Freight Transportation
Lecture 4
1
“When roads are built, development
follows…”
-Chinese Proverb
2
Freight Transport
• Freight transportation plays a key role in
today’s economies as it allows production
and consumption to take place at locations
that are several hundreds or thousands of
kilometres away from each other.
3
Role and Importance of Freight Transport
• The various roles played by transportation services
in freight movement include the following:
1. Movement of goods and services
physically along the logistics chain
2. helps achieve Time (When) and
Place (Where) Utilities and supports Form
Utilities
3. Product storage - transport vehicles can be
used for storage at shipment origin or
destination
4. Help build strong brand image through
vehicle branding and marketing
5. Facilitates customer
timely delivery satisfaction
of goods and services 4
Method of Selection
Operational
Factors
Transpor cost and
Consignment
factors t mode service
requirements
choice
Transport
mode
characteristics
5
General Objectives for Mode Selection
The objective is to ensure that the goods are delivered
safely and on time to the customer.
General qualities guiding choice of carrier
include:
• Speed of delivery
• Certainty of timing
• Freedom from interruption
• Avoidance of damage
• Avoidance of loss through pilferage
• Quality and/or impact of ancillary services - for eg.
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loading and discharging, quality control, etc
Transport Mode Characteristics
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Available Modes and Characteristics
• The following are the key existing
transport modes:
– Sea transport (Maritime)
– Road Transport
– Rail Transport
– Air Transport
– Inland Water Transport
– Pipeline
8
Sea Transport
This refers to movement of goods and services by the sea/ocean.
Main characteristics:
• Best for dry and bulky items—for eg. steel or oil
• Relatively less expensive
• Has high fixed cost but low variable cost
• Slow mode of transport
• Bad for perishable or time sensitive goods
• Limited to water routes
• Most efficient hauler for fuel consumption
• Very few accidents
• There is generally flexibility in choice due to existence of many ports around
the world and number of alternative ships
Mostly used for cargo consolidation, high volume, heavy weight and
relatively
low cost freight. 9
Sea Transport - Continued
Advantages Disadvantages
Large volumes of cargo can be
transported in one ship on Ships are relatively slow
one voyage
Cheapest method of transport Ports suffer from congestions
Flexible particularly following Not all ports are well equipped and
containerisation some have draught restrictions
Similarity in infrastructure and Port practices generally need
superstructure improving
10
Road
Transport
This refers to movement of goods and services by the road.
It is the most dominant mode of transportation in the logistics
chain.
Main characteristics:
– Can move small to medium volume of goods due to
capacity constraints
– Widely available
– Widely accessible
– Has low fixed cost but high variable cost
– Moderate to high speed
– Faster transit time
– High flexibility in choice due to high availability
–High throughput and modal integration with other modes
Mostly used for break-bulk cargo, small to medium volume,
variable cost and weight.
11
Road Transport - Continued
Advantages Disadvantages
Any dwelling or work place can be Size of the load is restricted by vehicle
serviced by road. (Last mile service) size and legislation
Less pilferage of goods Unsuitability for long distances
Distance travelled determined by
Routes can be changed at short notice
driver’s working hours and legislation
Terminals are less expensive Speed circumscribed by law
Relatively cheaper than competing Roads are may be congested during
transport means peak periods
Greater control of delivery locations- Restrictions on heavy vehicles in
flexible certain localities
Less capital cost Land severance and emissions
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Rail Transport
• This refers to movement of
goods and services by the rail
(tracks).
• Main characteristics:
– Can move great volumes of
freight
– Generally less expensive as
compared to road
– Generally less faster
– Dependent on other modes for
completion of delivery, especially
road
– High fixed costs, relatively less
variable costs
– Allows for easy unitization of
freight
– Low accessibility
• Mostly 13
freight. used for cargo consolidation,
high volume, heavy weight and low cost
Rail Transport Continued
Advantages Disadvantages
Large volumes of cargo can be Investment in infrastructure and
transported on one voyage maintenance is expensive
May be cheaper than other modes Is limited in volumes it can
(except sea) transport
Network construction has major
Can carry different loads
impact on the environment
Operating practices need
Can link with other transport modes
improving
Most efficient mechanized land transport Rigid routing destinations—
(Up to 50-70% less energy to transport a
inflexible
given tonnage of freight than road transport )
Multiple handlings of goods—
Very safe
leads to delays
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Air Transport
This refers to movement of goods
and services by air.
Main characteristics:
– Limited in volume and weight it can
carry
– Highly expensive carrying cost in relation
to some other modes such as road and
rail
– fastest mode
– It is dependent on other modes for
completion of delivery, especially road
– High fixed costs, relatively high variable
costs
– Medium to high accessibility
Mostly used for cargo consolidation,
volume, low weight, high cost freight. 15
low
Air Transport Continued…
Advantages Disadvantages
Inflexible - aeroplanes have to land
Speed of delivery - best for time
and take off in an airport which
sensitive items and defined deadlines
may be away from final
destinations.
Has a good safety record Aeroplanes are noisy
Employs highly trained Expensive when compared to other
professionals transport types.
More effective where the goods Terminals very expensive to
are high value and time sensitive construct and maintain
Not for large bulky items
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Inland Water Transport
This refers to movement of goods
and services by inland water bodies.
Main characteristics:
– Can move medium to high volume
of goods
– Low cost alternative to road
transport
– Low accessibility
– No right of way
– Long transit times
– Allows for roll-on-roll-off
(RORO)
– Low speed
Mostly used for cargo consolidation,
high volume,
relatively heavy
low cost weight and
freight. 17
Pipeline Transport
This refers to movement of freight by the pipeline.
This mode is primarily used for liquid or gaseous
‘freight’.
Main Characteristics:
– Can move great volumes of liquid freight
– Own right of way
– Not suitable for general transport
– Less expensive in relation to other modal
options
– Low fixed costs, relatively less variable
costs
– Security and safety problems
– Low accessibility
Mostly used for cargo consolidation, variable
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volume and variable cost freight
Pipeline Transport - Continued
Advantages Disadvantages
Energy consumption is least in pipeline The most obvious disadvantage lies in
transportation the fact that this means cannot be
Cost of transportation is least, for used for transportation of all solids,
large volumes and over long heavy equipment, etc
leads
Pipeline transportation is highly
environment friendly The initial costs of laying the pipeline
Safety is an intrinsic feature of pipeline are very high
transportation
Increase/decrease of transportation
volume can be effected in pipelines Prone to sabotage in disturbed areas
with lower time delay, disturbance and
cost
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Modal Choice Matrix
DISTANCE
SIZE OF
ORDER / LOAD
Short Medium Long Very Long
100T Road Road/rail Rail/sea Sea
20T Road Road Road/rail Rail/Sea
Pallet Road Road Road/rail Air/sea
Parcel Post/Road Post/road/air Post/ Road/air Post/air
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Multimodal transportation
• It involves the transportation of freight using
multiple modes of transportation (rail, ship,
and truck), without any handling of the freight
itself when changing modes.
• The method reduces cargo handling, and so
improves security, reduces damage and loss,
and allows freight to be transported faster.
• One carrier is usually responsible for cargo
through all the modes of transport to be used.
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Multimodal transportation
The most frequent intermodal services are:
• Air–truck (birdy-back) transportation
• Train–truck (piggy-back) transportation
• Ship–truck (fishy-back) transportation
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Multimodal transportation
• Containers are the most common
load units in multi-modal
transport and can be moved in
two ways:
1. Containers are loaded on a
truck and the truck is then
loaded onto a train, a ship or
an airplane (trailer-on-flatcar);
2. Containers are loaded
directly on a train, a ship or
an airplane (container-on-
flatcar). 23