Modes of Transportation

1. Modes of Transportation By John Hancey Supply 361

2. 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

3. How Important is Transportation? Source: Bureau of Transportation Statistics, February 2002

4. 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

5. Purpose • Evaluate the 4 main modes of Transportation • Truck—semi-tractors • Rail • Ocean Carrier • Air Carrier • Industry Trend • Exercise • Summary

6. Semi-Tractor

7. 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

8. 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

9. 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

10. Railroad www.freephoto.com

11. Railroad • Railroad is divided into 3 segments • Light rail • Rapid transit • Freight train

12. Railroad Evaluation • Advantages • Most efficient mechanized land transport • Very safe • Cheaper than trucking • Greater load capacity

13. Railroad Evaluation • Disadvantages • Rigid routing destinations—inflexible • Multiple handlings of goods—leads to delays • Expensive infrastructure • Not suited for smaller loads or short distances

14. Ocean Freighters

15. 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)

16. 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

17. 1 ton/per gallon of fuel Barge Rail Truck 514 miles 202 miles 59 miles 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

18. Ocean Freighters • Disadvantages • Slow • Bad for perishable or time sensitive goods • Limited to water routes

19. Air Freighters

20. 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

21. 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

22. 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

23. 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.

24. 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.

25. Activity Data • 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.

26. Activity Solution

27. 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

28. 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.”

29. 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