Download to read offline
transportation-.pptx
- 1.
- 2. TRANSPORTATION FUNDAMENTALS STRATEGY ANDDECISIONS • A transportation strategy, to be effective in supply chain management, is not playing one carrier off against another. • The strategy, regardless of whether you are involved with domestic or international,
- 3. Transportation Strategy • Customerrequirements. The supply chain involves continuous and efficient movement of product from v endor to manufacturer to customer. • Shipments must move timely. Customers demand th eir shipments be delivered as they require--on the dat e needed, by the carrier preferred, in the proper shippi ng packaging method and complete, both shipped co mplete and delivered complete and in good order.
- 4. Transportation Strategy • Modeselection. How will you move your pro duct, by air versus surface? What roles do tran sit time play in your supply chain? How will th e inventory and service impacts be measured a s compared to the freight charges? • Carrier relationships. Volume creates carrier/ forwarder attention.
- 5. Transportation Strategy • Measuring/benchmarking.You need to know how well your strategy and your carriers are pe rforming. • Regulatory impact. Regulatory changes can c hange, for better or worse, your strategy. • Carrier mergers and alliances and closings. This is an important and difficult issue. In the f ifteen years or so since motor carrier deregulati on, there have been significant changes.
- 6. Transportation Strategy • Flexibility.Change is happening. It is not a qu estion of whether or not it happens.
- 7. DECISION MAKING • DECISIONMAKING is the process by whic h one alternative is selected over another. Deci sion making generally occurs in the planning p hases of transportation projects, but last minute decision making has been shown to occur, som etimes successfully.
- 8. The key decisionlevels • Long-Term Decisions • Lane Operation Decisions • Dock Level Operations
- 9. The key decisionlevels • Long-Term Decisions- At the highest strategic decision level, transportation managers must fu lly understand total supply chain freight flows and have input into network design.
- 10. The key decisionlevels • Lane Operation Decisions- The second level of decision-making regards lane operation deci sions. Where network design decisions are con cerned with long-term planning, these decision s focus on daily operational freight transaction s.
- 11. The key decisionlevels • Dock Level Operations- The final set of trans portation decisions involves dock level operati ons, such as load planning, routing, and schedu ling. These activities encompass the operationa l execution of the higher-level planning decisio ns.
- 12. The key decisionlevels • Applied systems- Analysis is the use of rigoro us methods to assist in determining optimal pla ns, designs and solutions to large scale proble ms through the application of analytical metho ds. • Systems analysis- Emerged during World War II, especially with the deployment of radar in a coordinated way. It spread to other fields such as fighter tactics, mission planning and weapo ns evaluation.
- 13. OBJECTIVES OF TRANSPORTATION • Improvethe safety of all users of the syste m for all modes of travel. Maintain the clea nliness and good repair of transportation in frastructure. Prioritize transportation projec ts that enable active, healthy communities.
- 14. Best practices tohelp you achieve those objectives • 1) Increased efficiency - To increase efficienc y, a company must develop cost-effective trans portation rates while reducing overhead, total i nventory, and overall cost-per-order processing . • 2) Improved customer service - In direct mar keting enterprises, fulfillment operations are in partnership with marketing and merchandising.
- 15. Best practices tohelp you achieve those objectives • 3) Increased sales - How can inbound and out bound logistics and transportation help a retail er’s sales? Several opportunities exist for impr oving service, and those in turn can be used to marketing’s advantage. • 4) Building relationships - True two-way coll aboration between retailer and carrier is key to the success of logistics execution.
- 16. Forms of Transportation •Trains - the most used and unique kind of tran sportation around the globe. • Cars - the most used of today's kind of transpo rt for personal use. • Buses and Trucks - trucks and buses are essen tial modes of transportation all over the world. • Three wheelers - it is the symbol of a progress ing nation and it is motorized version of the cy cle rickshaw.
- 17. Forms of Transportation •Motorbikes - it is the form of carrier favored b y the single travelers who love adventure. • Airplanes - are the forerunners of the global a ge. • Boats - it is commonly used as personal or pri vate transport, trading and fishing for thousand s of years.
- 18. Forms of Transportation •Ships - long ago, travelling to faraway places c an be obtained by ship. And it is common way of trading, shipping. • Animal-Powered Transport - many countries use these animal powered transport because th ey are much cheaper compared to the other mo des. • Human-Powered Transport - human drawn c arriages and cycle rickshaws can still be seen a nd are used in some countries.
- 19. Factors Affecting Transportation Performance •Terminal Facilities - one reason for this is that any delay or any inconvenience caused to truc k operators is not a loss to the project but is tre ated as loss to the carrier. • Vehicles - an important features of movement of finished products of major projects is the ty pe of vehicle used for movement.
- 20. Factors Affecting Transportation Performance •Prime Movers - motive power utilized for the internal handling of vehicles is another importa nt component of the total movement system. • Routes and Sectional Capacity - the importa nt aspect of transport planning is the routes for streams of traffic, Viz., roadways, railways, wa terways and airways.
- 21. Factors Affecting Transportation Performance •Transit Time - transmit time generally never r eceives adequate attention in the planning of m ajor projects. • Weigh Bridge - these are generally inaccurate, if not actually out of order. • Distribution Pattern - the pattern of moveme nt of the finished produced by road or rail must be planned properly
- 22. Factors Affecting Transportation Performance •Nature of Product - another aspect, which is o ften disregarded by project managements as w ell as common carrier, is the variability arising out of the specialized nature of products to be moved.
- 23. The following measuresof effectiveness • Speed - immediate response and on time deliv ery. • Cost - the more urgent the delivery, the higher the cost. • Reliability - the quality of service rendered in terms of speed.
- 24. Transportation evaluation • Transportationevaluation - it is all direct ch arges associated with the movement of the Pro duct from one location from another.
- 25. Most important criteriato consider for transport selection • 1. Competitive rates • 2. Customers Service • 3. Transport reliability • 4. Pick-up and delivery service • 5. Availability of handling equipment • 6. Geographic coverage • 7. Billing accuracy • 8. Insurance coverage and damage claim • 9. Electronic data interchange for effective communicatio n
- 26. Freight rate determination Thefollowing factors are the determinants in the freight rate charges… •Shipping weight per cubic meters. •Liability for damage •Perishable product needs refrigeration. •Liability for damage to other commodities. • Dangerous cargo that is subject to explosion.
- 27. • Susceptibility totheft • The value of the product • Loading and handling difficulty • Excessive length or weight • Trade condition to the forth of destination • Quantity offered as a single consignment • Value of service
- 28. ROUTE OF GOODS •ROUTE OF GOODS: The trade routes served to transfer raw materials, foodstuffs, and luxur y goods from areas to others.
- 29. 8 TRADE ROUTE •SILK ROAD // THE MOST FAMOUS TRADE ROUTE IN THE WORLD • SPICE ROUTE // BRINGING FLAVOR FROM EAST TO WEST • INCENSE ROUTE // STARRING THE DOMESTICATED CAME L • AMBER ROAD // TRADING BEADS • TEA ROUTE // THE PRECIPITOUS TEA-HORSE ROA D • SALT ROUTE // VIA SALARIA • TRANS-SAHARAN TRADE ROUTE // TRADING ACRO SS THE DESERT • TIN ROUTE // BRONZE AGE BUSINESS
- 30. TRANSPORTATION COST • TRANSPORTATIONCOST - a significant p art of a company's overall logistics spending. a cost that is passed on to the customer and th e price of goods continues to rise.
- 31. DIFFERENT TRANSPORTATION COST • 1.Transport Costs and Rates-All users (e.g. individuals, cor porations, institutions, governments, etc.) must negotiate or bid for the mobility of passengers and freight because supplies, dis tribution systems, tariffs, salaries, locations, marketing techniq ues as well as fuel costs are constantly changing. • 2.Costs and Time Components -Transportation offers a spect rum of costs and level of services, which results in substantial differences across the world. price of a transport service does n ot only include the direct out-of-the-pocket money costs to the user but also includes time costs and costs related to possible i nefficiencies, discomfort and risk (e.g. unexpected delays).
- 32. Costs and TimeComponents • a. Distance and time- It can be expressed in te rms of length, time, economic costs or the amo unt of energy used • b. Type of product- With containerization the type of product plays little in the transport cost since rates are set per container, but products st ill need to be loaded or unloaded from the cont ainer.
- 33. • c. Economiesof scale and Energy- Economie s of scale or the possibilities to apply them are particularly suitable for bulk commodities such as energy (coal, oil), minerals and grains if the y are transported in large quantities. • d. Empty backhauls -Many transport interacti ons involve empty backhauls since it is uncom mon to have a perfect match between an inbou nd and a return trip.
- 34. • e. Infrastructuresand modes -The efficiency and capacity of transport modes and terminals has a direct impact on transport costs. Poor infr astructures imply higher transport costs, delays and negative economic consequences • f. Competition, regulation and subsidies-Tra nsport services taking place over highly compe titive segments tend to be of lower cost than on segments with limited competition (oligopoly or monopoly).
- 35. • g. Surcharges,taxes and tolls- Surcharges refer to an array of fees, often set in an arbitrary fas hion, to reflect temporary conditions that may i mpact on the costs assumed by the transporter.
- 36. DIFFERENT TRANSPORT COST 3Types of Transport Costs • Terminal costs. Costs that are related to the lo ading, transshipment and unloading. • Linehaul costs. Costs that are a function of the distance over which a unit of freight or passen ger is carried. Weight is also a cost function w hen freight is involved. They include labor and fuel and commonly exclude transshipment cost s.
- 37. • Capital costs.Costs applying to the physical a ssets of transportation mainly infrastructures, t erminals and vehicles.
- 38. Steps on howto compute for Transportation Cost: Step 1 •Calculate the cost of ground transportation. Include the number and cost of containers to be transported (if payi ng a set fee per container or paying per weight), driver f ees (along with fees associated with maintaining his truc k) and fuel costs (single or round trip). In addition, you are paying for the fees of the truck whether it is full or n ot, so combine your costs by joining with other farmers to fill the truck to capacity.
- 39. Step 2 • Totalthe final number of boxes of product to be shipped and their weight per unit, if applicable. Determine the amount of taxes (road and/or ship ping taxes), cost of personnel or workers.
- 40. Step 3 •Multiply theground transportation number by the num ber of boxes to be transported, which equals the total co st of transport. As with the fluctuating prices of supply a nd demand, the total cost of transport can vary. There ar e other methods of transport such as air and sea. Add in the cost of ground transportation to the additional transp ortation costs.
- 41. FACTORS DETERMINING TRANSPORTATION RATES •Fuel costs it is the cost of maritime and land transport is, of course, related to the price of fuel. The labor market for commercial drivers Increasing wages and competition among carriers for truck drivers can have an upward impact on transportation costs.
- 42. • Demand forfreight Pricing depends on the volume of product being shipped by operators just as much as it depends on the actual, underlying costs. • Customer loyalty Merchants who can offer a carrier regular, consistent business are well placed to receive a preferential rate, especially if demand across the industry is low.
- 43. • Vehicle capacity Sometrucking companies operate an older, smaller fleet. While these trucks are entirely adequate, newer trucks are designed to maximize storage space, allowing a truck to split space even further • Government regulation Regulation may directly impact the freight industry and its bottom line; for example, governments often set maximum driving hours for commercial operators.
- 44. • Geopolitical events Internationalmaritime shipping has become fraught with the dangers of pirates and rogue governments. • Your reputation as a merchant It is the price quoted by a carrier will, at least in part, reflect the carrier’s expectations as to the packing of pallets and the time to load.