TRANSPORTATION MANAGEMENT

INTERMODAL TRANSPORTMANAGEMENT

THE BASIC MODES OF TRANSPORTATION AND TRANSPORTATION SERVICE PROVIDERS

1) Road Transportation / Motor Carriers

2) Ocean Transportation /Water Carriers

3) Railway Transportation / Railroads

4) Air Transportation /Air Carriers

5) Pipeline Transportation

TRANSPORTATION

The demand for transport is derived from the demand for other things. Certain forms of transport, such as pleasure cruises and holiday travel, may be regarded as ‘consumer services’; but the basic function of transport, involving economic, social or military needs, is the creation of utilities of place; i.e. the carriage of goods from places where their utility is low to places where it is higher.

The value of a little more oil at Kuwait is relatively low, while the value at a United Kingdom oil refinery is correspondingly higher.

Motor Carriers

High accessibilityTransit times faster than rail

or water.Reliability can be affected

greatly by weather.Small vehicle size coincides

with lower inventory strategies and quick replenishment (QR).

Relatively high cost compared to rail and water; trade-off is faster service.

Motor Carriers_CommoditiesMotor carrier vehicles, both for-hire and private, primarily

transport manufactured, high value products.These vehicles carry more than a majority of the various

manufactured commodity categories. Food products Manufactured products Consumer goods Industrial goods Sheep,lambs,cattle

Motor carriers transport less of commodities such as grain, primary nonferrous metal products, motor vehicles and equipments; because they move long distances generally and in large volumes.

Water Carriers (Domestic)

Available along the Atlantic, Gulf and Pacific coasts, along the Mississippi, Missouri, Tennessee and Ohio River systems and the Great Lakes.

Regulated common and contract carriers haul about 5% of the freight, while private and exempt carriers haul the other 95% of the ton-miles.

Compete with railroads for the movement of bulk commodities (eg:grains) and with pipelines for the movement of bulk petroleum

Water Carriers (Domestic)

Relatively low cost mode; do not own the rights-of-way; easy entry and exit.

Typically a long distance mover of low value, bulk-type mineral, agricultural and forest products

Low rates but long transit times

Low accessibility but high capability

International Water Carriers

General cargo shipsLarge high capacity cargo

holdsEngaged on a contract basisMany have self-contained

cranes for loading/unloading

Bulk carriersSpecially designed to haul

mineralsCan handle multiple cargoes

International Water Carriers

TankersSpecially designed for liquid

cargoesLargest vessels afloat, some

Very Large Crude Carriers

Container shipsHigh speeds for ships;

increasingly more common and important

Larger vessels can handle up to 15,000 containers.

International Water Carriers

RO-RO (Roll on-Roll off)Basically a large ferry that

facilitates the loading and unloading process by using drive on/off ramps

May also have the capacity to haul containers

OtherMultipurpose carriersBarges (not transoceanic)

Railroads

Reliability and safety are improving and are generally good.

Premium intermodal servicesStraight piggyback and containerized freightDouble stacksRoadRailer service

Unit train serviceIntermodal Marketing Company (IMC)Intermodal shipments become more

attractive as fuel prices escalate and highway congestion increases.

Railroads_Commodities

Coal: Railroads are primary haulers of coal.Farm products: When considered together,farm and food

products constitue the second largest commodity group hauled by railroads.

Chemicals and oil allied products, a great number of which are classified as “hazardous” by US Department of Transportation (DOT) are transported in specially designed tank cars.

Transportation equipment carloadings, which are linked to the relative health of the domestic automobile industry.

Air Carriers

Cost structure is highly variable; do not own rights-of-way.

Transit times are the fastest of all modes, but rates are the highest.

Average revenue per ton mile 18 times higher than rail; twice that of motor carriers.

Seek goods with a high value to weight ratio.

Accessibility is low as is capability.Reliability subject to weather more

than other modes.

Pipelines

The only mode with no backhaul; move one direction through the line.

Accessibility is very low.Cost structure is highly fixed

with low variable costs.Own rights-of-way much like

the railroads.Major advantage is low rates.

Pipelines_Commodities

Oil and Oil ProductsNatural GasCoal (slurry lines)Chemicals

* Ranking for the cost, speed, flexibility and load limits of different modes of transport

THE BASIC MODES OF TRANSPORTATION

1) Road Transportation 2) Ocean Transportation 3) Railway Transportation Unimodal

4) Air Transportation 5) Pipeline Transportation 6) Mixed Mode Transportation /Co-

Modality

Mixed Mode TransportationMixed Mode Transportation: Tranportation of the same good/service with using two or more modes. Classified in;

1) Multi-modal Transportation: Using two or more modes Re-stuffing of the goods in vehicle or box during the

mode switch2) Intermodal Transportation:

Using two or more modes No need for re-stuffing of the goods in vehicle or box

during the mode switch3) Combined Transportation :

Using road transportatiton both at the start and the end of the process.

Long distance transport via sea or rail.

The aim of mixed mode transportation;

• Combine the advantages of each modes and eliminates the disadvantages of the modes used.

• To reach optimum, composition of parameters like;

Cost Speed Reliability Service Quality

Enables shippers to benefit from advantages of multiple modes of transportation

minimizes disadvantages of individual modes

Rail

Air Water

Truck

Advantages

Air-truck intermodal transportation combines the advantages of motor carrier’s accessibility and lower cost with the speed of the air carrier. The combined service includes the air carrier’s high cost and motor carrier’s slow speed.

Intermodal Transportation

Refers to use of two or more modes of transportation cooperating on the movement of shipment by publishing a through rate.

Logistics managers are looking for the best way to move shipments and these often attempt to take advantage of multiple modes of transportation, each of which has certain useful characteristics.

Intermodal Transportation

Biggest disadvantage is that carriers are reluctant to participate.

Cultural bias towards using only one mode and this makes change more difficult.

Certain types have been fairly well developed, such as rail/water, motor/water, rail/motor, and motor/air.

Intermodal Transportation: Containerization

Goods are placed in a large box, where they are untouched until they arrive at the consigee’s unloading dock.

Reduces theft, damage, multiple handling costs and intermodal transfer time.

Changes materials handling from labor intensive to capital intensive and may reduce costs from 10 to 20%.

Intermodal Transportation: Containerization

“Land bridge” concept may apply for international shipments where oceans are separated by a large land mass.

For example, containers moving from Japan to Europe may dock at Long Beach, CA, transfer the containers to a railroad, and reload the containers onboard another ship in Norfolk, VA., continuing on to a European port.

Some of the benefits of containerisation include:

● Simplified transport and flow of goods

● Easier and faster handling

● door-to-door service

● Faster deliveries

● Reduced loss due to damage, misplacement and pilferage

Types of Intermodal Services

Intermodal Transportation: Piggyback

Trailer-on-Flat-Car (TOFC)Over the road trailers ride in

special rail cars.Takes advantage of motor

flexibility and rail’s long haul economic advantage.

Multiple service plans for shippers.Some railroads provide varying levels of

service, differentially priced.

Intermodal Transportation:

Birdybacking: Using both road and air modes during the same

shipment.Fishybacking:

Using both road and sea modes during the same shipment.

Form of combined transport as RO-RO (Roll On-Roll Off)

Intermodal Transportation: RoadRailers

Newest concept referred to as a “RoadRailer”Essentially a trailer that has been reinforced to ride

on a rail bogey and be coupled together directly without first being placed on a rail flat car

Saves weight and locomotive power and thus fuel for the railroad

Special lower ratesMotor competitive transit times