Transportation
MS Tăng Minh Hưởng
Transportation, which can be defined as the actual, physical movement of goods and people
between two points, is pivotal to the successful operation of any supply chain because it carries the
goods, literally, as they move along the chain. Transportation influences, or is influenced by, the
logistics activities discussed in previous chapters. These include:
1. Transportation costs are directly affected by the location of the firm’s plants, warehouses, vendors,
retail locations, and customers.
2. Inventory requirements are influenced by the mode of transport used. High-speed, high-priced
transportation systems require smaller amounts of inventories in a logistics system, whereas slower,
less-expensive transportation requires larger amounts of systemwide inventory.
3. The transport mode selected influences the packaging required, and carrier classification rules
dictate package choice.
4. The type of carrier used dictates a manufacturing plant’s materials handling equipment, such as
loading and unloading equipment and the design of the receiving and shipping docks.
5. An order-management philosophy that encourages maximum consolidation of shipments
between common points enables a company to give larger shipments to its carriers and take
advantage of volume discounts.
6. Customer service goals influence the type and quality of carrier and carrier service selected by the
seller.
COMAPARING AND CONTRASTING
TRANSPORTATION INFRASTRUCTURE
Table 12.1, indicate wide disparities in the
various infrastructures; at a minimum, a
lack of infrastructure makes it difficult to
use that mode in domestic (within-country)
transportation. The relevant infrastructure
statistic for air transportation in Table 12.1
is the number of paved runways over 3,047
meters (approximately 10,000 feet). This
length is significant because a 10,000- foot
runway has generally been viewed as
adequate for accommodating the largest
existing widebody aircraft; wide-body
aircraft are essential to long-haul
international movements of both freight
and passengers.
TRANSPORTATION MODES
Each of the five modes of transportation exists because of certain attributes
that provide one or more advantages over the other modes of transportation.
The attractiveness of a particular mode depends on the following attributes:
• Cost (price that a carrier charges to transport a shipment)
• Speed (elapsed transit time from pickup to delivery)
• Reliability (consistency of delivery)
• Capability (amount of different types of product that can be transported)
• Capacity (volume that can be carried at one time)
• Flexibility (ability to deliver the product to the customer)
Airfreight
When one thinks of air transportation, one
immediately thinks of speed, particularly on the
line-haul (terminal-to-terminal movement of
freight or passengers); modern jet aircraft are
capable of traveling between 500 and 600 miles
per hour, a speed that far exceeds any other
form of transportation. Indeed, air is generally
the fastest mode of transportation for shipments
exceeding 600 miles although some motor
carriers now offer overnight service of between
600 and 700 miles. However, air transportation
is a quite expensive form of transportation, and
the line-haul cost of airfreight service is
regarded as its primary disadvantage;
Airfreight
Unlike other forms of transportation, the great majority of airfreight is
carried in the freight compartments of passenger airplanes (so called
belly freight). This belly freight limits the capacity available for air
shipments and is particularly problematic with respect to narrow-body
(single-aisle) aircraft. For example, a United Airlines narrow-body
Boeing 737-900 offers approximately 1,825 cubic feet of belly space,
whereas a United Airlines wide-body Boeing 777-200 offers
approximately 6,925 cubic feet of belly space.3 However, wide-body
aircraft devoted to all-cargo service have impressive carrying capacity;
the latest version of an all-cargo Boeing 747 can carry approximately 155
tons of freight.
Airfreight
The cost, speed, and capacity attributes mean that, for the most part, airfreight is best suited to high-value,
lower-volume products that are of a perishable nature or otherwise require urgent or time-specific delivery.
Examples of products that move by air include:
• Auto parts and accessories
• Cut flowers and nursery stock
• Electronic or electrical equipment, such as cell phones and iPods
• Fruits and vegetables
• Machinery and parts
• Metal products
• Photographic equipment, parts, and film
• Printed matter
• Wearing apparel
The reliability of airfreight is somewhat problematic.
Motor Carriers
The most important business user of the
highway system is the motor carrier (trucking)
industry. One way of classifying motor carriers
is according to whether they carry less-than-
truckload (LTL) or truckload (TL) traffic.
Less-than-truckload (LTL) shipments range from
about 150 to 10,000 pounds; they are often too
big to be handled manually, yet they do not fill
an entire truck. Trucks that carry LTL freight
have space for and plan to carry shipments of
many other customers simultaneously. Unlike
TL carriers, LTL carriers operate through a
system of terminals (a facility where freight is
shifted between vehicles),
Motor Carriers
Truckload (TL) carriers focus on shipments of greater than 10,000
pounds, and although the exact weight depends on the product, it is
close to the amount that would physically fill a truck trailer. For
glassware, this might be 18,000 pounds; for canned goods, it might be
40,000 pounds. Although TL traffic may involve only one customer, it is
possible that large shipments (greater than 10,000 pounds) from several
customers can be consolidated into a truckload shipment. Whereas LTL
shipments are routed through terminals, TL shipments tend to move
directly from the shipper’s location to the consignee’s location.
Prominent TL carriers include J.B. Hunt, Schneider National, Swift
Transportation, and Werner Enterprises
Motor Carriers
Without question, the primary advantage for motor carriers is
flexibility, or the ability to deliver the product to the customer (or
where the customer has relatively easy access to it). For example, if you
bought this textbook at your university’s bookstore, this book was
delivered there by some type of motor carrier, perhaps an LTL carrier.
If you bought this textbook from an online site, then it was most likely
delivered to your residence by a truck, perhaps a small package truck.
Indeed, a longtime slogan of the American Trucking Associations (a
trade group that represents motor carrier interests) was, “If you have it,
it moved by truck.”
Motor Carriers
As was the case with airfreight, weather
considerations also affect the reliability of motor
carrier delivery, and relevant weather
considerations include ice, fog, snow, flooding,
and high winds (which can affect bridge
crossings). The reliability of motor carrier
service is also affected by highway congestion,
which is caused by increased travel demand,
weather, roadway incidents (e.g., disabled
vehicle, accident), and construction. Highway
congestion tends to be most severe in major
metropolitan areas and is not likely to be
alleviated by additional highway construction.
Rather, technology-based approaches, such as
intelligent transportation systems and computer
routing software that factors in congestion, are
being used to deal with road congestion.
Pipelines
Pipelines are a unique mode of transportation
because it is the only one without vehicles, and
this is significant for several reasons. First, there
is no need for vehicle operators, an important
consideration given that some vehicle operators,
such as airplane pilots and ship captains, can
achieve annual compensation in excess of
$200,000. In addition, vehicle operators
sometimes engage in work stoppages (e.g.,
strikes) and can be the cause of accidents. The
lack of vehicles also means that pipeline
transportation is one way; other modes have
two-way transportation, a fronthaul and a
backhaul. The backhaul is often a significant
source of excess capacity, or unused available
space.
Pipelines
Pipelines’ lack of vehicles means that it is the most reliable form of
transportation in part because there aren’t vehicle-related disruptions
(such as accidents), and pipelines are virtually unaffected by adverse
weather conditions.
From a capability perspective, pipelines are quite limited in the sense that
products must be liquid, liquefiable, or gaseous in nature.
Slurry systems allow bulk commodities to become liquefiable by grinding
the solid material to a certain particle size, mixing it with a liquid to form
a fluid muddy substance, pumping that substance through a pipeline, and
then decanting the liquid and removing it, leaving the solid material.
Railroads
Although more than 550 freight railroads
operate in the United States, over 90
percent of the rail industry’s revenues and
ton-miles are accounted for by the seven
Class I (2015 revenues of approximately
$450 million) freight railroads. Moreover,
the U.S. railroad industry is dominated by
four freight carriers, the Burlington
Northern (BN), CSX, Norfolk Southern
(NS), and Union Pacific (UP); the BN and
UP dominate rail freight transportation
west of the Mississippi River, whereas CSX
and NS have a similar position east of the
Mississippi River
Railroads
This level of market concentration and domination is not found in the
other modes, and from a practical perspective it can create limited
service and pricing options for potential customers. One possible
manifestation of limited service options might be seen in the railroads’
rather uneven reliability in recent years, some of which can be linked to
adverse weather conditions.
U.S. freight railroads present an intriguing paradox in the sense that
they are not either the “best” or “worst” on any of the six attributes
(capability, capacity, cost, flexibility, reliability, speed) that we’re using
as a basis of comparison for the five transport modes.
Railroads
Overall, railroads are superior to air, motor, and pipeline, but inferior
to water, in terms of their ability to transport different kinds of
products. Similarly, rails possess less flexibility (ability to deliver the
product to the customer) than motor carriers.
In terms of the volume that can be carried at any one time (capacity),
rails are superior to air and motor, but not as good as pipeline or water.
Although railroads are less expensive than air and motor, they are
more expensive than pipeline and water. Alternatively, railroads are
faster than both pipeline and water, but slower than air and truck
Water
Freight moves by water on the
Great Lakes, using vessels called
lake freighters (lakers), as well as on
inland waterways, using barges.
Waterborne commerce also moves
via oceangoing vessels between the
mainland states (Lower 48) and
Alaska, Hawaii, and Puerto Rico.
Inland waterways, primarily rivers,
which are dredged to a depth of
nine feet—the minimum depth
required for most barges.
Water
Drought creates problems because when water levels
drop below acceptable levels, barges are forced to
reduce their loads, or barge traffic might be halted
altogether, situations that require alternate means of
transportation.
The waterways’ lock system (a lock raises or lowers
barges so they can meet the river’s level as they move
upstream or downstream) also contributes to
transport unreliability. Many locks on the U.S. inland
waterway system are quite old, with some locks
dating to the 1930s, and their maintenance needs tend
to increase as a function of age. With preventive
maintenance of locks currently the exception rather
than the rule, when a lock malfunctions the related
repairs can take months to complete—a situation with
potentially adverse consequences for shippers and
barge operators
Water
Inland water transportation in
the United States is also
characterized by slow average
speeds of approximately six
miles per hour.
In terms of positive attributes,
inland water transportation is
relatively inexpensive to users.
Water
Although inland water carriers tend to
focus on lower-value bulk commodities
that can be handled by mechanical means
such as pumps, scoops, and conveyors,
many different kinds of products can be
carried. The predominant commodity
moved by barge is petroleum and
petroleum-related products, followed by
coal. Other products that move extensively
in the inland waterway system include
food and farm products, industrial
chemicals, and minerals and stone. And, as
pointed out in the previous section, inland
water carriers can carry much greater
volumes than can rail and truck.
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. With intermodal transportation, two
or more modes work closely together in an
attempt to utilize the advantages of each mode
while at the same time minimizing their
disadvantages. For example, a company might
use piggyback transportation, that is, either
truck trailer-on-flatcar or container-on-flatcar,
to take advantage of rail’s low transportation
costs on the line-haul along with truck’s ability
to provide door-to-door service
INTERMODAl TRANSPORTATION
As evident in our defintion, the container is an important type of
equipment in intermodal transportation. Containers are moved by
mechanical devices such as container cranes, and companies need only
handle a container and not the freight inside it—thus providing a
dramatic reduction in freight handling costs.
Because the container is interchangeable among rail, truck, and water
carriers, containers can be used in intermodal applications and provide
the advantages offered by each of several modes. Both ocean carriers and
railroads have developed methods of handling multiple containers at one
time, thereby reducing the number of individual lifting and storage
moves.
INTERMODAl TRANSPORTATION
As evident in our defintion, the container is an important type of equipment in intermodal
transportation. Containers are moved by mechanical devices such as container cranes, and
companies need only handle a container and not the freight inside it—thus providing a
dramatic reduction in freight handling costs.
Because the container is interchangeable among rail, truck, and water carriers, containers can
be used in intermodal applications and provide the advantages offered by each of several
modes. Both ocean carriers and railroads have developed methods of handling multiple
containers at one time, thereby reducing the number of individual lifting and storage moves.
Containers are generally 8 feet wide, 8 feet high, and between 10 and 53 feet long. Most
containers are dry-cargo boxes, although some are insulated and come with temperature-
controlling devices. Specialized intermodal containers are also available that carry tanks for
holding liquids or gases as well as containers that hold insulated or refrigerated cargo. Figure
12.1 shows several different types of containers.
INTERMODAl TRANSPORTATION
INTERMODAl TRANSPORTATION
Air freight containers, often referred to
as unit load devices (ULDs), are
constructed of lightweight metals and
come in different sizes. Unlike the
containers in Figure 12.1, air freight
ULDs have somewhat irregular shapes,
dictated by the contours of the fuselage
into which they must fit.
Although intermodal containers can
range between 10 and 53 feet in length,
a commonly used metric is twenty-foot
equivalent unit (TEU), which stands for
20-foot equivalent unit.
INTERMODAl TRANSPORTATION
Not only did the container
revolutionize freight handling, it
also spurred cooperation between
various modes to develop more
effective and efficient transport
offerings, such as land bridge
services. Rather than all water
service between two ports, land
bridge services involve the use of
surface transportation—usually rail
transportation—between the origin
and destination port.