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CHAPTER 8 Transportation

CHAPTER 8 Transportation. Factors Influencing Transportation Costs. Product-related factors density stowability ease or difficulty of handling liability. Market-related factors Degree of competition Location of markets Government regulation Balance or imbalance of freight traffic

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CHAPTER 8 Transportation

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  1. CHAPTER 8 Transportation

  2. Factors Influencing Transportation Costs Product-related factors density stowability ease or difficulty of handling liability Market-related factors Degree of competition Location of markets Government regulation Balance or imbalance of freight traffic Seasonality Domestic versus international movement

  3. Terms of Sale and Corresponding Buyer and Seller Responsibilities 2.Terms of Sale FOB Shipping Point, FREIGHT ALLOWED 1.Terms of Sale FOB Shipping Point, FREIGHT COLLECT Title passes to buyer Title passes to buyer • Seller pays freight charges. • Seller bears freight charges. • Buyer owns goods in transit. • Buyer files claims (if any). • Buyer pays freight charges. • Buyer bears freight charges. • Buyer owns goods in transit. • Buyer files claims (if any). 3.Terms of Sale FOB Shipping Point, FREIGHT PREPAID AND CHARGED BACK Freight charges paid by buyer Freight charges paid by seller Title passes to buyer • Seller pays freight charges. • Buyer bears freight charges. • Buyer owns goods in transit. • Buyer files claims (if any). Seller Seller Seller Buyer Buyer Buyer Freight charges paid by seller, then collected from buyer by adding amount to invoice. a Source: Harold Fearon, Donald Dobler, and Ken Killen, The Purchasing Handbook, National Association of Purchasing Management, 1993, McGraw-Hill.

  4. Terms of Sale and Corresponding Buyer and Seller Responsibilities (cont.) 4.Terms of Sale FOB Destination, FREIGHT COLLECT 6.Terms of Sale FOB Destination, FREIGHT COLLECT AND ALLOWED Title passes to buyer Title passes to buyer • Buyer pays freight charges. • Seller bears freight charges. • Seller owns goods in transit. • Seller files claims (if any). • Buyer pays freight charges. • Buyer bears freight charges. • Seller owns goods in transit. • Seller files claims (if any). Seller Seller Buyer Buyer Freight charges paid by buyer Freight charges paid by buyer, then charged to seller by deducting amount from invoice. 5.Terms of Sale FOB Destination, FREIGHT PREPAID Freight charges paid by seller • Seller pays freight charges. • Seller bears freight charges. • Seller owns goods in transit. • Seller files claims (if any). Title passes to buyer Seller Buyer 8-3 b Source: Harold Fearon, Donald Dobler, and Ken Killen, The Purchasing Handbook, National Association of Purchasing Management, 1993, McGraw-Hill.

  5. Five Basic Transportation Modes 8-4 • Motor • Rail • Air • Water • Pipeline

  6. Comparison of US Domestic Transportation Modes Economic Characteristics 8-5 a

  7. Comparison of US Domestic Transportation Modes (cont.) Service Characteristics 8-5 b

  8. Nonoperating Third Parties 8-6 • Freight forwarders • Shippers’ associations or cooperatives • Transportation brokers • Intermodal marketing companies or shippers’ agents • Third-party logistics service providers

  9. Major U.S. Agencies Regulating Transportation 8-7 • Surface Transportation Board • Department of Transportation • Federal Maritime Commission • Federal Energy Regulatory Commission

  10. International Distribution Shipping Options Landbridge Rail Landbridge Minilandbridge Microbridge Rail Truck/rail All-water All-water 8-8 Source: Adapted from David L. Anderson, “International Logistics Strategies for the Eighties,” Proceedings of the Twenty-Second Annual Conference of the National Council of Phyisical Distribution Management, 1984, p. 363. Used by permission of the Council of Logistics Management.

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