p02 basic modes of transportation

8/6/2019 P02 Basic Modes of Transportation

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Basic modes of transportation

Rail

MotorPipeline

Air

Water


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Mode of Transport - Railway

Once the dominant mode of transportation duringWWII Currently faces intense competition from other modes of

transportation

Focus on hauling heavy weight, low value, or bulkcommodities.

Most commonly used to transport:

Farm productsChemicals

Transportation equipments

Coal


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Railway TransportationAdvantages

Large carrying capacity to handle large-volume movement of low-value

commodities over long distance.

Capable of carrying a wide variety of

products E.g. Raw materials such as coal, lumber

or low-valued manufactured products

such as paper and wood products

Tankers freight train carry liquid product

such as oil

Liability for Loss and Damage usually

assumed by the railroads.

Reliability and safety are improving and aregenerally good.

Disadvantages

High set up cost.

Fixed rights-of-way Provides differing degrees of

service completeness (needother mode to complete door

to door service). Each railroad serves specific

region resulting in multiplehandling from one railroad toanother.

Accessibility can be a problem.

Transit times are spotty andgenerally long


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Mode of Transport - Motor

Motor carrier started to pick up industry that

railroads unable to support economically

(small shipments over short distance).

Consists of for-hire and private carriers.

Two major service:

1.Truckload (TL)

2.Less than truck load (LTL)


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Motor TransportationAdvantage

Low cost of entry.

Do not need to own their rights-

of-way.

High accessibility -can offer door-

to-door.

Transit times faster than rail or

water.

Various volume/size can be

offered to customers The availability of global

positioning technology (GPS)

enhance the visibility of

movement and increased ofsafety.

Disadvantage

Low capital investment means

more players come to the market

resulting in intense competition

for the operators.

Reliability can be affected greatlyby weather.

Relatively high cost compared to

rail and water carriers.

More labor intensive

Tradeoff with faster service


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Mode of TransportWater Carriers Typically a long distance mover of low value, bulk-type

mineral, agricultural and forest products. Note: In shipping, distance is typically measured in nautical

miles (NM), with speed in knots (in miles/hr)

Speed (knots) = Distance (NM) / Time (hours)

Competes with railroads for the movement of bulkcommodities (such as grains, coal, ores).

Compete with pipelines for the movement of bulk

petroleum products and chemicals.

Vessels can operate according to a fixed schedule, calledliner vessels, or only when it is chartered (or hired) fromthe ship operator, thus called tramp vessels


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Type of Water CarriersContainer ships

Tankers

RO-RO (Roll on-Roll off)LASH(Lighter Aboard Ship)

Bulk Carriers

LNG/LPG Carriers


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Types of Water Carriers


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Water Transportation

Advantage

Relatively low cost

provides easy entry

and exit. Do not have to own

rights of way

Provide low rates totransport bulky

products

Disadvantage

Low accessibility

Slow movement

Due to todays

environmental concerns,

ports are having trouble

keeping pace with theaccelerated

developments in global

trades.


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Mode of transport - Pipeline

Relatively unknown to the general public

Very limited in the type of commodities they

can haul. Rampant (a lot of) oligopoly practice due to

the limited number of pipeline companies.

Faced serious competition from water carrier(low price).


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Pipeline TransportationAdvantage

Low rates.Very good loss and

damage record.

Provide warehousing function

due to the slow movement (3-5 miles per hour).

High dependability, few transit

time variability.

Relatively unaffected byweather and mechanical

failures.

Products are able to move

24/7/365.

Disadvantage

Limited range of productsthus is not suitable forgeneral transportation.Mostly used for gases and

liquid such as oil, waterand natural gas.

Accessibility is very low.

Very high set up cost.

Mostly privately ownedand if not, the industry isoligopolistic in nature


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Method of Transportation - Air Constitutes the newest and the fastest method for

transporting cargo

Note: Similarly as in shipping, distance travelled for

aircraft is typically measured in nautical miles (NM)

Any of the air carriers can carry air freight although

some haul nothing but freight.

Can be segmented into for-hire carriers and private

carriers (usually to transport company personnel).

Well-suited to carrying valuable, fragile and

perishable cargoes.


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Types ofAir Carriers

All Cargo Airlinepoint-to-point service for air freight forwarders

Integrated CarriersOperate door to door freight transportation networks

Combination CarriersCarries passengers and cargo

Air Parcel PostProvided by the postal service of a country


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Types of Air Carriers

All-cargo airline (Freighters) Provide point-to-point service for air freight forwarders,

either as common carriers or under guaranteed-space

agreements

E.g. Polar Air Cargo, SIA Cargo, Lufthansa Cargo

Some others, like Atlas Air and Air Transport

International, primarily operate aircraft on a contract

basis for other airlines


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Types of Air Carriers Integrated carriers (Express carriers)

Operate door to door freight transportation networksthat include own cargo aircraft, delivery vehicles,sorting hubs, and advance info systems to provideinternational delivery service

E.g. FedEx, UPS, DHL

Combination Carrier

Carries passengers and cargo Primarily offers point-to-point services on wholesale

basis

Relying on Freight Forwarders for pickups, delivery,

sales to shippers and customer service


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Types of Air Carriers Air Parcel Post

Provided by the postal service of a country and is

designed to handle small packages.

The postal service contracts with an air carrier to pickup and deliver the item from one country to another.


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Air TransportationAdvantage The major advantage is

speed.

Air-service dependability

can be rated as good

under normal operating

conditions.

Has a distinct advantagein terms of loss and

damage

Enjoy limited competition

from other modes

Disadvantage Rates are highest.

Much affected by weather

condition

Due to the large numbers

of air carriers, the

competition amongst air

carriers is very intense. Low accessibility thus

usually combined with

other modes.


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p02 basic modes of transportation

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