Modes of Transportation in Supply Chain Trey Lynn

Modes of Transportation in Supply Chain Trey Lynn Brigham Young University BusM 361 Professor
Agenda Transportation defined Brainstorming Modes of transportation Strengths and weaknesses of each mode Pricing
Transportation means of conveyance or travel (of goods and services) from one place to
Brainstorming What types of products require transportation in your organization? How far are these
Modes of Transportation Motor Air Rail Water Pipeline Intermodal
Motor (Trucking) 1970’s – economic deregulation of interstate traffic Lower costs Accessibility Small, frequent
Trucking Disadvantages Speed Capacity Range
Air Premium transportation Speed delivery Range
Air Disadvantages Price Non-direct points Add-on charges Necessary?
Rail Lowest overall cost per unit weight Consistent time schedule Recommended with most commodity
Rail Disadvantages Inflexibility Potential damage of goods Ineffective with small shipments
Water (Ships) Large volumes Long distances Slower than air travel Limited access
Pipeline Transport of homogeneous materials Lower transportation costs than other modes Higher initial costs
Intermodal Use of various transportation modes Containers More popular due to globalization
Pricing Handling characteristics Distance freight is moved Weight of freight Costs inversely related to
United Parcel Service Small package shipper Business built around transportation Effective intermodal transportation
UPS - Methods Trucks Small, frequent shipments Deliver directly to homes and businesses Air
UPS - Methods Rail Transcontinental distances Used primarily in intermodal transport Sea Door to
UPS Provides expertise as a resource to businesses http://www.ups-scs.com/transportation/
Exercise Take ideas from brainstorming and decide which modes of transportation would be best
Summary Each mode of transportation has its own strengths and weaknesses The effectiveness of
Bibliography Cavinato, Joseph L, Ralph G Kauffman. The Purchasing Handbook. The McGraw-Hill Companies, 2002,
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>Modes of Transportation in Supply Chain Trey Lynn Brigham Young University BusM 361 Professor Modes of Transportation in Supply Chain Trey Lynn Brigham Young University BusM 361 Professor S. Tom Foster

>Agenda Transportation defined Brainstorming Modes of transportation Strengths and weaknesses of each mode Pricing Agenda Transportation defined Brainstorming Modes of transportation Strengths and weaknesses of each mode Pricing UPS example Exercise Summary

>Transportation means of conveyance or travel (of goods and services) from one place to Transportation means of conveyance or travel (of goods and services) from one place to another

>Brainstorming What types of products require transportation in your organization? How far are these Brainstorming What types of products require transportation in your organization? How far are these products required to travel? How important is the speed of delivery for these products?

>Modes of Transportation Motor Air Rail Water Pipeline Intermodal Modes of Transportation Motor Air Rail Water Pipeline Intermodal

>Motor (Trucking) 1970’s – economic deregulation of interstate traffic Lower costs Accessibility Small, frequent Motor (Trucking) 1970’s – economic deregulation of interstate traffic Lower costs Accessibility Small, frequent shipments

>Trucking Disadvantages Speed Capacity Range Trucking Disadvantages Speed Capacity Range

>Air Premium transportation Speed delivery Range Air Premium transportation Speed delivery Range

>Air Disadvantages Price Non-direct points Add-on charges Necessary? Air Disadvantages Price Non-direct points Add-on charges Necessary?

>Rail Lowest overall cost per unit weight Consistent time schedule Recommended with most commodity Rail Lowest overall cost per unit weight Consistent time schedule Recommended with most commodity types Weather

>Rail Disadvantages Inflexibility Potential damage of goods Ineffective with small shipments Rail Disadvantages Inflexibility Potential damage of goods Ineffective with small shipments

>Water (Ships) Large volumes Long distances Slower than air travel Limited access Water (Ships) Large volumes Long distances Slower than air travel Limited access

>Pipeline Transport of homogeneous materials Lower transportation costs than other modes Higher initial costs Pipeline Transport of homogeneous materials Lower transportation costs than other modes Higher initial costs Unable to transport a variety of materials

>Intermodal Use of various transportation modes Containers More popular due to globalization Intermodal Use of various transportation modes Containers More popular due to globalization

>Pricing Handling characteristics Distance freight is moved Weight of freight Costs inversely related to Pricing Handling characteristics Distance freight is moved Weight of freight Costs inversely related to speed of service

>United Parcel Service Small package shipper Business built around transportation Effective intermodal transportation United Parcel Service Small package shipper Business built around transportation Effective intermodal transportation

>UPS - Methods Trucks Small, frequent shipments Deliver directly to homes and businesses Air UPS - Methods Trucks Small, frequent shipments Deliver directly to homes and businesses Air Time sensitive shipments Small packages (long distances)

>UPS - Methods Rail Transcontinental distances Used primarily in intermodal transport Sea Door to UPS - Methods Rail Transcontinental distances Used primarily in intermodal transport Sea Door to door ocean shipping Weekly departures between major ports

>UPS Provides expertise as a resource to businesses http://www.ups-scs.com/transportation/ UPS Provides expertise as a resource to businesses http://www.ups-scs.com/transportation/

>Exercise Take ideas from brainstorming and decide which modes of transportation would be best Exercise Take ideas from brainstorming and decide which modes of transportation would be best for your company. List circumstances which would require using alternate modes of transportation and consequences your company would encounter.

>Summary Each mode of transportation has its own strengths and weaknesses The effectiveness of Summary Each mode of transportation has its own strengths and weaknesses The effectiveness of each mode depends on several factors including distance, price, and timeliness Services exist to help choose the best modes of transportation

>Bibliography Cavinato, Joseph L, Ralph G Kauffman. The Purchasing Handbook. The McGraw-Hill Companies, 2002, Bibliography Cavinato, Joseph L, Ralph G Kauffman. The Purchasing Handbook. The McGraw-Hill Companies, 2002, New York, NY. Copacino, William C. and James F. Robeson. The Logistics Handbook. The Free Press, 1994, New York, NY. Taylor, David. Global Cases in Logistics and Supply Chain Management. International Thomson Business Press, 1997, London, UK. http://www.ups-scs.com/transportation/