Postgraduate Diploma

in
LOGISTICS AND SUPPLY
CHAIN MANAGEMENT
UNIT 6: GREEN LOGISTICS AND TRANSPORT
MANAGEMENT
 Session

Chapter 2 : Transportation and Packaging

 Part - 1

PACKAGING AND MATERIALS HANDLING

 Learning Objectives

• To know how product features affect packaging and materials handling

• To familiarize you with packaging fundamentals such as packaging functions and labeling
• To appreciate select issues that affect packaging such as environmental protection and
packaging inefficiencies
• To learn about unit loads and the unit load platform
• To identify materials handling principles and materials handling equipment
 Protective Packaging and Materials Handling Key Terms

• Packaging
• Pallet (skid)
• Part-to-picker systems
• Picker-to-part systems
• Shrink-wrap
• Slip sheet
• Unit load (Unitization)
• Weighing out
 Product Characteristics

• Physical Characteristics
– Substance form
(solid, liquid, and gas)
– Density of bulk materials
(weight per volume)
– Ability to withstand exposure to elements
(The physical characteristics of some goods can change while they are
moving )
– Respiration
• Chemical Characteristics
– Incompatible products
(Prolonged exposure to ethylene can cause ethylene-sensitive products to
yellow, soften, and decay)
– Products requiring chemicals
• Characteristics must be made known to consumers
 Product Characteristics

Figure : Portion of Fabric Care Label for Levi’s Jeans Sold in Japan
 Different Types of Labels Used in Garments

1. Brand or Main Label: Main labels indicate a Brand name or Brand Logo of the
company that sources and sells clothes.
2. Size Label: Size label defines a specific set of measurements of the human
body. Sizes labels may be printed only a later to denote a specific size. Such as
S for Small, M for Medium and L for Large size garments.
3. Care Label: This label includes wash care and ironing instruction.
4. Flag Label: A small label attached at outside side seam. Flag labels are normally
made of brand logos and it is primarily used as design features.
5. Manufacturer Label: This label includes manufacturer’s code given by buyers.
6. Batch Mark Label: A label that indicates which sewing line or batch had
made the particular garment.
7. Special Label: 100% Cotton, Organic Cotton is an example of such special
labels. Special labels normally attached to draw customer attention at the time
of purchasing.
 Packaging Fundamentals

• Building-blocks concept (a very small unit is placed

into a slightly larger unit)
– Smallest unit is consumer package
– Each unit is stocked within the next larger one to
protect the product
• Packaging
– refers to materials used for the containment,
protection,
handling, delivery, and presentation of goods
– Serves three general functions
• To promote
• To protect
• To identify (label) the relevant product
 Promotional and Protective Functions of Packaging

• Protective functions of packaging

– Enclose materials
– Restrain materials from undesired movement
– Separate contents to prevent undesired contact
– Cushion contents from outside vibrations and shocks
– Support the weight of identical containers stacked above
– Position the contents to provide maximum protection
– Provide for uniform weight distribution
– Provide exterior surface for labeling
– Be tamperproof
– Be safe for consumers or others
 Package Testing and Monitoring

• A package system requires 3 types of information to design

– Severity of the distribution environment
– Fragility of the product
– Performance characteristics of various cushion materials (something providing support or protection against impact)
• Package testing (The packages are subject to tests that attempt to duplicate all the expected various shipping hazards)
– Vibrations
– Dropping
– Horizontal impacts
– Compression
– Overexposure to extreme temperatures or moisture
– Rough handling
Kaiser Aluminum’s Moisture- Alert Label
 Labeling

• Labeling
– Retroflective labels
(labels that can be read by optical scanners)
– Batch numbers
– Weight
– Specific contents
– Instructions for use
– Information to allow passage through
customs
– Compliance labeling
– One- or two-dimensional bar codes
– Smart labels or RFID labels

Shipping Labels
 Labeling

• Hazardous Materials
- Governmental regulations address labeling of hazardous materials
• While the specific requirements differ for each hazardous commodity, all of the
Requirements involve
- Labeling
- Packaging and repackaging
- Placing warnings on shipping documents
- Notifying transportation carriers in advance
• Globally Harmonized System of Classification and Labeling of Chemicals (GHS) is a global
system to classify and label hazardous materials.
 Dangerous Goods

According to section 2 of the Dangerous Cargoes Act, 1953, dangerous goods means –

a) Any cargoes containing any goods shown as ‘Explosives’ in the Comprehensive Classified List of Government
Explosives compiled and issued by the Government or by he nominated authority of the Government or any
ammunitions; or

b) Petroleum, when the flashing point of such petroleum is below one hundred- and fifty-degrees Fahrenheit; or

c) Goods classified as dangerous in the Government Stowage Instructions prepared by it or by such authority as the
Government may fix from time to time; or

d) Any cargoes which are liable to fire or explosion, and which are declared by the Government to be dangerous
cargoes.

Examples of dangerous goods include, among others, include Calcium Carbide; Sulphur; Refrigerant Gas, Fish Meal,
Tetrafluoroethene, Liquefied Gas, Isobutane, Chlorodifluoromethane etc.
 Customs procedure of DG Cargoes

• Usual customs procedure such as submission of goods declaration with necessary import documents to the
Customs authority and release order of Customs is necessary for Dangerous Goods.

• In addition to this, clearance/permission from Bangladesh Navy is necessary.

• Currently, Bangladesh Navy's clearance/approval is required for 3506 dangerous goods (as per Chittagong
Customs House Meeting Minutes: Letter no S-4/9/proshason/Time release study/2013-14/356 date 06 January
2016).

• In order to obtain permission from Bangladesh Navy, all inbound dangerous cargo must have declaration of IMO
Class and number in the cargo manifest. For all inbound Dangerous Goods, B/L and Manifest must mention Proper
Shipping Name, Technical Name/Chemical Name.

• Hazardous cargo under IMO Class 1 and 7 are allowed landing for direct delivery with prior permission of
Bangladesh Navy and subject to the readiness of consignee for taking direct delivery.

• All the others hazardous cargo covered by IMO Class 2, 3, 4, 5, 6 and 8 are allowed landing with prior permission
of the naval authorities. Telephone/fax and email address of the consignee/notifying party is to be mentioned in the
Bill of Lading for all hazardous cargo.
 Customs procedure of DG Cargoes

• Dangerous goods can be identified by reading the International Maritime Dangerous Goods (IDMG) code
mentioned in the Bill of Lading/Import manifest. The port authority, based on the IDMG code, determines the
category of Dangerous Goods and which level of precaution will be taken for a specific Dangerous Goods

• Bangladesh Navy is the authority for inspection of Dangerous Goods, and upon satisfaction it issues the NOC. To
receive approval/NOC for Dangerous Goods from Bangladesh Navy, importers will have to furnish following
documents in original:

1. AutBill of Lading, invoice, packing list.

2. horization certificate from the CCI&E.
3. Import permission of the Department of Explosives.
4. Storage and user license from DC.
 Issues in Packaging

Environmental Protection

• Reduce packing materials used

• Use packaging materials that are more environmentally friendly with recycled content
• Use reusable containers (closed-loop system)
• Retain or support services that collect used packaging and recycle it (closed-loop system)

Metric System

• U.S., Liberia, and Myanmar (formerly Burma) are the only 3 countries in the world that do not use the metric
system of measurement
• Increasing pressure on U.S. exporters to market their products overseas in metric units
• Imperial System: Feet, miles, gallons, quarts, pounds and ounces are all part of the imperial system.
 Identifying Packaging Inefficiencies

• Building-blocks concept is useful for analyzing packaging inefficiencies.

• Packaging inefficiencies can have a number of undesirable logistics consequences including:
❑ Increased loss
❑ Increase damage
❑ Slower materials handling
❑ Higher storage costs
❑ Higher transportation costs
Table : A Hypothetical Example of Packaging Inefficiency
 Packaging’s Influence on Transportation Considerations

• Carrier’s tariffs and classifications influence the type of packaging and packing methods
that must be used.
• Carriers established classifications for two main reasons:
o Packaging specifications determined by product density lead to the best use of the
equipment’s weight and volume capabilities
o Carrier specifications for protective packaging reduce likelihood of damage to
products thus reducing the loss and damage claims filed against the carrier
Boxmaker’s Guarantee
 Unit Loads in Materials Handling

• A unit load (unitization) refers to consolidation of several units (cartons or cases) into larger units
to improve efficiency in handling and to reduce shipping costs. Source: [Link]

• Handling efficiency can be facilitated by mechanical devices (pallet jack or forklift) as well as by
using a pallet or skid.

Advantages Disadvantages
‒ Additional protection ‒ Provides large quantity that sometimes is of
limited value to resellers dealing in smaller
‒ Pilferage is discouraged
quantities.
‒ More fragile items can be stacked inside the
‒ Must use mechanical or automated device to
load
move.
‒ Mechanical devices can be substituted for hand
labor
Automated Guided Vehicle (AGV)
 Unit Loads in Materials Handling

• Basic unit is a pallet or skid

– Can be constructed from wood, wood composites, plastic, paper, and metal
– Each pallet material has advantages and disadvantages
– Should be less than 50 pounds
• Pallet or skid alternatives
– Slip sheet
– Shrink-wrap
• Beyond the unit load
– Use of load-planning software
– Bracing
– Inflatable dunnage bags
– Load is subjected various forces including
• Vibration
• Roll
• Pitch
– Weighing out
 Materials Handling

• Materials handling refers to the “short-distance movement that usually takes place within the
confines of a building such as a plant or DC and between a build and a transportation service
provider.”
• How the products are handled depends on whether they are packaged or in bulk
• Handling may change the characteristics of the product
 Materials Handling Principles

10 Material Handling Principles Include:

 Materials Handling Equipment

• Two categories of handling equipment

– Storage
• Shelves
• Racks
• Bins
– Handling
• Conveyor systems
• Lift trucks
• Carts
• Cranes
• The choice of handling equipment can influence the type of storage equipment.
• The choice of storage equipment can influence the type of handling equipment.
• Material handling equipment can also be categorized as:
– Labor intensive
– Mechanized
– Automated
• Sufficient volume is needed to justify high cost of automated equipment
 Materials Handling Equipment

• An organization’s order picking and assembly system can also influence the type of
handling equipment.

➢ Picker-to-part systems an order picker goes to where a product is located

➢ Part-to-picker systems the pick location is brought to the picker, such as with carousels.
 Part - 2

TRANSPORTATIONS
 Learning Objectives

• To provide an overview of transportation infrastructures in several countries

• To identify the five modes of transportation and learn about their respective characteristics
• To discuss intermodal transportation
• To familiarize you with several types of transportation specialists
• To learn how different types of regulation impact transportation
• To identify the legal classification of transportation carriers
 Transportation: Key Terms

• – Accessorial service • – Private carriers

• – Barge • – Rail gauge
• – Broker • – Shippers’ association
• – Common Carrier • – Slurry systems
• – Consignee • – Surface Transportation Board
• – Contract carrier • – TEU
• – Container • – Terminal
• – Dept. of Transportation • – Ton miles
• – Dimensional (dim) weight • – Transportation
• – Excess capacity • – Truckload (TL)
• – Exempt carrier • – Unit load devices (ULD)
• – Freight forwarder • – Department of Transportation (DOT)
• – Intermodal transportation
• – Land bridge services
• – Less-than-truckload (LTL)
• – Line-haul
• – Lock
• – Parcel carriers
• – Piggyback transportation
 Transportation

• Transportation is the movement of goods and people between two points.

• Transportation influences or is influenced by the following logistics activities:
– Transportation costs are affected by node location
– Inventory requirements are influenced by mode
– Packaging requirements are dictated by mode
– Materials handling equipment and design of the docks are dictated by mode

– Maximum consolidation of loads achieved with order- management technology reduces costs
– Customer service goals influence carrier choice
• Five different types or modes of transportation include:

o Air o Hyperloop
o Motor carrier (truck) o Digital
o Pipeline o Cable Car
o Rail o Conveyor
o Water
 Overview of Transportation Infrastructure

• Wide disparities in the various

infrastructures exist between highly
populated countries

• Lack of infrastructure makes it difficult to

use that mode domestically
 Selecting Transportation Modes

Attributes

❑ Cost
❑ Speed (transit time from pickup to
delivery)
❑ Reliability (consistency of delivery)
❑ Capability (amount of different types of
product)
❑ Capacity (volume/weight can be carried
at one time)
❑ Flexibility (ability to deliver the product to
customer)
 Airfreight

• Airfreight
– Generally the fastest mode
– Expensive
– Accessorial service, if needed, adds cost and time
– Best suited for high-value, lower-volume urgent,
perishable or time-specific deliveries
– Dimensional weight used for rates

Advantages:
• Speed (line-haul)
Disadvantages:
• Cost
• Flexibility (need of accessorial service)
• Limited capacity
– Boeing 737: 10 tons; 777: 60 tons, 747: 100 tons
– Airbus A-380: 150 tons
Applicable: high-value, low-volume
 Airfreight

Examples of products that move by air:

• Auto parts and accessories
• Cut flowers and nursery stock
• Electronic or electrical equipment, i.e. iPods
• Fruits and vegetables
• Machinery and parts
• Metal products
• Photographic equipment, parts, and film
• Printed matter
• Wearing apparel
Airfreight reliability is problematic due to delays caused by:
– Weather
– Congestion and resultant delays with air passenger transportation (belly freight)
 Motor Carriers

• Motor Carriers
– Most important business user of the Interstate Highway System
– Primary advantage is flexibility
– Cost is generally lower when compared to airfreight
– LTL vs. TL

Advantages:
• Flexibility
• Capability
Disadvantages:
• Cost (only cheaper than airfreight)
• Limited capacity: 40 tons (Interstate Hwy)
 LTL Carriers

• Less-than-truckload (LTL)
– 150 to 10,000 pounds
– Too big to be handled manually, too small to fill a truck
– LTL trucks carry shipments from many shippers
– Prominent LTL carriers include:
• ABF Freight System
• FedEx Freight
• UPS Freight
• YRC (formerly Yellow Freight and Roadway)

– Process
• Local pick-up
• Origin terminal used to load aboard line haul
• Line haul to terminal near destination
• Destination local delivery on smaller trucks
• Consignee receives
 Pipelines

• Pipelines
– Only mode without vehicles
– Most reliable mode
– Tend to be the slowest mode
– Accommodates only liquid, liquefiable or gaseous products
– Capable of transporting large product volumes
– High fixed costs, but relatively low cost per unit due to large product volume
Advantages:
• No need for vehicles and vehicle operators
• Reliability
• Capacity
Disadvantages:
• One-way
• Limited capability
• High Initial Cost
• Flexibility
 Railroads
• Railroads
– U.S. dominated by four carriers
• Burlington Northern (BN)
• CSX
• Norfolk Southern (NS)
• Union Pacific
– Domination limits service and pricing options
– Neither “best” or “worst” on any of the six attributes
– Superior to air, motor, and pipeline, but inferior to
water when transporting different kinds of products
– Less flexibility, but more when compared to air,
water, and pipeline
– Superior to air and motor with regards to volume, but
inferior to pipeline and water
– Less expensive than air and motor, but more
expensive than pipeline and water
– Faster than pipeline and water, but slower than air and
truck
– Applicable: low-value, high-volume
 Water

• Water
– Relatively inexpensive
– Focus on lower value bulk commodities handled by
mechanical means
– Many different kinds of products can be carried
– Carry greater volumes than rail or truck
– Slow average speeds
– Somewhat unreliable

Advantages:
• Cost
Disadvantages:
• Speed (6 mph)
• Flexibility
Applicable: low-value bulk commodities
 Water

• Water
– Relatively inexpensive
– Focus on lower value bulk commodities handled by
mechanical means
– Many different kinds of products can be carried
– Carry greater volumes than rail or truck
– Slow average speeds
– Somewhat unreliable

Advantages:
• Cost
Disadvantages:
• Speed (6 mph)
• Flexibility
Applicable: low-value bulk commodities
 Intermodal Transportation

• Intermodal transportation refers to transportation when

using a container or other equipment that can be
transferred from the vehicle of one mode to the vehicle of
another mode without the contents being reloaded or
disturbed.
• Two or more modes are employed to utilize
advantages of each while minimizing their
disadvantages
– Piggyback transportation
 Intermodal Transportation

• Containers
– Large reusable steel boxes used for intermodal shipments
(Source: http//[Link]/wiki/Shipping_containers)
– Provide significant reduction in freight handling costs
– Are interchangeable among rail, truck, and water carriers
– Airfreight containers (ULDs) are designed specifically for fuselage
– Are measured by TEU’s
– Allowed for land bridge services

Advantages:
• Uses 2 or more modes to utilize the advantages of each mode while minimizing the disadvantages
• Using container or other equipment (transfer from mode to mode without reloading)
 Transportation Specialists

• Freight forwarders
– Buy space at TL (truckload) rate and sell at somewhat less than LTL rate
– Pick-up and deliver; motor carriers or railroads do line-haul
• Air forwarders
– Consolidate shipments
– Tender to airlines in containers ready for loading
– Forwarders provide retailing function
– Airline provides wholesaling function
• Shipper’s associations
– Similar to air and freight forwarders but are not-for- profit organizations
– Primarily focused on achieving the lowest rates for members
 Transportation Specialists

• Brokers
– A facilitator who brings together a buyer and seller
– May consolidate LTL shipments and then give to truckers, forwarders, or shippers’ associations
• 3PLs
– Find clients with complimentary needs to maximize equipment utilization

• Parcel carriers
– Parcels are packages weighing up to 150 pounds

– Parcel carriers are companies that specialize in transporting parcels

– Parcel carriers include:
• USPS
• UPS
• FedEx
• Greyhound Package Express
 Transportation Regulation

• Five modes are influenced by federal, state and local government regulations
– Examples:
• Mandatory retirement age for pilots in U.S.
• Placement of lighting on truck trailers
• Regulation
– Costs money
– Needs to be codified
– Is enforced by government agencies
• Level and degree of regulation varies from country to country
– i.e. industrialized countries tend to have more stringent transportation equipment emissions regulations when
compared to those of less industrialized countries
• Logisticians must understand
– Relevant transportation regulations
– Cost and service implications of regulations
 Legal Classification of Carriers

• Transportation carriers are classified as either

– For-hire
• Common
• Contract
• Exempt
– Private
• Classification is important because different levels of economic regulation are applicable to
different carriers
• Common carriers serve the general public
• Contract carriers offer specialized service to customers on a contractual basis
– No obligation to serve the general public or to treat customers on an equal basis
• Exempt carriers are exempted from economic regulation due to legislation
• Private carriers are companies whose primary business is other than transportation and provide their own
transportation service
– Also exempt from economic regulation
 Private Transportation

• Private transportation is used when firms own and operate their own trucks, railcars, barges,
ships, and/or airplanes
– Wal-Mart has largest private truck fleet in U.S.
• 7,767 tractors and 26,117 trailers
• Private trucking provides
– Improved level of customer service
– Advertising on the trucks
– May be less expensive
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