Logistics Management (Perego) by Cremaschi

Local Distribution

Distribution in urban or small geographical areas:

• Central warehouse Big Point of Sales (e.g. supermarkets)
• Regional warehouse/transit point Traditional Point of Sales

The trucks stop more than once in a delivery trip. The trucks are smaller than those used for FTL. The fixed times (loading/unloading, controls...) are comparable with the variable times of a delivery trip.

Service Providers

The road transportation can be carried out according to two main options:

• Private transportation, i.e. the carrier is also the owner of the goods shipped
• For-hire services

Low fixed costs and high variable costs result in low capital expenditure to enter the market (especially in the FTL services). Hence, there are plenty of small carriers (100,000 in Italy, 500,000 in the USA). They usually work as subcontractors of large carriers/logistic service providers offering FTL or LTL services.

Chargeable Weight

The concept of Chargeable Weight has been

Points, in which the trains are formed by joining cars going to the same destination, and sorting points, in which a train is split, and the cars go forming other trains.

Main characteristics:

• Low cost (cost per ton*km is pretty low), especially for long distances and large shipment quantities (high fixed vs low variable cost structure)
• Low accessibility: the loading/unloading points must be on the railroad (exceptionally large production or distribution facilities have rail sidings)
• Slow speed/High transit times and Low reliability: mainly due to the high and variable handling times at the consolidation stations (unit trains are an exception)
• Damage risk: variable depending on the type of service (unit train vs less than a car load)
• Efficiency: depends on infrastructure

Transport unit load: different types of cars (see next slide) depending on the freight characteristics

Handling equipment:

• to load/unload cars like forklift trucks, cranes, ...

To combine/sort cars into trains like sorting terminals with dedicated rails and handling equipment (locomotives)

Main application fields:

• Transportation of bulk raw materials (lumber, cereals, coal, etc.) and generally low-value goods for large quantities and long distances
• When time performances (both speed and reliability) are not critical
• The cost gap (between rail and road) increases for large shipments over long distances

Rail carriers have higher fixed costs than road carriers (large investment in terminals and handling equipment) and these fixed costs have a lesser impact when spread over larger ton*km.

SERVICE PROVIDERS

The railroad transportation is usually a service offered by common carriers who give a "liner service" for less than a car load and full car load shipments and also organise unit trains for large shippers (these carriers own both locomotives and cars)

Other options are:

• Contract carriers, which operate under deregulation laws,

shipments are international transportations made by big ships on:

• liner service
  • routes and frequencies are arranged in advance
  • ports and routes are chosen by the line
  • consolidation of many shipments
  • the line might offer a "door-to-door" service, taking charge also of the road transportation
  • the line is in charge of the road transportation if there are "house" conditions
• contract ad hoc services

Main application fields: thanks to its low-cost water transport is advantageous for commodities with a low value-to-weight relationship or for commodities in which transportation cost is a significant portion of the selling price, for instance:

• crude oil, refined petroleum products
• coal, grain, sand, lumber, chemicals
• low-value containerized goods

We have to also consider that in many intercontinental transportation the only viable option is air which is more expensive.

SERVICE PROVIDERS

The water transportation is usually a service offered

by:

• carriers that give a "liner service" (both coastal and transoceanic routes) - the usual choice for general cargo and containerized shipments
• carriers that provide "ad hoc" specific services for one or more shippers
• private transportation - i.e. the carrier is also the owner of the goods shipped - possible for bulk materials and oil products

6.5 Air Transportation

Main characteristics:

• Very expensive compared to the other transportation modes
• Low accessibility: the loading/unloading must take place in an airport, hence road transportation is usually needed to provide door-to-door service
• High speed/Low transit times, mainly dependent on the speed of the airport-based handling operations
• Good reliability, even though transit times are affected by weather conditions

AIRPLANE TYPES:

1. FREIGHT ONLY (All Cargo; Freighters)
   • Wide Body (es. B747 e A900): special pallet loads and special containers

B747/200F: ~ 108 t payable load; ~ 690 m3

A300/B4: ~ 41 t payable load; ~ 296 m3

optimal goods density: ~ 150 kg/m3

PASSENGERS+FREIGHT (belly only; combi):

B747/40: ~ 400 sits + ~ 13 t payable load

AIR TRANSPORT UNIT LOADS

• Specific containers to maximize the loading capacity
• Pallet (decks loaded with bulk goods covered by a metal net) 68

Main application fields: long distance (international and sometimes domestic) transportation of high-value products and/or when transit time is critical

• goods with high value-to-weight relationship
• perishable goods, such as fruits or vegetables
• fashion goods
• short life cycle products (electronic components)
• emergency transportation (spare parts for instance)

... air transportation higher costs should be traded off with lower inventory carrying costs

SERVICE PROVIDERS

• The air transportation is usually a service offered by:
• carriers that give a "liner service"

usual choice for passengers and freight airplanes, possible also for cargo-only airplanes

• carriers that provide "charter" services for one or more shippers - the usual choice for cargo-only airplanes
• carriers that provide express door-to-door service, where the air transportation is only part of the overall transportation service (typically the international express small package carriers)

6.6 Intermodal Transportation

Intermodal transportation services refer to the use of two or more carriers of different modes in the movement of a shipment, without changing the transport unit load, known as Intermodal Transportation Unit (ITU). It requires Intermodal Terminals, i.e. dedicated facilities where the ITU are transferred from one mode to the other. It leverages the best features of each transportation mode (transforming some "labour intensive" activities into "capital intensive" activities). Two main intermodal transportation modes:

• Road

+ rail (also known as piggyback)

• Road
• water (also known as fishyback)

INLAND TERMINAL

Inland terminals allow shifting from a mode of transportation to another and storing containers. It is also possible to transfer containers from a train to another (in this case, the terminal functions as "gateway")

PIGGYBACK

Definition: part of the route is made by truck, part by rail

Main characteristics:

• Door-to-door service (like the road)
• Low costs, higher than only-rail but usually lower than only-road especially for long distances
• High transit times, mainly dependent on the railroad transit times and the handling times in the intermodal terminals, and usually low reliability
• Low damage risk, ITU are never "opened" during the transportation

Handling equipment for containers:

1. Straddle carriers
2. Reach stackers
3. Gantry cranes

FISHYBACK

Definition: part of the route is made by truck, part by ship

Main characteristics:

• Door-to-door service
• (like the road)• Low costs, higher than only-water but usually lower than only-road especially for long distances
• • High transit times, mainly dependent on the water transit times (and the low frequency of manyroutes) and the handling times in the seaports
• • Low damage risk, ITU are never “opened” during the transportation

ROAD VS INTERMODAL

The application area of intermodal transportation is wider, if the origin point is located in an inlandterminal. The cost structure illustrated is only valid if the forward and return flows are balanced. The slopeof the curves heavily depends on external factors (e.g. tolls, labour and fuel costs, constraints on speedlimit and number of operating hours), especially in the road transportation case.

7.0 Logistics and B2c E-commerce

B2c e-Commerce refers to sa