ABOUT TRANSPORTATION

TRANSPORTATION

From the perspective of a production facility , transportation is critical to the distribution of material from the sources to the production sites and form these sites to and within the market centers. To condense the magnitude and complexity of the transportation industry for tutorial purpose. Highlights on its legal forms , auxiliary users , transfer facilities and  intermodal movement. Transportation management consists three element , infrastructure  , vehicles and operations. The elements must be managed effectively by transportation managers in achieving the 7 R’s of logistics. The seven R’s defines logistics as ensuring the availability of the right product, quantity, condition, place, time, consumer and cost. In operating and infrastructures requires licensing, procedures and maintenance and other operations activities.

Legal Forms of Transportation

The legal forms of carriers in transportation industry are common, contract carriers, exempt carriers and private carriers. Each legal category has a unique role within the logistics system.

Public (for hire)

·         The for hire carriers are no longer regulated on an economic basis by the federal government and cannot be easily categorized into a specific types because carriers provide many types of services,

·         The carter carriers also known as air taxis use small to medium sixe aircraft to transport people or freight.

·         The supplemental carrier has no time schedule or designated route. 

Common Carriers

• ·         Carriers in this legal classification are available to all users at published rates.

• ·         All tariffs are approved by the cognizant regulatory agencies.

• ·         Agrees to serve all who apply without undue preference, prejudice or discrimination.

• ·         Provides adequate facilities and services at reasonable rates.
• ·         Published rates and charges.
• ·         Accepts liability for goods tendered to it.
• ·         Assumes fairly intensive economic and safety regulations.
• ·         Operate all modes of transportation.
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Contract Carriers

• ·         Carriers in this legal classification perform selected transportation functions.

• ·         Rate differentials for the same type of service are allowed however these rates must be republished and made a matter of public record.

• ·         Regulatory bodies issue permits for contract carriers but the permits are generally less restrictive than those issued for common carriers.

• ·         Offers a specialized service in terms of equipment or product.

• ·         Enjoys geographic flexibility and latitude in serving customers.

• ·         Contract carriers include motor, water and air carriers.

Exempt Carriers

• Transportation companies in this classification primarily move unprocessed products such as agricultural products and fish. 

•  Exempt carriers are exempt from economic restrictions by regulatory bodies.

• ·         Requires no economic regulation.

• ·         Can enter or exit the market freely.

• ·         Negotiates its own rates and can discriminate.

• ·         Assume fairly intensive safety regulation.

• ·         Is so classified because of the product carried, territory served or Organization formed.

• ·         Exempt carriers generally include motor and water carriers.

Private Carriers

•   A private carriers is a firm that transports company personnel or freight to support primary business.
•   Operated by the producer or distributor of the cargo.
• Private carrier is not legally for hire by outside organization .
• Provides transportation service only for the firm the carrier and the owner of the goods are identical.
•   Requires no economic regulation.
• Assume fairly intensive safety regulation
• Transport only goods that are incidental to the primary business of the firm.    
• Private carriage involves ownership, leasing or a combination thereof and can include all modes of transportation.

  

Auxiliary Users

This category of transportation organizations exists to provide companies with economic advantages and the most responsive services that meet their specific needs from the various elements and modes of the transportation system.

Freight Forwarders

• ·         Commonly called forwarders are the travel agents of the freight world.
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• ·         When you have cargo that need to be moved anywhere, they consider the origin, destination and its special handling characteristics and arrange for the transportation.
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• ·         They find the most efficient, cost-effective mode of transport and routing.
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• ·         Provide a major service to their customers by consolidating small shipments into a large one for long-distance movement.
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• ·         While providing lower line-haul rates and faster service for shippers, they retain a portion of the differential between vehicle-load and less than-vehicle-load rates to defray the expenses of their operations and to earn a profit.
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Shipper Association

 

• ·         Similar in function to freight forwarders, are actual voluntary organizations composed of members with mutual commercial interest who use the service to take advantages of the economies of consolidation.
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• ·         These association members are usually firms shipping similar items between common origins and destinations.
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• ·         Shipping association are organizations usually not for-profit in which shipper join together to get better negotiating leverage against carriers.
• ·         This way, even smaller shippers can get lower rates as if they were a large shipper.
• ·         Member of these associations are usually small shippers, though some can still be quite large.
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Third Party Providers

• ·         Third party providers of logistics service exhibit some of the characteristics of auxiliary users.
• ·         They provide an increasing variety of services to their client firms example are usually manufacturers, including warehousing, order processing, data transmission, and shipping including the purchase of transportation.
• ·         Basic issues in dealing with third party logistics providers are :
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  Control

·         Control refers to the ability to make the contractor behave and if they were within the company.

·         It should never be assumed that a contractor is going to behave exactly as the principal (the company hiring the contractor) would wish.

  Compensation

·         Compensation refers to the amount and manner in which the contractor is paid.

·         Some may be paid on commission, while others are paid an amount regardless of performance.

·         Ideally all contractors would paid on performance but when this is difficult costly or impossible to measure others forms of payment would be required.

Transfer Facilities

1. ·         This type of activities has been regarded by some as an element of materials handling.
2. ·         For tutorial purposes, transfer facilities will by virtue of their role in the logistics system be addressed here as adjunct to the transportation modes.
3. ·         Transfer facilities can be best characterized by the nature of the freight or items they are designed to accommodate.
4. ·         They include terminals foe assembling, sorting, transferring or distributing packaged freight, terminal for handling and transferring containers used in coordinated transportation services specialized bilk commodity terminal dedicated to particular commodities ranging from grain to oil and carrier yards, terminal and ports for combining or separating carrier equipment.
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Packaged Freight Terminal

1. ·         Carriers that transport small shipment such as those engaged in highway and air operations may utilize terminals to consolidate, mix or deconsolidate packaged freight shipments.
2. ·         Small shipment or packaged sorting facilities typically employ mechanical devices and computer-controlled sorting mechanisms.
3. ·         Their automated sorting equipment is normally located at centralized hub point on their route systems so that they can gain maximum productivity from their investment.
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Container Terminal

1. ·         The growth of coordinated transport or the use of the two or more modes in transportation of single shipment has led to use of large containers that are compatible with two or more modes of carriage.
2. ·         The transfer of a 40 ft x 8 x 8.5 ft (26,580 kgs payload potential) container from one mode to another typically requires the use of crane capable of lifting up to 38,480 kgs.
3. ·         The larger terminal located in the United States and other international ports are capable of transferring large containers from trucks to ship to trucks.

Bulk Commodity Terminal

1. ·         Transportation, storage and handling of commodities in unpackaged form (example gain, coal, petroleum) has become a sizable economic activity.
2. ·         It requires facilities for assembling, transferring and breaking bulk commodities in great quantities at high speeds.
3. ·         Such facilities often have the ability to transfer such commodities between vehicles of two cooperative transportation modes.

Carrier Equipment Transfer Facilities

1. ·         Rail, highway and water carriers operate terminals for the transfer of cars, trailers, barges and respectively.
2. ·         The development of the Interstate Highway system and the improvement of the tributary roads have enabled motor carriers to haul heavier loads and more trailers per powered vehicles between terminals.