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					Modes of Transportation



             By
        John Hancey
         Supply 361
                                     Introduction
        “...freight transportation is vital to the Nation's
         economy. At any given moment, billions of
         dollars' worth of goods are being moved by
         truck, train, ship, or barge, or held in a yard for
         transport or distribution.”




Scott Johnson, Reliability in logistics is Key to global market, Public Road Magazine
   How Important is Transportation?
                 Tranportation's Importance to GDP

                                Other                    Housing
                                24%                       24%

                 Recreation
                    7%                                       Health Care
                      Education                                 15%
                                            Food
                          7% Transportation
                                  11%       12%


       Housing    Health Care    Food   Transportation   Education   Recreation   Other



Source: Bureau of Transportation Statistics, February 2002
          How is this done?
 6.3 million rail cars
 25.2 million trucks
 Over 300 ships with the capacity of 2,000-
  5,000 containers
                       Purpose
 Evaluate the 4 main modes of
  Transportation
      Truck—semi-tractors
      Rail
      Ocean Carrier
      Air Carrier
 Industry Trend
 Exercise
 Summary
Semi-Tractor
                  Semi-Tractors
 U.S Department of Transportation defines a semi-
  truck as:
    A commercial vehicle operating on the interstate
     highway system or divided highways to move
     material or people for compensation
    Generally, have 3 axles—common configruation
     10 wheels
    Gross combination weight rating, of 4,536 kg
     (10,001 pounds) or more
      Semi-Tractor Segments
 Semi-tractors segments:
   Single-axle, up to 20,000
   Tandem-Axle, up to 34,000
   Gross vehicle weight over 80,000
 Semi-Tractor lengths
   Minimum 24 and maximum 75 feet long
Truck Transportation Evaluation
 Advantages
   Greater control of over delivery locations-
    flexible
   Less pilferage of goods
   Last mile service
 Disadvantages
   Increase traffic congestion
   Higher rate of traffic accident
                    Railroad




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                    Railroad
 Railroad is divided
  into 3 segments
   Light rail
   Rapid transit
   Freight train
             Railroad Evaluation
 Advantages
     Most efficient mechanized land transport
     Very safe
     Cheaper than trucking
     Greater load capacity


             Rail                       Truck
  100 tons                    25 tons
  3,500 bushel                87.5 bushel
  30,240 Gallons              7,560 Gallons
           Railroad Evaluation
 Disadvantages
     Rigid routing destinations—inflexible
     Multiple handlings of goods—leads to delays
     Expensive infrastructure
     Not suited for smaller loads or short distances
Ocean Freighters
                Ocean Freighters
 Ocean Freighter segments
   Bulk Carriers—carry bulky
    and dry items, i.e. coal or
    grains
   Tanker Carriers—designed
    to haul liquids, i.e. oil
   Container Carriers—carry
    cargo in truck size
    containers (TEU)
            Ocean Freighters
 Categorized by capacity or the canals a ship
  can travel through
   Handymax—smallest carrier, less than 50,000 dwt
   Aframax—tankers between 75,000-100,000 dwt
   Suezmax—largest carrier to pass through the canal,
    125,000 to 200,000 dwt
   ULCC—largest tankers with displacement between
    320,000 to 500,000 dwt
      Ocean Freighters Evaluation
 Advantages
     Cheap
     Very few accidents
     Best for dry and bulky items—steel or oil
     Largest hauling capacity
     Most efficient hauler for fuel consumption
            1 ton/per gallon of fuel
        Barge      Rail       Truck
        514 miles 202 miles 59 miles
           Ocean Freighters
 Disadvantages
   Slow
   Bad for perishable or time sensitive goods
   Limited to water routes
Air Freighters
              Air Freighters
 Large modified
  passenger planes that
  are used to carry
  freight. Most common
  models are the
  following:
   Boeing 747, 737,
   Airbus A320, 340
   Airbus Beluga
       Air Freighter Evaluation
 Advantages
     Speed of delivery-best for time sensitive items
     Best for time defined deadlines
     Reduces traffic congestion
     Best for smaller and less bulky items
     Seamless integration of plane to truck delivery solution
 Disadvantages
   Very expensive
   Not for large bulky items
   Less carrying capacity than ocean transporters
             Industry Trend
 Intermodal
   Uses several types of transportations en route
   Uses a truck for pick-up and delivery, but the
    long haul uses either rail/ocean
   Utilizes each modes of transportations’
    efficiencies
                      Activity
    You have received a report that your company’s new
       Gazogle toy is outselling the company’s highest
           expectation in the mid-west region. Store
      managers in the mid-west are demanding another
      shipment of Gazogle before the holiday season to
         replenish their low inventory levels. As the
     company’s logistic manager, you need to figure out
   the cheapest method to transport the Gazogle from the
factories in China to Chicago. You must also ensure the toys
        reach the mid-west stores prior to the holiday
               season, which is 18 days away.
             Activity Cont.
• Compute the cheapest method and route to
  ship the toys from China to Chicago using
  any single or combination of modes of
  transportation and make sure the toys arrive
  before the holiday season.
                                       Activity Data
                                              Transportation Data
   Mode          Departure                  Destination                Costs/unit            # of Units Req. Days
Air Freight    Beijing, China              Chicago                     $ 25,000              2 planes           3
Air Freight    Beijing, China              Los Angeles                 $ 35,000              2 planes           2
Ocean          Beijing, China              Los Angeles                 $ 10,000              1 container       14
Ocean          Beijing, China              Seattle                     $ 12,000              1 container       14
Truck          Los Angeles                 Chicago                     $ 10,000              4 trucks           5
Truck          Seattle                     Chicago                     $ 6,000               4 trucks           4
Rail           Los Angeles                 Chicago                     $ 8,000               3 cars             4
Rail           Seattle                     Chicago                     $ 5,000               3 cars             4

    •   Hint: # of Units Required means that several planes, trucks or railroad cars will be needed to transport the entire
        shipment.
    •   Assume—Railroad can deliver the goods to the final destination.
                          Activity Solution
                                            Solution
                                       Transportation Data
   Mode         Departure       Destination Costs/unit # of Units Req. Days Total Cost
Air Freight   Beijing, China   Chicago       $ 35,000               2     3 $ 70,000
Air Freight   Beijing, China   Los Angeles   $ 25,000               2     2 $ 50,000
Ocean         Beijing, China   Los Angeles   $ 10,000               1    14 $ 10,000
Ocean         Beijing, China   Seattle       $ 12,000               1    14 $ 12,000
Truck         Los Angeles      Chicago       $ 10,000               4     5 $ 40,000
Truck         Seattle          Chicago       $ 8,000                4     4 $ 32,000
Rail          Los Angeles      Chicago       $ 8,000                3     4 $ 24,000
Rail          Seattle          Chicago       $ 6,000                3     4 $ 18,000

                               Mode               Cost   Days
                               Ocean-Seattle    $ 12,000    14
                               Rail-Chicago     $ 18,000     4
                               Total            $ 30,000   18
               Summary
• Trucking—very flexible to your needs, but
  prone to accidents
• Rail—most economic land transportation,
  but limited in final destinations
• Ocean—inexpensive, but slow
• Air—moves at the speed of business, but
  with a cost
             Final Thought
• “…quintessential requirement for
  succeeding in a global, just-in-time
  economy is the ability to plan trips,
  deliveries, and transactions down to hours
  and minutes.”
                             Readings
• Joseph O’Reilly, Panama Gold, Inbound logistics magazine, available at
  http://www.inboundlogistics.com/articles/features/0105_feature04.shtml
• Road Information Program, America’s Rolling Warehouse, available at
  www.tripnet.org/TruckingReport020904.PDF
• Scott Johnson, Reliability in logistics is Key to global market, Public Road
  Magazine, www.findarticles.com
• Vineet Agarwal, Trucking has the advantage of last mile service, The
  Financial Express, available at www.financialexpress.com
• U.S. Department of Transportation, Bureau of Statistics
• Library of International Marine Organization, available at
  http://www.imo.org/imo/Library
• The Great Lakes St. Lawrence Seaway System - A Vital Waterway,
  available at www.greatlakes-seaway.com
• Tom Piatak, “Carrier’s Corner”, Inbound Logistics magazine, October
  2002

				
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posted:9/25/2012
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