TRANSPORATION

IBM 2003
LOGISTICS MANAGMENT
STUDENT NAME : ASHWANI KUMAR
STUDENT ID : 0755251
TRANSPORTATION

• TRANSPORTATION IS THE MOST IMPORTANT

ASPECT IN LOGISTICS MANAGEMENT FOR THE
MOVEMENT OF PERSONS/GOODS FROM ONE
PLACE TO ANOTHER PLACE.

• “Transportation is an essential part of supply

chain and logistics management as it is vital
node for procurement of raw material,
material supply to manufacturing hub,
connecting the various networks at
distribution channels with finished goods and
delivery of the goods and services to the
consumers”
Importance of
Transportation
• Transportation involves the physical
movement of goods between origin and
destination points.

• The transportation system links

geographically separated partners and
facilities in a company’s supply.

• Transportation facilitates the creation of

time and place utility in the supply chain.

• Transportation also has a major economic

impact on the financial performance of
businesses.
Transportation
Involver's
• Mode of Transport or
Equipment's : Trucks, Rail,
Plane, Car, Pipelines and ships
and Cranes
• People : Driver, Passengers,
Workforce-Loader, Unloader
• Route : Highways, Sea, Rail
Track, Air
• Decisions: Routing, Timing,
Quantities, Equipment's and
Mode of Transport
Transportation Functionality

Product Movement Product Storage

Transport move products from one point to A less common transportation function is temporary
another(Manufacturing unit to Consumer). storage. Vehicles make rather expensive storage facilities.
Products can be classified as Material, However, if the in-transit product requires storage but will
Components, Work-In-Progress, or Finished be moved again shortly (e.g., in a few days), the cost of
Goods). The main objective is transfer goods unloading and reloading the product in a warehouse may
from a origin point to a designated destination exceed the profitability. A second method to achieve
while reducing time, resources, and temporary product storage is diversion. This occurs when
environmental effects with less damage and cost an original shipment destination is changed while the
to meet consumer demands for on time delivery delivery is in transit and various technology helps in this
efficiency and shipping details. diversion of saving cost.
 Transportation Participant

• Transport Participant are the entities those are involved in the overall
transportation in logistics and supply chain management. They are classified as
• Shipper : can be classified the manufacturer or exporter who produce the
goods or services.
• Consignee (Receiver) : A person or client who receive the goods or services who
owns the financial cost and can be define as a customer, client or importer.
• Carrier & Agents : The entities who are engage and formalize the movement of
goods and services.
• Government : The entity which control and govern the rules for the safety of
goods, person and environment.
• Internet : Functionality that helps in building the communication between all
the stakeholders to establish a smooth channel in the movement of goods or
services.
• Public : includes all the people or general public who has special transportation
needs and create demands for the transportation
 The mode of transport defines the ways goods and people
will be transported or moved from one place to another
Transport Model place. Different modes of transportation can carry both
passengers and goods as per the specific needs.
 • Five Basic Transportation Mode
• Marine/Water
Transport • Air Transportation
Model • Rail Transportation
• Road Transportation
• Pipeline Transportation
Marine/Water Transportation
This mode of transport includes cargo carrying commercial shipping and
non-cargo commercial shipping of goods and people by sea and other
waterways like ferries, cruise ships etc.

Marine Transportation might be for trade, entertainment, or for military

purposes and can be realized over any distance by boat, ship, sailboat, or
barge, over oceans and lakes, through canals or along rivers.

Types of Vessels
• Container Ships
• Heavy Vessels
• Refrigerated Cargo
• Ro-RO-Vessels
• Recreation Vessels
• Constructions and Infrastructure Vessels
• Naval Ships
 Type of Vessels

• Container Ships :To provide trading flexibility they

are fitted for the carriage of containers and grains. Ship for
the transport of large quantities of cargos and passengers.
The possible cargo can be manufactured goods, heavy
equipment, vehicles, machinery, bagged goods, steel and
food products, and containers

• Heavy Vessels : Heavy Cargo Vessel also classified as

Heavy Lifting Vessels and (HLVs) are huge vessels capable of
carrying other small ships, large industrial equipment’s unit,
floating commercial plants etc. They carry cargo that other
types of ships or vessel cannot transport. They can be
subdivided into four main categories: project cargo ships,
open deck cargo ships, dock ships, and semi-submersible
ships.
 RO-RO-Vessels Refrigerated Cargo- LPG/LNG Refrigerated Cargo

• Refrigerated Cargo : These ships are basically fast general

cargo ships with extensive refrigerated spaces for the
transport of natural gases, petroleum gas, meat, fruit, and
dairy products.
Type of Vessels • RO-RO-Vessels : These are cargo ships/vessels designed
to carry wheeled cargo such as automobiles, trailers or
railway carriages, Car and Passengers.
 Types of Vessels
• Recreation Vessels : These are cruise ships can be classified as
passenger ships used for pleasure voyages and Used for making
luxurious holiday trips to distance countries and ports.

• Constructions and Infrastructure Vessels : These ships

are used to built ports and harbor fronts and other constructions
activity in the marine. A dredger (sometimes also called a dredge) is a
ship used to Used to evacuate Sand, Gravel & Mud(Port) in shallow
seas or freshwater areas with the purpose of gathering up bottom
sediments and disposing of them at a different location.

• Naval Ships : Specifically designed for defense services. This

Watercraft capable of independent operation underwater -hard to
detect -very popular in navies
 Rail Transport

Rail transport is also classified as Travel by

Train. In track-run vehicles (rails or railroads) it
is a mode of travel. It is one of the most
common, commonly used, and very cost-
effective modes of long-distance and short-
distance commuting and goods and passenger
transport. Compared to other transport
systems, rail transport has emerged as one of
the most efficient modes of transport, trains
are fast and least influenced by normal weather
turbulences like rain or fog.
 TYPES OF RAIL BENEFITS OF RAIL
TRANSPORT TRANSPORTATION
• Haulage – Push-Pull/Railroad
car There are following benefits of rail transportation
such as;
• Motive power – Diesel,
Electric locomotive Trains • Trustworthy schedules and transit times.
• Passenger trains – High speed • Most efficient form of land transportation.
intercity trains, sleeping cars, • Over long distance fast and cost-effective.
Street Cars, Monorails. • The safety record of rail is strong.
• Freight train – Freight Cars,
Box Cars, Wagons, Heavy • It helps in alleviating road congestion.
Hauls, Double Stack Container
trains.
 ROAD Transport
Road transport can be classified as either carrying
goods and materials or carrying people from one
place to another place. The key benefit of road
transport is that it can enable goods and services
to be transported door-to - door and can offer a
very cost-effective way of hauling, loading and
unloading. The Road Transport can be Public and
Private owned subsidiaries

There is various mode of transport that

uses road infrastructure
Bicycle, Motorcycle, Cars – Electric,
Diesel & Petrol
Buses – Electric & Diesel, Street Cars -
Electric
Trucks & Vans, Commercial cranes and
equipment’s like forklifts, trailers etc.
 BENEFITS OF ROAD
TRANSPORTATION:
There are following benefits of road transportation such
as;
• Planned and quick delivery.
• Cost-effective as per other mode of transport.
• Deliveries in local, over the border, even in rural areas.
• Flexible Service
• Compared to other modes of transportation this mode
saves the packing cost.
• Complete door to door service and more economical.
Air Transport
Air Transportation represents the
fastest mode of transportation to
ship passengers and most type of
CARGO Airlines PASSENGER Airlines cargos over long distance.
 Integrated express  Boeing The Air Transportation can be
operators Airbus  Airbus categorized into two categories.
 ALL-Cargo Airlines  Dreamliner
Cargo Airlines
 Commercial Service  Charter
Passenger Airlines  Business & Private Jet Passenger Airlines
 AD-Hoc Charter Air
Cargo
BENEFITS OF AIR
There are following benefits of
TRANSPORTATION: air transportation such as;

1.Quick transit & less handling

of cargo.
2.Less documentation.
3.Reliable departures and
arrival.
4.For cargo enhanced level of
security.
PIPELINE Transport
Transportation of pipelines is a mode of transportation using metal pipe as a transportation
system for transportation of liquid like crude oil and gas resources in long distances, a mode
of transportation that moves gasoline, coal and chemical commodities from the place of
origin to the consumer, is a specific part of the transportation of trunks in a single
transportation network.
Pipeline Transportation can be classified as
Liquid Pipelines - Crude Oil Transportation:
Liquid pipelines carry gas crude oil or natural gas
in liquid form to refineries where they undergo
distillation and other production processes.
Natural Gas Pipelines - Gas Transportation:
Natural gas pipelines are used primarily for
delivery of natural gas to manufacturing plants
and for storage and distribution purposes.
 BENEFITS OF
PIPELINE TRASNPORT

• Pipeline transportation with less energy

consumption, low cost and good benefits.
• Pipeline transportation safe and reliable and
Environmentally friendly.
• Pipeline Transport can manage Large
volume up to 100 millions tons.
• Fast and Less space
 Crisis management is an
CRISIS MANAGEMENT organization level strategies
that is particularly designed to
help an organization deal with
any unforeseen or sudden even
that has significant negative
event. The process of handling
unexpected and sudden
changes in organization culture
is called as crisis management.
Why Crisis Management?
•“Crisis management is absolutely essential in order
for a company or organization to properly, effectively,
and strategically address and put a crisis behind them
and return to normal as quickly as possible.”
•– Edward Segal, author of Crisis Ahead: 101 Ways to
Prepare for and Bounce Back from Disasters, Scandals,
and Other Emergencies.

Type of Crisis

1) Natural Disaster
2) Financial Crises
3) Manmade Crises
4) Technological failure and Breakdown
 Crisis
Managment
• Determine or Identify the problem and the root causes that
contributed to the crisis.
• Discuss the issues or problem and areas of concern amongst the stake
holders in an open forum for everyone to share their opinion.
• Make sure all the relevant and accurate information is collated in
regard to crises. Don’t depend on guess works and assumptions.
Double check your information before submitting the final plan.
• Crisis Management Plan should not only focus on ways to overcome
crisis but also on making the processes foolproof to avoid emergency
situations in future.
• Implement the plan and Monitor the outcome.
• Measure the results and map the crisis performance
 TRANSPORATION
OPERATION MANAGMENT
Transportation Operation Management is
the management of all the activities those
are associated with identifying , planning,
execution and administrative responsibility
of the transport operations. TMS (Transport
Management System) is an integral part of
Transport Operation as it helps organization
to identify and evaluates transportation
strategies to assess the best method of
shipment for a particular product ensuring
on-time delivery with minimum cost.
 TMS functionality is comprises
of five capabilities as

1. Operations
2. Consolidation
3. Negotiation
TMS 4. Control
5. Payment, Auditing and
Functionality Claims administration.
 Operations
In operations standpoint, TMS work performance includes the activities like equipment scheduling, Yard
Management, Load Planning, Shipment routing, Track and Trace.
Equipment Scheduling and YMS is an important part of the TMS as it helps in
a) Reducing the Waiting time in loading and unloading
b) YMS with WMS helps in identifying the equipment is available at right location with the trailer and
truck information to stimulate the loading and unloading quickly.
c) The operation management helps in preventing the delay or sudden cost of maintenance or regular
routine maintenance to avoid any disruption in the services.
d) It helps in time saving and promotes Drop-and-Hook arrangement wherein the trailer does not
have to wait for loaded trailer as driver can immediately get the loaded trailer as soon as he parks
the loaded trailer and direct to the next destination with the new trailer.
e) TMS helps in identifying most effective and convenient routes planning for cost based on the
variety of constraints such as delivery appointments, preferred road type can be dynamic or static
with projected traffic conditions etc.
f) This helps in making transparency at all the level and helps shipper to track the shipment on the
real time basis as well as the receiver or consumer can have the Advance Shipment Notification to
be aware the real time shipment status, delays and driver performance as well.
g) This can provide analysis on fuel and cost to plan and control the most factors those effects the
Consolidation

• The cost optimization can be achieved with the shipment

size and associated routes planning with less dwelling time
for on time delivery to meet the consumer demand and
needs. The consolidation of freight

• Freight Consolidation Techniques includes

• Reactive approach
• Proactive approach
Reactive Consolidation

Does not attempt to influence the composition and

timing of transportation movements.
Seeks to combine freight into larger shipments for
line-haul movements.
Can be achieved by three ways:
(1) Market area,
(2) Scheduled delivery,
(3) Pooled delivery.
 Reactive Consolidation…..cntd
Market Area:
• Consolidation for a specific market area.
• Volume deficiency for an area can be addressed by:
 Intermediate break-bulk point for line-haul transportation savings;
 Consolidated shipments on specific days;
 Small shipments by 3rd party logistic providers
Freight Consolidation Scheduled Delivery:
 Shipments to specific markets on selected days each week.
 The plan is communicated to customers in order to manage their expectations.
Pooled Delivery:
 Freight forwarder, public warehouse, or transportation company arranges consolidation for
multiple shippers serving the same geographical market area.
 Proactive Consolidation
To achieve responsive logistics by active participation of shippers, carriers,
and consignees to realize consolidation savings. Requires Preorder Planning,
and Multi-firm Consolidation.

Proactive Consolidation can be achieved by

Pre-order Planning :
This considers the quantity and timings of orders to facilitate consolidated
freight movements.
Multi Vendor Consolidation:
This approach defines the consolidation of two or more vendors whose
freight characteristics can be combined to create an efficiency in the overall
operation management.
 Negotiation
Negotiation is a strategy obtained by the transport department of any organization
to get the lowest possible rates with the consistent services. The main objective of
negotiation to gain success by both the parties, shipper and carriers those involves
into negotiation arrangements by win-win situation for productivity gains. Once the
negotiation are done on price and rates, the TMS system is updated with the rates
and services to provide optimal solution and cost benefits on the services.

Control
TMS helps organization in controlling the various aspect of operation management. This helps to
control and monitor the regulation enforced by the transport industry to ensure compliance are met
and being followed diligently.

Payment, Auditing and Claims Administration

TMS also helps in facilitating the backend work of an organization regarding
payment and invoice tracking of carriers to ensure the invoices are billed as per the
agreed terms and conditions. Also, audits can be performed with the TMS that is
equipped with the real time data available in the system. Pre-audit can be
performed on the freight invoices to check the accuracy and reliability of the
services. The claims can be identified, and it helps in assist with freight payment,
audit and claims administration
Product Pricing &
Transportation
Pricing is an important aspect of any
business that relates to product or services.
The pricing strategy defines that which party
is responsible for performing the logistic
services, passage of title and liability.
Product pricing and Transportation has 2
common methods as

(1) FOB Pricing

(2) Delivered Pricing
FOB Pricing
The FOB pricing can be referred as Free On Board or
Freight on Board. Its is the simplest way of quoting the
prices as the seller indicates the price at the origin port
or point and manage the shipment until loading the
cargo and after loading assumes the responsibility of
the buyer for the remainder of the transport. The buyer
opt the transport mode, carrier and pays transportation
charges and assume the risks after loading the
shipment.
FOB Destination pricing on the other side, product
ownership does not transfer until the delivery is
completed. The title of goods remain associated with
seller only until it reaches the destination as specified by
the buyers. In this arrangement, seller do all the
arrangement on behalf of buyers and include everything
in the sale invoice.
Delivered Pricing
The Delivered Pricing can be referred as an
arrangements where seller establish the price that
include the transportation cost. The transportation cost
does not reflect separately as it is in FOB. These can be
arranged as per three methods
a) Single Zone delivered pricing : An average cost
decided by the buyers to pay a single cost
irrespective of the location
b) Multi Zone delivered pricing : It includes different
prices for specific geographic zones and quotes are
decided as per the distance.
c) Base point pricing : This arrangement is done by the
product’s list price plus transpiration cost from a
designated base point, usually the manufacturing
locations.
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Crisis Management
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