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

Housing24%

Health Care15%Food

12%

Other24%

Education7% Transportation

11%

Recreation7%

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

www.freephoto.com

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

Barge Rail Truck514 miles 202 miles 59 miles

1 ton/per gallon of fuel

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

ActivityYou have received a report that your company’s new

Gazogle toy is outselling the company’s highestexpectation in the mid-west region. Store

managers in the mid-west are demanding anothershipment of Gazogle before the holiday season to

replenish their low inventory levels. As thecompany’s logistic manager, you need to figure out

the cheapest method to transport the Gazogle from thefactories in China to Chicago. You must also ensure the toys

reach the mid-west stores prior to the holidayseason, 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

• 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.

Mode Departure Destination Costs/unit # of Units Req. DaysAir Freight Beijing, China Chicago 25,000$ 2 planes 3Air Freight Beijing, China Los Angeles 35,000$ 2 planes 2Ocean Beijing, China Los Angeles 10,000$ 1 container 14Ocean Beijing, China Seattle 12,000$ 1 container 14Truck Los Angeles Chicago 10,000$ 4 trucks 5Truck Seattle Chicago 6,000$ 4 trucks 4Rail Los Angeles Chicago 8,000$ 3 cars 4Rail Seattle Chicago 5,000$ 3 cars 4

Transportation Data

Activity Solution

Mode Departure Destination Costs/unit # of Units Req. Days Total CostAir 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$

SolutionTransportation Data

Mode Cost DaysOcean-Seattle 12,000$ 14Rail-Chicago 18,000$ 4Total 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