This document outlines the learning objectives and key content of a chapter on transportation systems and carrier selection from a logistics management textbook. The chapter discusses the various modes of transportation including their economic and service characteristics. It covers the carrier selection process and factors to consider such as rates, transit time, reliability and security. The chapter also defines the different legal classifications of carriers and discusses intermodal transportation and containerization.
This document summarizes key topics from Chapter 9 of a logistics textbook, including the economic role of transportation, carrier selection considerations, the characteristics of different transportation modes, and legal classifications of carriers. It discusses how transportation connects suppliers and customers, and outlines costs associated with different modes like rail, motor, water, air, and pipeline carriers. Intermodal transportation and containerization are described as ways to reduce costs. The chapter objectives are to explain transportation's economic role and discuss carrier selection and characteristics of various modes.
Air Arabia has managed to offer low-cost air travel through a strategic pricing approach. They estimate demand through surveys and price experiments to determine the optimal price that maximizes market share. They also carefully manage costs, such as through fuel hedging and high aircraft utilization, to keep variable costs low. Air Arabia analyzes competitors' costs and service quality to develop a strategy providing high quality at low prices. They use value pricing by re-engineering operations to attract price-conscious customers. Through this pricing strategy and maintaining low prices even during increases in fuel costs or inflation, Air Arabia has seen remarkable growth over the past decade.
This document discusses route profitability systems and challenges in airline cost accounting. It outlines a cost hierarchy including direct, indirect, fixed and variable costs. It also discusses system dependencies and different models for route profitability analysis from traditional to advanced. The advanced model allows for multi-level profit analysis for strategic, operational and managerial decisions. It emphasizes the need for a system that reconciles to financial reports in real-time and supports activity-based costing and planning/budgeting.
This document summarizes information about the European airline industry. It discusses the differences between full service carriers (FSCs) and low cost carriers (LCCs), provides financial statistics for major European airlines and LCCs, and analyzes factors like industry competition and strategic groups. Porter's five forces model is applied to the industry, showing high levels of competition. The document also includes frameworks for analyzing airline strategy and competitive advantage. Case studies are presented on British Airways' performance and recovery program.
The document discusses airline budgeting. It explains that a budget is a written plan of estimated future income and expenses over a period. For airlines, budgets differ slightly from other industries as numbers are statistics, percentages, and available resources. The document focuses on two major budgeting types - zero-based budgeting and activity-based cost analysis. Zero-based budgeting requires justification of all expenditures rather than just increases from the previous year. Activity-based cost analysis identifies the costs of individual activities and cost objects. The document provides advice on effective airline budgeting practices.
Critically discuss the external and internal forces or challenges that Air Asia has to deal with.
Evaluate the existing strategy of Air Asia
Discuss Air Asia’s strategy to develop their business in future.
Southwest Airlines was established in 1967 in Texas and has grown to become the world's largest low-cost carrier. It operates differently than other airlines by flying point-to-point rather than through hubs, having a simpler reservation system, turning planes around 30 minutes faster, and flying planes an average of 12 hours per day. Southwest also has a rapid rewards frequent flyer program and achieves high customer satisfaction and on-time performance rates compared to other airlines. Financial data shows Southwest has consistently achieved higher profitability than competitor airlines.
A tqm-case-study-in-service-sector british airwaysiipmff2
British Airways implemented a Total Quality Management (TQM) approach in the 1990s to transform its customer service and turn the company around from financial struggles. It laid off thousands of employees to cut costs but then rehired and retrained staff with a focus on customer service. British Airways invested heavily in employee training programs, changed its culture to be more service-oriented, and saw profits increase by over 10% annually as it became one of the largest airlines in the world.
This document summarizes key topics from Chapter 9 of a logistics textbook, including the economic role of transportation, carrier selection considerations, the characteristics of different transportation modes, and legal classifications of carriers. It discusses how transportation connects suppliers and customers, and outlines costs associated with different modes like rail, motor, water, air, and pipeline carriers. Intermodal transportation and containerization are described as ways to reduce costs. The chapter objectives are to explain transportation's economic role and discuss carrier selection and characteristics of various modes.
Air Arabia has managed to offer low-cost air travel through a strategic pricing approach. They estimate demand through surveys and price experiments to determine the optimal price that maximizes market share. They also carefully manage costs, such as through fuel hedging and high aircraft utilization, to keep variable costs low. Air Arabia analyzes competitors' costs and service quality to develop a strategy providing high quality at low prices. They use value pricing by re-engineering operations to attract price-conscious customers. Through this pricing strategy and maintaining low prices even during increases in fuel costs or inflation, Air Arabia has seen remarkable growth over the past decade.
This document discusses route profitability systems and challenges in airline cost accounting. It outlines a cost hierarchy including direct, indirect, fixed and variable costs. It also discusses system dependencies and different models for route profitability analysis from traditional to advanced. The advanced model allows for multi-level profit analysis for strategic, operational and managerial decisions. It emphasizes the need for a system that reconciles to financial reports in real-time and supports activity-based costing and planning/budgeting.
This document summarizes information about the European airline industry. It discusses the differences between full service carriers (FSCs) and low cost carriers (LCCs), provides financial statistics for major European airlines and LCCs, and analyzes factors like industry competition and strategic groups. Porter's five forces model is applied to the industry, showing high levels of competition. The document also includes frameworks for analyzing airline strategy and competitive advantage. Case studies are presented on British Airways' performance and recovery program.
The document discusses airline budgeting. It explains that a budget is a written plan of estimated future income and expenses over a period. For airlines, budgets differ slightly from other industries as numbers are statistics, percentages, and available resources. The document focuses on two major budgeting types - zero-based budgeting and activity-based cost analysis. Zero-based budgeting requires justification of all expenditures rather than just increases from the previous year. Activity-based cost analysis identifies the costs of individual activities and cost objects. The document provides advice on effective airline budgeting practices.
Critically discuss the external and internal forces or challenges that Air Asia has to deal with.
Evaluate the existing strategy of Air Asia
Discuss Air Asia’s strategy to develop their business in future.
Southwest Airlines was established in 1967 in Texas and has grown to become the world's largest low-cost carrier. It operates differently than other airlines by flying point-to-point rather than through hubs, having a simpler reservation system, turning planes around 30 minutes faster, and flying planes an average of 12 hours per day. Southwest also has a rapid rewards frequent flyer program and achieves high customer satisfaction and on-time performance rates compared to other airlines. Financial data shows Southwest has consistently achieved higher profitability than competitor airlines.
A tqm-case-study-in-service-sector british airwaysiipmff2
British Airways implemented a Total Quality Management (TQM) approach in the 1990s to transform its customer service and turn the company around from financial struggles. It laid off thousands of employees to cut costs but then rehired and retrained staff with a focus on customer service. British Airways invested heavily in employee training programs, changed its culture to be more service-oriented, and saw profits increase by over 10% annually as it became one of the largest airlines in the world.
Southwest Airlines has been profitable for 37 years through a unique low-cost business model. They streamline operations to save money and pass savings to customers through low fares. Southwest flies short point-to-point routes daily using Boeing 737 aircraft, turns planes around extremely fast, hedges fuel prices to save billions, and pioneered services like same-day freight. Their consistency in earning profits even during industry problems allows flexibility that burdened carriers lack. However, always running half-full flights and price wars present risks to maintaining low fares long-term.
The document provides an overview of key concepts in logistics management. It defines logistics and supply chain management, outlines common logistics functions like transportation and warehousing, and lists approaches used in logistics like just-in-time and outsourcing. Specific logistics applications and challenges are described for industries like fuel transportation, vehicle logistics, and milk run distribution. Key logistics roles like freight forwarders and the use of e-marketplaces are also summarized.
Southwest Airlines was founded in 1971 with a unique low-cost business model focused on quick turnarounds and customer satisfaction. It spread throughout the "Golden Triangle" region of Texas and emphasized a fun-loving culture. Southwest achieved great financial success in the 1990s and developed a reputation for excellent customer service. It continues to focus on low costs, high employee satisfaction, and putting customers first.
- JetBlue experienced major communication failures and customer service issues during a winter storm in February 2007. Thousands of passengers were stranded on planes for hours with little information from the airline.
- This crisis damaged JetBlue's reputation for excellent customer satisfaction. However, the CEO implemented a new "Customer Bill of Rights" that established clear compensation policies for flight delays or cancellations.
- The Customer Bill of Rights helped rebuild customer trust and confidence in JetBlue. It raised industry standards of passenger treatment and demonstrated JetBlue's commitment to putting customers first even in difficult situations.
Southwest Airlines has maintained profitability for 36 consecutive years despite challenges from increasing fuel costs, economic downturns, and competitive threats. Key questions examined were whether Southwest could continue relying on fuel hedging for cost control, if its point-to-point model would remain effective as it expands, and if major airlines adopting low-cost strategies would threaten Southwest. Southwest was also discussed expanding internationally using its 737 fleet and maintaining positive employee and customer relations crucial to its low-cost advantage.
This document discusses the political, economic, and competitive factors that have impacted the European airline industry. It analyzes how deregulation, wars, and terrorism have changed the industry politically. Economically, it explores how recessions and rising oil prices have affected profits. Competitively, it examines the low-cost business model of carriers like Ryanair and EasyJet and how they have gained significant market share through low fares. The future prospects discussed maintaining cost advantages for low-cost carriers while major airlines will face challenges competing on price.
Ryanair is a low-cost airline founded in 1985 that operates short-haul, point-to-point flights within Europe. Its business strategy focuses on minimizing costs through the use of standardized Boeing 737 aircraft, secondary regional airports, and charging fees for services like checked bags. Ryanair aims to establish itself as Europe's most profitable low-cost airline by offering low fares and expanding ancillary services online. While Ryanair has experienced growth in recent years, it faces threats from rising fuel costs, stricter emissions regulations, and increased competition from other forms of travel.
Southwest Airlines grew rapidly in its first six years to become the 11th largest airline in the United States. It utilized a low-cost strategy by avoiding meals, using newer planes to reduce costs, and operating from secondary airports. The airline targeted underserved customers and those seeking affordable flights. Through effective technology use and automated processes, Southwest remained profitable after the 9/11 attacks when other airlines struggled. The document discusses Southwest's vision, strategies, SWOT analysis, and responses to insight questions about its approach.
Air Asia: Case study on Growth, Diversification and Low cost StrtegyPartha Pratim Mahanta
This document provides an overview of Air Asia, a low-cost airline based in Malaysia. It discusses Air Asia's vision, mission, profile including fleet size and number of employees/customers. It also summarizes Air Asia's business strategies like frequent flights, safety-first approach, and low fares with no frills. The document performs a SWOT analysis of Air Asia and uses various frameworks like Porter's 5 Forces and BCG matrix to analyze Air Asia. It concludes with discussing Air Asia's future strategies over the next 15 years and future planning to maintain profitability.
Air asia’ core competencies distinctive its success ( Nasser AL-Dhahli)Nasser AL-Dhahli
Air Asia has experienced significant growth through its low-cost business model pioneered by CEO Tony Fernandes. It operates over 400 routes across 25 countries in Southeast Asia out of hubs in Malaysia, Thailand, and Indonesia. Air Asia keeps costs low through strategies like using a single aircraft type to reduce expenses, limiting passenger services and amenities, and streamlining operations. While its no-frills approach has proven successful, sustaining this model faces threats from regulators, rising fuel costs, and established carriers adopting similar low-cost strategies.
Turkish Airlines is Turkey's national flag carrier airline company. It operates domestic and international passenger and cargo flights. While originally state-owned, the Turkish government now owns 49.12% of shares, with the remaining 50.88% publicly traded. Turkish Airlines aims to promote Turkey's image through high quality service and social responsibility programs. It faces various risks as an airline, but maintains investment grade credit ratings due to strong financial performance in recent years.
Ryanair’s objective is to firmly establish itself as Europe’s leading low-fares scheduled passenger airline through continued improvements and expanded offerings of its low-fares service.
Ryanair aims to offer low fares that generate increased passenger traffic while maintaining a continuous focus on cost-containment and operating efficiencies.
Air Arabia is a low-cost airline founded in 2003 that operates out of Sharjah International Airport. It has been recognized as the best low-cost carrier in the Middle East and North Africa region. Air Arabia has succeeded through its strategy of targeting customers who cannot normally afford to fly by offering low fares. It keeps costs low through measures like operating a universal aircraft model for training, using fuel-efficient sharklet technology, and having dedicated but customer-oriented crew and user-friendly online services. However, Air Arabia faces challenges from increasing fuel and operating costs. It must strike the right balance between price and value to maintain its leadership position as other airlines could adopt its low-cost model.
This virtual simulation program was developed to help airline management teams understand competitive market dynamics and improve problem solving and decision-making skills.
Find out more at: http://www.iata.org/airline-business-simulation
This document provides an overview of the major modes of transportation available to logistics managers: rail, motor, water, pipeline, and air. It discusses the characteristics of each mode in terms of cost, transit time, reliability, capability, and accessibility. Rail transportation has the capability to carry a wide variety of products but limited accessibility. Motor carriers have high accessibility but higher costs than rail and water. Water transportation has relatively low costs but long transit times. Air transportation has the fastest transit times but highest costs. Pipelines are only suitable for transporting oil. The document also discusses intermodal transportation and provides a table rating each mode across various selection determinants.
This document provides an overview of transportation systems and carrier selection. It discusses the economic role of transportation, the basic modes of transportation including their characteristics and market share, and the carrier selection process. Key factors in carrier selection are discussed such as cost, transit time, reliability, and capability. Legal classifications of carriers including common, contract, and private carriers are also overviewed.
The document discusses various aspects of transportation and distribution management. It covers key topics such as:
- The importance of transportation in logistics and how it adds value by moving goods across distances.
- The different modes of transportation including road, rail, water, air, and pipeline. It discusses factors that affect the cost, speed, and consistency of transportation performance.
- The objectives of transportation in minimizing costs and transit time while fulfilling continuous demand.
- Recent trends in transportation and how different modes are adapting to changes in the economy and technology.
This document provides an overview of supply chain management and logistics management. It discusses key concepts like distribution management, inventory management, transportation management, warehousing, and the role of third-party logistics providers. The various modes of transportation like rail, road, water, air, and pipelines are explained. Factors to consider when selecting transportation modes include cost, speed, consistency and volume. The document also outlines benefits and potential savings from using third-party logistics, as well as some shortcomings.
This document discusses various aspects of transportation and fleet management. It begins by defining transportation and its role in logistics. It then examines the different determinants companies consider when selecting carriers, such as transit time, reliability, and accessibility. The document also reviews various modes of transportation like railroads, motor carriers, water carriers, and air carriers. It covers intermodal transportation methods like containerization and piggybacking. Finally, it discusses legal classifications of carriers and indirect carriers.
Southwest Airlines has been profitable for 37 years through a unique low-cost business model. They streamline operations to save money and pass savings to customers through low fares. Southwest flies short point-to-point routes daily using Boeing 737 aircraft, turns planes around extremely fast, hedges fuel prices to save billions, and pioneered services like same-day freight. Their consistency in earning profits even during industry problems allows flexibility that burdened carriers lack. However, always running half-full flights and price wars present risks to maintaining low fares long-term.
The document provides an overview of key concepts in logistics management. It defines logistics and supply chain management, outlines common logistics functions like transportation and warehousing, and lists approaches used in logistics like just-in-time and outsourcing. Specific logistics applications and challenges are described for industries like fuel transportation, vehicle logistics, and milk run distribution. Key logistics roles like freight forwarders and the use of e-marketplaces are also summarized.
Southwest Airlines was founded in 1971 with a unique low-cost business model focused on quick turnarounds and customer satisfaction. It spread throughout the "Golden Triangle" region of Texas and emphasized a fun-loving culture. Southwest achieved great financial success in the 1990s and developed a reputation for excellent customer service. It continues to focus on low costs, high employee satisfaction, and putting customers first.
- JetBlue experienced major communication failures and customer service issues during a winter storm in February 2007. Thousands of passengers were stranded on planes for hours with little information from the airline.
- This crisis damaged JetBlue's reputation for excellent customer satisfaction. However, the CEO implemented a new "Customer Bill of Rights" that established clear compensation policies for flight delays or cancellations.
- The Customer Bill of Rights helped rebuild customer trust and confidence in JetBlue. It raised industry standards of passenger treatment and demonstrated JetBlue's commitment to putting customers first even in difficult situations.
Southwest Airlines has maintained profitability for 36 consecutive years despite challenges from increasing fuel costs, economic downturns, and competitive threats. Key questions examined were whether Southwest could continue relying on fuel hedging for cost control, if its point-to-point model would remain effective as it expands, and if major airlines adopting low-cost strategies would threaten Southwest. Southwest was also discussed expanding internationally using its 737 fleet and maintaining positive employee and customer relations crucial to its low-cost advantage.
This document discusses the political, economic, and competitive factors that have impacted the European airline industry. It analyzes how deregulation, wars, and terrorism have changed the industry politically. Economically, it explores how recessions and rising oil prices have affected profits. Competitively, it examines the low-cost business model of carriers like Ryanair and EasyJet and how they have gained significant market share through low fares. The future prospects discussed maintaining cost advantages for low-cost carriers while major airlines will face challenges competing on price.
Ryanair is a low-cost airline founded in 1985 that operates short-haul, point-to-point flights within Europe. Its business strategy focuses on minimizing costs through the use of standardized Boeing 737 aircraft, secondary regional airports, and charging fees for services like checked bags. Ryanair aims to establish itself as Europe's most profitable low-cost airline by offering low fares and expanding ancillary services online. While Ryanair has experienced growth in recent years, it faces threats from rising fuel costs, stricter emissions regulations, and increased competition from other forms of travel.
Southwest Airlines grew rapidly in its first six years to become the 11th largest airline in the United States. It utilized a low-cost strategy by avoiding meals, using newer planes to reduce costs, and operating from secondary airports. The airline targeted underserved customers and those seeking affordable flights. Through effective technology use and automated processes, Southwest remained profitable after the 9/11 attacks when other airlines struggled. The document discusses Southwest's vision, strategies, SWOT analysis, and responses to insight questions about its approach.
Air Asia: Case study on Growth, Diversification and Low cost StrtegyPartha Pratim Mahanta
This document provides an overview of Air Asia, a low-cost airline based in Malaysia. It discusses Air Asia's vision, mission, profile including fleet size and number of employees/customers. It also summarizes Air Asia's business strategies like frequent flights, safety-first approach, and low fares with no frills. The document performs a SWOT analysis of Air Asia and uses various frameworks like Porter's 5 Forces and BCG matrix to analyze Air Asia. It concludes with discussing Air Asia's future strategies over the next 15 years and future planning to maintain profitability.
Air asia’ core competencies distinctive its success ( Nasser AL-Dhahli)Nasser AL-Dhahli
Air Asia has experienced significant growth through its low-cost business model pioneered by CEO Tony Fernandes. It operates over 400 routes across 25 countries in Southeast Asia out of hubs in Malaysia, Thailand, and Indonesia. Air Asia keeps costs low through strategies like using a single aircraft type to reduce expenses, limiting passenger services and amenities, and streamlining operations. While its no-frills approach has proven successful, sustaining this model faces threats from regulators, rising fuel costs, and established carriers adopting similar low-cost strategies.
Turkish Airlines is Turkey's national flag carrier airline company. It operates domestic and international passenger and cargo flights. While originally state-owned, the Turkish government now owns 49.12% of shares, with the remaining 50.88% publicly traded. Turkish Airlines aims to promote Turkey's image through high quality service and social responsibility programs. It faces various risks as an airline, but maintains investment grade credit ratings due to strong financial performance in recent years.
Ryanair’s objective is to firmly establish itself as Europe’s leading low-fares scheduled passenger airline through continued improvements and expanded offerings of its low-fares service.
Ryanair aims to offer low fares that generate increased passenger traffic while maintaining a continuous focus on cost-containment and operating efficiencies.
Air Arabia is a low-cost airline founded in 2003 that operates out of Sharjah International Airport. It has been recognized as the best low-cost carrier in the Middle East and North Africa region. Air Arabia has succeeded through its strategy of targeting customers who cannot normally afford to fly by offering low fares. It keeps costs low through measures like operating a universal aircraft model for training, using fuel-efficient sharklet technology, and having dedicated but customer-oriented crew and user-friendly online services. However, Air Arabia faces challenges from increasing fuel and operating costs. It must strike the right balance between price and value to maintain its leadership position as other airlines could adopt its low-cost model.
This virtual simulation program was developed to help airline management teams understand competitive market dynamics and improve problem solving and decision-making skills.
Find out more at: http://www.iata.org/airline-business-simulation
This document provides an overview of the major modes of transportation available to logistics managers: rail, motor, water, pipeline, and air. It discusses the characteristics of each mode in terms of cost, transit time, reliability, capability, and accessibility. Rail transportation has the capability to carry a wide variety of products but limited accessibility. Motor carriers have high accessibility but higher costs than rail and water. Water transportation has relatively low costs but long transit times. Air transportation has the fastest transit times but highest costs. Pipelines are only suitable for transporting oil. The document also discusses intermodal transportation and provides a table rating each mode across various selection determinants.
This document provides an overview of transportation systems and carrier selection. It discusses the economic role of transportation, the basic modes of transportation including their characteristics and market share, and the carrier selection process. Key factors in carrier selection are discussed such as cost, transit time, reliability, and capability. Legal classifications of carriers including common, contract, and private carriers are also overviewed.
The document discusses various aspects of transportation and distribution management. It covers key topics such as:
- The importance of transportation in logistics and how it adds value by moving goods across distances.
- The different modes of transportation including road, rail, water, air, and pipeline. It discusses factors that affect the cost, speed, and consistency of transportation performance.
- The objectives of transportation in minimizing costs and transit time while fulfilling continuous demand.
- Recent trends in transportation and how different modes are adapting to changes in the economy and technology.
This document provides an overview of supply chain management and logistics management. It discusses key concepts like distribution management, inventory management, transportation management, warehousing, and the role of third-party logistics providers. The various modes of transportation like rail, road, water, air, and pipelines are explained. Factors to consider when selecting transportation modes include cost, speed, consistency and volume. The document also outlines benefits and potential savings from using third-party logistics, as well as some shortcomings.
This document discusses various aspects of transportation and fleet management. It begins by defining transportation and its role in logistics. It then examines the different determinants companies consider when selecting carriers, such as transit time, reliability, and accessibility. The document also reviews various modes of transportation like railroads, motor carriers, water carriers, and air carriers. It covers intermodal transportation methods like containerization and piggybacking. Finally, it discusses legal classifications of carriers and indirect carriers.
The document summarizes a study on the potential for using cargo bicycles for freight transport in London. Key findings include:
- Interviews were conducted with existing cargo bike operators, retailers, and carriers who expressed interest in cargo bike pilots.
- Five potential pilot projects were outlined involving own-account fleets, 3rd party carriers, and shopping delivery.
- Barriers like perception, range, and payload can be addressed, while benefits include lower costs, parking access, and environmental impact. The report identifies opportunities for TfL to further trials with interested operators.
This document discusses current trends and opportunities in supply chain and real estate optimization. It begins by noting the economic downturn and constraints on capital, as well as rising fuel and energy costs. Companies are increasingly competing through their supply chains. The document then discusses supply chain management and the various entities involved. It notes how fuel costs have increased exponentially relative to real estate costs, forcing changes in transportation networks. Various modal options like trucks, rail, air and water are discussed. The concept of network optimization and developing flexible strategies is covered. The importance of fully coordinating supply chain and facility strategies is emphasized.
Transportation plays a key role in supply chain management by moving products across distances in a timely manner. As logistics has become increasingly important due to cost and customer service pressures, transportation management focuses on optimizing network freight flows and micro-level routing decisions. Analyzing lane densities and consolidation opportunities can produce efficiencies through vehicle sharing, temporal consolidation, and backhaul utilization. The goal is to improve transportation efficiency through techniques like load consolidation, scheduling optimization, and minimizing empty miles.
This document provides an overview of transportation in supply chains. It discusses the role of transportation in connecting suppliers and customers. Various modes of transportation are described, including truck, air, rail, water, pipeline, and intermodal. Advantages and disadvantages of each mode are outlined. The document also discusses transportation infrastructure and policies, factors that influence transportation network design such as costs and customer needs, and provides examples of direct shipping networks and networks using consolidation points. It concludes with a case study of the unique dabbawala system used in Mumbai to deliver home-cooked meals to workers.
I gave this presentation to the department Technology and Operations Management to explain my thoughts on how sea ports act in global supply chains through organisational, logistics, and information networks.
A presentation by Dr Andrew Shaw (Associate Director: PWC) at the Transport Forum SIG 21 April 2016 hosted by T-Systems SA Pty)Ltd. The theme for the event was: "Innovation in Transnet" and the topic of the presentation was: "Innovation in Transnet"
This document summarizes research on light paratransit vehicles in various cities around the world. It finds that these smaller, privately operated vehicles can address many deficiencies of large, publicly operated transport systems by being more flexible, convenient, and cost-effective. The document reviews successful examples of light vehicle systems in 12 cities, finding they capture large shares of ridership and are often profitable, unlike the losses incurred by larger public systems. It concludes light vehicles could significantly improve transport in London by adding a new, complementary service type.
Group members for Group No. 1 are Akshay Samant (Roll No. 04) and Harshita Deotare (Roll No. 19). Transportation is the movement of items from one place to another and is crucial for logistics. It allows for the efficient movement of products and impacts business costs and operations. Different modes of transportation like rail, road, water and air each have their own advantages and limitations.
Group 1 members are Akshay Samant (Roll No. 04) and Harshita Deotare (Roll No. 19). Transportation is the movement of items from one place to another and is crucial for logistics. It allows for the efficient movement of goods and impacts areas through its speed, costs, and capabilities. Different modes of transportation like rail, road, water, and air each have their own advantages and disadvantages.
Transportation is the operational area of logistics that
geographically moves and positions inventory. Transportation system is the physical link connecting a company with the customers, raw material suppliers, plants, ware houses and
distribution channel members. The five basic transportation modes are Rail, Highway, Water, Pipeline.
Why Road Haulage is the Best Transport Solution for Your Business.pdfRockley Transport
In the current progressive world of business and commerce, there is a need to move and carry goods from one place to another efficiently. Among various modes of transportation that are available in the market, road haulage has come up as an indispensable solution for carrying goods.
This document discusses supply chain transportation management. It begins with an overview of why logistics has become increasingly important due to cost pressures, customer service impacts, and the need for demand and supply planning consistency. It then covers transportation concepts like time and place utility, the role of transportation in value attainment, and transportation-related service elements. The rest of the document details transportation participants, regulation, industry structure, services, and changing environment. It emphasizes analyzing network freight flows to identify consolidation opportunities and improving transportation efficiency.
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How to Handle Open Web Application Security Project(OWASP) Top Vulnerabilitiescoast550
Handling OWASP top vulnerabilities requires a proactive and multi-faceted approach. It involves implementing secure coding practices, regular security assessments, and staying up-to-date with the latest security trends and patches. By fostering a security-first mindset and integrating security into the development lifecycle, organizations can significantly reduce the risks posed by these common vulnerabilities.
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Material Testing Lab Services in Dubai.pptxsandeepmetsuae
Dubai is home to numerous advanced material testing labs, offering state-of-the-art facilities for a wide range of industries. These labs provide critical services such as mechanical testing, chemical analysis, and non-destructive testing, ensuring the quality and durability of materials used in construction, aerospace, and manufacturing.
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2. Chapter 9 Management of Business Logistics, 7th Ed. 2
Learning Objectives-After reading this
chapter, you should be able to do the following:
Explain the economic role transportation
plays in the economy.
Discuss the economic and service
characteristics of the basic modes.
Describe the carrier selection process.
Discuss the economic effect of rates, transit
time, reliability, capability, accessibility, and
security in the carrier selection decision.
3. Chapter 9 Management of Business Logistics, 7th Ed. 3
Learning Objectives
Compare the advantages and disadvantages
of using common, regulated, contract,
exempt and private carriers --- the five legal
classes of carriers.
Discuss the economic and service
characteristics of intermodal transportation
and explain the dominance of rail-truck
(piggyback) intermodal service.
4. Chapter 9 Management of Business Logistics, 7th Ed. 4
Learning Objectives
Discuss the economic rationale of using
containerization.
Discuss the economic and service
characteristics of indirect and special carriers.
5. Chapter 9 Management of Business Logistics, 7th Ed. 5
The Role of Transportation in
Logistics
Transportation is the physical link connecting
the firm to its suppliers and customers.
In a nodes and links scenario, transportation is
the link between fixed facilities (nodes).
Transportation also adds value to the product
by providing time and place utility for the
firm’s goods.
6. Chapter 9 Management of Business Logistics, 7th Ed. 6
The Transport Selection Decision
The Transportation – Supply Chain
Relationship
Firms need to recognize that the lowest
cost carrier does not necessarily guarantee
that this carrier will result in the lowest
landed cost.
Therefore, firms need to keep the big
picture in mind when attempting to select
a carrier.
7. Chapter 9 Management of Business Logistics, 7th Ed. 7
The Transport Selection Decision
The Carrier Selection Decision:
Various modes of transportation should be
considered.
Choose a carrier or carriers within the
selected mode, if there is a choice.
Carefully examine the service capabilities
of the carrier as services can vary widely
between carriers.
8. Chapter 9 Management of Business Logistics, 7th Ed. 8
Figure 9-1
The Carrier Selection Decision
9. Chapter 9 Management of Business Logistics, 7th Ed. 9
The Transport Selection Decision
Carrier Selection Determinants:
Cost
Transit time and reliability
Can be a competitive advantage
Lowers customers’ inventory costs
Capability
Accessibility
Security
10. Chapter 9 Management of Business Logistics, 7th Ed. 10
Figure 9-2 Carrier Selection
Determinants and User Implications
11. Chapter 9 Management of Business Logistics, 7th Ed. 11
The Transport Selection Decision
The Pragmatics of Carrier Selection:
Transit time reliability
Negotiated rates
Consolidating shipments among a few
carriers
Financial stability
Sales rep
Special equipment
12. Chapter 9 Management of Business Logistics, 7th Ed. 12
Figure 9-3 Importance Ranking
of Carrier Selection Determinants
13. Chapter 9 Management of Business Logistics, 7th Ed. 13
The Basic Modes of
Transportation3
The basic modes available to the logistics
manager are rail, motor, water, pipeline, and
air.
Distribution of ton-miles* for the various
modes is outlined in Table 9-1.
*(a ton-mile is one ton of cargo carried one mile, and is
a standard statistical measurement used in the
transportation industry).
14. Chapter 9 Management of Business Logistics, 7th Ed. 14
Table 9-1
Modal Distribution of Ton-Miles
15. Chapter 9 Management of Business Logistics, 7th Ed. 15
The Basic Modes of
Transportation: Railroads
Capable of carrying a wide
variety of products, much more
so that other modes.
Very small number of carriers;
likely only one will be able to
serve any one customer location.
Trend is to merge smaller
companies into larger ones with
ultimate goal of having perhaps
two transcontinental rail carriers.
16. Chapter 9 Management of Business Logistics, 7th Ed. 16
The Basic Modes of
Transportation: Railroads
This would permit seamless
dock-to-dock service by one
company; a distinct
improvement over current
systems.
Rail is a long haul, large
volume system (high fixed
costs; own rights-of-way).
Accessibility can be a problem.
Transit times are spotty, but
are generally long.
17. Chapter 9 Management of Business Logistics, 7th Ed. 17
The Basic Modes of
Transportation: Railroads
Reliability and safety are
improving and are generally good.
Premium intermodal services
Straight piggyback and
containerized freight
Double stacks
RoadRailer service
Unit train service
Intermodal Marketing Company
(IMC)
18. Chapter 9 Management of Business Logistics, 7th Ed. 18
On the Line:
It’s the Service, Stupid
It’s difficult to assess the railroad industry without
getting into the subject of service…
Shippers complain; rail carriers say they are
trying to improve.
Wall Street says that improving service is
imperative.
Actual improvements are coming, but slower than
the demand for faster, more reliable, and cheaper
service. One problem is that standards continue
to increase.
19. Chapter 9 Management of Business Logistics, 7th Ed. 19
The Basic Modes of
Transportation: Motor Carriers
The motor carrier industry is characterized by
a large number of small firms. In 1999, there
were 505,000 registered motor carriers.
Low cost of entry causes these large
numbers.
Used by almost all logistics systems and
account for 82 percent of U.S. freight
expenditures.
Consists of for-hire and private carriers.
20. Chapter 9 Management of Business Logistics, 7th Ed. 20
Figure 9-4 Overview of
Interstate Motor Carrier Industry
21. Chapter 9 Management of Business Logistics, 7th Ed. 21
The Basic Modes of
Transportation: Motor Carriers
Large number of small firms; in 1999, there were
12,500 regulated carriers, only 7% of which had
revenues >$10 million, with 76% having
revenues <$3 million.
Characterized by low fixed costs and high
variable costs.
Do not own their rights-of-way.
Limited operating authority regarding service
areas, routes, rates and products carried.
22. Chapter 9 Management of Business Logistics, 7th Ed. 22
The Basic Modes of
Transportation: Motor Carriers
High accessibility
Transit 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.
23. Chapter 9 Management of Business Logistics, 7th Ed. 23
Figure 9-5 Overview of the
Domestic Water Carrier Industry
24. Chapter 9 Management of Business Logistics, 7th Ed. 24
The Basic Modes of Transportation:
Domestic Water Carriers
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.
25. Chapter 9 Management of Business Logistics, 7th Ed. 25
The Basic Modes of Transportation:
Domestic Water Carriers
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
26. Chapter 9 Management of Business Logistics, 7th Ed. 26
The Basic Modes of Transportation:
International Water Carriers
General cargo ships
Large high capacity cargo
holds
Engaged on a contract basis
Many have self-contained
cranes for loading/unloading
Bulk carriers
Specially designed to haul
minerals
Can handle multiple cargoes
27. Chapter 9 Management of Business Logistics, 7th Ed. 27
The Basic Modes of Transportation:
International Water Carriers
Tankers
Specially designed for
liquid cargoes
Largest vessels afloat,
some VLCCs at 500k+ tons
Container ships
High speeds for ships;
increasingly more common
and important
Larger vessels can handle
up to 5,000 containers.
28. Chapter 9 Management of Business Logistics, 7th Ed. 28
The Basic Modes of Transportation:
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
Other
OBO multipurpose carriers
Barges (not transoceanic)
29. Chapter 9 Management of Business Logistics, 7th Ed. 29
The Basic Modes of
Transportation: Air Carriers
Limited number of large carriers earn about 90% of
the revenue.
Any of the air carriers can carry air freight although
some haul nothing but freight.
Cost structure is highly variable; do not own rights-
of-way.
Transit times are fastest of the modes, but rates are
highest.
30. Chapter 9 Management of Business Logistics, 7th Ed. 30
The Basic Modes of
Transportation: Air Carriers
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.
31. Chapter 9 Management of Business Logistics, 7th Ed. 31
The Basic Modes of
Transportation: Pipelines
Refers only to the oil
pipelines, not natural gas
Not suitable for general
transportation
Some research has been
performed to move minerals
in a liquid medium, but
outside of a few attempts to
transport slurried-coal via
pipeline, no real successes
have occurred.
32. Chapter 9 Management of Business Logistics, 7th Ed. 32
The Basic Modes of
Transportation: Pipelines
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.
33. Chapter 9 Management of Business Logistics, 7th Ed. 33
Table 9-2:
Performance Rating of Modes
Selection
Determinants Railroad Motor
Modes
Water Air Pipeline
Cost 3 4 2 5 1
Transit time 3 2 4 1 ---
Reliability 2 1 4 3 ---
Capability 1 2 4 3 5
Accessibility 2 1 4 3 ---
Security 3 2 4 1 ---
34. Chapter 9 Management of Business Logistics, 7th Ed. 34
Legal Classifications of Carriers:
Common Carrier
For-hire carrier that serves the
general public at reasonable rates
and without discrimination.
Stringent economic regulation
designed to protect the public.
Must transport all commodities offered...
Commodities are limited to those that the carrier’s
equipment will handle.
35. Chapter 9 Management of Business Logistics, 7th Ed. 35
Legal Classifications of Carriers:
Common Carrier
Carrier is liable for damages to
products carried.
Exceptions to liability include
acts of God, acts of the public
enemy, acts of public authority,
acts of the shipper and defects inherent in the
goods.
Continued service is assisted by ceiling and floor
limits on the rates charged.
Backbone of the transportation industry.
36. Chapter 9 Management of Business Logistics, 7th Ed. 36
Legal Classifications of Carriers:
Regulated Carrier
Regulated carriers are found in motor and water
carriage.
The ICC Termination Act of 1995 eliminated most of
the common carrier economic regulation for these
two modes, including entry controls, reasonable
rates, and nondiscrimination provisions.
When acting as a contract carrier,
not subject to STB economic
regulations.
Must provide safe and adequate
service.
37. Chapter 9 Management of Business Logistics, 7th Ed. 37
Legal Classifications of Carriers:
Contract Carriers
For-hire carrier that does
not have to serve the
general public.
May serve one or a few
shippers exclusively.
May offer specialized equipment.
Not subject to regulation on services; rates
usually lower than common or regulated
carriers.
38. Chapter 9 Management of Business Logistics, 7th Ed. 38
Legal Classifications of Carriers:
Contract Carriers
Other aspects of the carrier/shipper
relationship are made a
part of the contract
between the two parties.
Becoming more popular
as logistics managers
use contract carriage
to assure rates and
service levels.
39. Chapter 9 Management of Business Logistics, 7th Ed. 39
Legal Classifications of Carriers:
Exempt Carriers
For-hire carrier exempt from
economic regulation regarding rates
and services.
Limited entry controls; low rates.
Usually haul agricultural products,
but there are special rules as to
what may be hauled by each mode
of transportation, e.g., rail
piggyback is exempt..
Limited number of carriers restricts
availability.
40. Chapter 9 Management of Business Logistics, 7th Ed. 40
Legal Classifications of Carriers:
Private Carriers
Private carriage is the firm’s own
transportation.
Not for-hire and not subject to
Federal regulations.
May not be the firm’s primary
business but can charge a
intracompany fee for
transportation services.
Almost exclusively motor, but some rail, air and
water also exist.
41. Chapter 9 Management of Business Logistics, 7th Ed. 41
Legal Classifications of Carriers:
Private Carriers
Firms gain ultimate control
over shipments and achieve
maximum flexibility in
moving goods.
Backhauls are usually empty or return
materials to the firm’s plants and/or
warehouses.
Requires a large capital investment.
Requires management time and expertise.
42. Chapter 9 Management of Business Logistics, 7th Ed. 42
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.
43. Chapter 9 Management of Business Logistics, 7th Ed. 43
Figure 9-6
Types of Intermodal Services
44. Chapter 9 Management of Business Logistics, 7th Ed. 44
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.
45. Chapter 9 Management of Business Logistics, 7th Ed. 45
Intermodal Transportation:
Containerization
Referred to as Container-on-Flat-Car
(COFC); 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%.
46. Chapter 9 Management of Business Logistics, 7th Ed. 46
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.
47. Chapter 9 Management of Business Logistics, 7th Ed. 47
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.
48. Chapter 9 Management of Business Logistics, 7th Ed. 48
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 rates
Motor competitive transit times
49. Chapter 9 Management of Business Logistics, 7th Ed. 49
Indirect and Special Carriers
Small-Package Carriers
Evolved to carry small,
irregular shipments
Fast service, premium rates
examples are UPS, FedEx, RPS, etc.
Consolidators and Freight Forwarders
Consolidates many small shipments
Saves shippers by using CL or TL rates
50. Chapter 9 Management of Business Logistics, 7th Ed. 50
Indirect and Special Carriers
Shippers Associations
Acts as a consolidator for members
Object is also to get lower rates
Brokers
Acts as an intermediary
May be licensed by STB
Often used to provide backhauls for private
carriers
51. Chapter 9 Management of Business Logistics, 7th Ed. 51
Indirect and Special Carriers
Intermodal Marketing Companies (IMC)
An intermediary that solicits shipments for
rail/motor intermodal service.
Can speed traffic through consolidation (fills
the normal two-trailer load on an intermodal
flat car, avoiding delays waiting for another
trailer going to the same destination).
Particularly advantageous for small (one
trailer) shippers.
52. Chapter 9:
Summary and Review Questions
Students should review their knowledge of the
chapter by checking out the Summary and Study
Questions for Chapter 9.