehicles (Cont.)
The roll-on roll off ferry (RORO)
• A sea vessel that is designed to carry road vehicles.
• The vehicles are either driven on the vessel by the driver or by port-based vehicle.
• Allow unaccompanied vehicles or trailers to be delivered to the port of departure and then collected
from the port of arrival.
• Other roll-on roll-off ferry are designed to carry rail wagons.
• The decks of these vessels are equipped with railway lines to allow ease of loading rail wagons.
Transportation and Distribution Management UTCC
Transportation and Distribution Management UTCC
Intermodal vehicles (Cont.)
Transportation and Distribution Management UTCC
Intermodal vehicles (Cont.)
Skeletal trailer• a semi-trailer designed to carry ISO containers.• All the carriage of different sizes of containers.
44-ton trailer• Large vehicles that have six axles may operate
at a gross vehicle weight of 44 tons.
Transportation and Distribution Management UTCC
Transportation and Distribution Management UTCC
Intermodal vehicles (Cont.)
Transportation and Distribution Management UTCC
Intermodal vehicles (Cont.)
Transportation and Distribution Management UTCC
1. Rushton, A., Oxley, J. and Croucher, P. (2000), The handbook of Logistics and Distribution Management 2nd edition, the institute of Logistics and transport, Kogan Page Ltd.
References