Chapter 6:- Transportation
Transportation Functionality
1) Product Movement
2) Product Storage
Principles Transportation
1) Economics of scale
2) Economics of distance
Factor Influencing Transportation Costs
1) Product Related
2) Market Related
Costs Associated with Transportation
1) Movement costs: The cost of fuel to drive the vehicle of transport depends on the mode of transportation selected.
2) Inventory costs: Inventory holding costs are directly proportional to the transit (transportation) time. Longer the inventory is in transit larger are the costs. Transit capital remains blocked during transit time and unavailable for use.
3) Obsolescence: When the transit time is quite large the inventory can become redundant (waste) when it arrives at the point of use. We know that in the changed environment, product life cycles are shrinking and hence this cost becomes highly relevant.
4) Packaging: Packaging costs are dependent on the mode selected as bad road condition needs strong packaging and smooth transit does not need such packaging.
5) Insurance: This cost obviously proportional to risk of damage and loss in transit as this is the liability of carrier.
6) Theft: This cost can be eliminated by switching to options like container transport.
7) Customer Service Costs: Customer service Costs is reduced by improving information flow to forecast demand and reduce transit time by changing to faster mode of transport.
Concept Testing:-
1) Vehicle Turnaround Time:
Turnaround is an act or process of unloading and loading and servicing the vehicle for a return trip.
Vehicle turnaround time is the time need to prepare a vehicle for a return trip. Logisticians or transporters should always try to minimize the VTT.
2) Trans-Shipment:
Trans-Shipment refers to shipping products between various distribution
locations to avoid stock outs.
Inter-Model Transportation:
Intermodal transportation means multi- modal transportation. It involves using more than one mode of transportation.
1) Piggy back:-
Piggy back is a combination of rail and road. The consignment is placed on the rail car at the railway station of origin and the the consignment is transported by Railway upto the Railway station nearest to the destination. After reaching there, the consignments are placed on trailers and transported to exact destination by roadway.
TOFC- Trailer on Flat Car
COFC- Container on flat Car
2) Fishy back:-
Fishy back is a combination of water and road transport. The consignment is placed on the ship or vessel at the port of origin and then transported by waterways upto port of destination.
3) Birdy back:-
Birdy back is a combination of air and road transport. The consingnment is placed on the Airbus / Air truck / Air cargo at the airport of origin and then transported by Airways upto Airport of destination.
4) Land Bridge:-
It is a part of Inter modal logistics distribution system.
5) Mini- Land Bridges:-
Mini- land bridge (also called as mini bridge) is a special case of land bridge where foreign cargo originates or terminates at a point within the same country.
6) Micro Bridge:-
It is relatively new service being provided by ports in contrast with mini bridge. This service provides door-to-door rather than port-to-port transportation.
7) Load Planning:-
Load planning is the process of meeting the customer’s requirements with availability of vehicles & manpower & determining the transport routes & schedules accordingly.
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