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TRANSPORTATION MANAGEMENTEIN 5346 Logistics Engineering, Spring 2010
Alejandro Leon
Arjit Joshi
Poonam Ranka
Bader Alwoimi
PROJECT FLOW
Legalities
Documentation
Modal Selection
Making and Receiving Shipments
Transportation Management Systems
WHY THINK ABOUT LEGALITIES?
Many agencies/ departments affect trade The number of regulating bodies multiplies
when you move into international trade The governing body becomes even more
nebulous when several bodies compete for control
DOMESTIC TRADE
US Constitution Art. 1, Sec.8: Congress shall have the power “To
Regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes”
Art. 1 Sec. 9: “No Tax or Duty shall be laid on Articles exported from any State.” and “No Preference shall be given by any Regulation of Commerce or Revenue to the Ports of one State over those of another; nor shall Vessels bound to, or from, one State, be obliged to enter, clear, or pay Duties in another.”
DOMESTIC REGULATING AGENCIES U.S. Department of Transportation
Federal Aviation Administration (FAA) Federal Highway Administration (FHWA) Federal Motor Carrier Safety Administration (FMSCA) National Highway Traffic Safety Administration (NHTSA) Federal Railroad Administration (FRA) Pipeline and Hazardous Materials Safety Administration
(PHMSA) Maritime Administration (MARAD) Surface Transportation Board (STB)
Florida Department of Transportation Department of Highway safety and Motor Vehicles Seaport Office Office Motor Carriers Compliance Office of Forms and Procedures
DOMESTIC REGULATING AGENCIES (CONT.) National Transportation Safety Board
Charged with determining the cause of transportation accidents and regulate what can be done to make transportation safer.
Includes vehicular and conveyance transportation Department of Commerce
Regulates what can be traded to/with foreign countries.
Department of Homeland Security Houses Customs and Border Protection
Environmental Protection Agency (EPA) Regulates the impact companies can have on the
environment and public lands Federal Trade Commission
Regulates against monopolies, anti-competitiveness, and deceptive business practices
National Labor Relations Board Regulates Labor unions and employer/ employee
relations
NON-GOVERNMENTAL “REGULATORS”
Not affiliated with the government but make recommendations that government often use when making regulation or negotiate on behalf of labor groups. National Fire Protection Agency (NFPA) Insurance Institute of Highway Safety Labor Unions
Teamsters Transport workers Union
NATIONAL FIRE PROTECTION AGENCY HAZARD DIAMOND
DOMESTIC AGENCIES DEALING WITH INTERNATIONAL TRADE
United States International Trade Commission A whistle blower on when the US is being
harassed with unfair trade arrangements Office of the United States Trade
Representative Enforcer of international trade agreements
INTERNATIONAL TRADE AGREEMENTS
•US has Free Trade Agreements with 17 nations
China?? India?? Japan?? Korea??
MAJOR US TRADE AGREEMENTS
North American Free Trade Agreement Bilateral Investment Treaties
Protect Private investment to promote US exports
Major Agreements still in the works Korea Free Trade Agreement Trans-Pacific Partnership Agreement
WORLD TRADE ORGANIZATION
International body that deals with rules and guidelines of international Trade 153 nations are members A forum where members can discuss trade
issues Brings countries together to lower tariffs and
promote free trade Works against protectionism within countries Assistance and Protection for developing
countries
DOCUMENTATION TO COMPLY WITH LAWS AND REGULATIONS Many times you need to keep/ produce many
documents to comply with regulation Truck Driver’s Log
Made to insure that a truck driver is not driving more hours than allowed
Bill of Landing A receipt of Delivery
Freight Bill An invoice submitted by a carrier requesting to be paid
Freight Claims Documentation produced to return freight when
wrong/defective deliveries are made. Customs Declaration
Form produced to inform governments of delivery contents when transporting internationally
CUSTOMS DECLARATIONFOR APOLLO 11FLIGHT
Modes of Transportation primary modes of transportation
• truck• rail• air• water• pipeline• intermodal transportation
Modes of TransportationMotor Carriers
widely used mode of transportation in the domestic supply chain
economic structure of the motor carrier industry contributes to the vast number of carriers in the industry
comprised of for-hire and private fleet operations Truckload carriers. Less-than-truckload (LTL) Small package carriers
Low fixed cost, high variableRailroads
Activity levels have been achieved despite a lack of direct accessibility to all parts of the supply chain
Railroads are “natural monopolies”
Two carrier types: Line haul Shoreline carriers
High fixed, low variable
Modes of TransportationWater
Major facilitator of international trade High variable and low fixed cost Two primary carrier types
Liner Charter
Options include Container ships Bulk carriers Tankers General cargo ships Roll-on, roll-off (RO–RO) vessels
Air Carriers 491 air cargo carriers
Combination carriers Air cargo carriers Integrated carriers Nonintegrated carriers
Domestic market is dominated by 14 major carriers High variable and low fixed cost
Pipeline Unique mode of transportation as the equipment is
fixed in place and the product moves through it in high volume
174 operators of hazardous liquid pipelines that primarily carry crude oil and petroleum products
Three primary types Gathering lines Trunk lines Refined product pipelines
High fixed versus low variable
Modal Selection Accessibility
• Accessibility advantage: Motor carriage• Accessibility disadvantage: Air, rail, and water
Transit Time• Transit time advantage: Air and motor carriage• Transit time disadvantage: Rail, water, and
pipeline
Reliability• Reliability advantage: Motor carriers and air
carriers• Reliability disadvantage: Water carriers and rail
carriers
Modal SelectionProduct Safety
• Safety advantage: Air transportation and motor carriage
• Safety disadvantage: Rail and waterCost
• Cost advantage: The cost of transportation service varies greatly between and within the modes
• Cost disadvantage: Motor carriage and air transportation
Carrier Selection selecting the individual transportation service providers
within the mode
major difference between modal and carrier selection is the number of options
difference is the frequency of the decision
type of service provided within a mode impacts carrier selection
most carriers have the capabilities to provide a similar level of service
Core carrier• limited number of carriers• leverage its purchasing dollars
MAKING AND RECEIVING
SHIPMENTS
This refers to tactical planning and control of shipments along
with supervision of freight loading and unloading.
Consolidating small Shipments:
Defined as those that weigh more than 150 pounds and less than
500 pounds.
PIC FROM SCANNER
SMALLER SHIPMENTS ARE PROBLEMATIC
Carrier Perspective: - Require a high degree of manual labor.
- Increasing labor costs.
- Lose money on small shipments because the revenues from them don’t sufficiently reflect cost considerations.
- Transportation Manager Perspective:- - Large number of small shipments means that there needs to be an
information system capable of keeping track of each shipments statues.
- -It’s easier to keep track of one shipment of 10 units than to keep track of 10 shipments of one unit.
- - Accumulate 10 units would increased the time then, could result in poorer service to the final customer.
SOLUTIONS ( EXAMPLE 10 UNITS)
1- Consolidation across Time: - Accomplished through volume guidelines ( minimum shipment of 8 units
which would mean a shipment on the fourth day) or time guidelines (ship every third day in which case the shipment volume would be 6 units).
2- Consolidation across Place: The transportation manager looks to build volume with shipments going to a
similar destination or similar destinations and this often involves looking outside one’s firm.
Transportation specialist such as freight forwarders, shippers’ associations, and transportation brokers can be helpful in achieving consolidation across place.
Demurrage: Is a penalty payment made by the shipper or consignee to a railroad for
keeping a railcar beyond the time when it should be released back to the carrier.
Detention: Is basically the same concept as demurrage, except that it usually refers to
the trucking industry.
Diversion: Occurs when the shipper notifies the carrier prior to the shipments arrival in
the destination city, of a change destination.
Reconsignment: Is similar to diversion , but it occurs after the shipment has arrived in the
destination city.
HOW TO TRACK YOUR SHIPMENT USING
http://www.youtube.com/watch?v=hWa3J-zv1EE
http://www.ups.com/tracking/tracking.html
http://www.youtube.com/watch?v=fCrqy5S-H_A&feature=related
WHY TMS?
Efficiency and productivity in daily operations Enable companies to centralize the logistics function, providing
support across their entire organization. Adhering to and enforcing business rules and processes to ensure
proper execution. Order processing is automated through the point of load costing,
carrier selection, tendering, carrier acceptance and shipment visibility.
TMS systems improve carrier communications through EDI, Internet portals, and the use of email.
Access to data through standard reports and additional report writers for customized reporting and tracking of data such as Freight accruals, fuel surcharge, and accessorial charges.
Automated electronic reconciliation improves the speed and accuracy of freight bill audit and payment.
Reduced costs through carrier selection compliance and optimization Improved customer service levels through consistent and expected
delivery.
.
TYPES OF LICENSING ARRANGEMENTS
1. On-Premise Licensing (traditional purchased license)
2. Hosted (remote)3. On-Premise Hosted Licensing (a blend
of 1 & 2)
TMS - MANAGE THREE KEY PROCESSES OF TRANSPORTATION MANAGEMENT:
1. Planing and Decision Making TMS will define the most efficient transport schemes according to given parameters, which have a lower or higher importance according to the user policy: transport cost, shorter lead-time, fewer stops possible to insure quality, flows regrouping coefficient…
2. Transport follow-upTMS will allow following any physical or administrative
operation regarding transportation: traceability of transport event by event (shipping from A, arrival at B, customs clearance…), editing of reception, custom clearance, invoicing and booking documents, sending of transport alerts (delay, accident, non-forecast stops…)
TMS - MANAGE THREE KEY PROCESSES OF TRANSPORTATION MANAGEMENT:
3. Measurement TMS have or need to have a Logistics KPI reporting
function for transport. Various functions of a TMS:
Planning and optimizing of terrestrial transport rounds Transportation mode and carrier selection Management of air and maritime transport Real time vehicles tracking Service quality control Vehicle Load and Route optimization Transport costs and scheme simulation Shipment batching of orders
Cost control, KPI (Key performance indicators) reporting and statistics Typical KPIs include but not limited to:
% of On Time Pick Up or Delivery Performance relative to requested
Cost Per Metric - mile; km; Weight; Cube; Pallet
INTER-RELATIONSHIPS OF TMS WITH ERP AND WMS
WMS
ERPCustomer or StoresTMS
Inbound deliveries to Warehouse
Outbound deliveries to Stores
Transportation Visibility Tool for Shipment Tracking
TYPICAL GLOBAL SUPPLY CHAIN FOR TODAY’S RETAILERS
38
EXAMPLE: TRANSPORTATION VISIBILITY FLOW
FreightForwarders
PoloRetail Operations
PoloCustoms Compliance
PoloTransportation
PoloVendor Compliance
Key Polo System Users
EDI 850PO Creation
&Updates
Customs Entry&
Clearance
Domestic Arrival & Transload Updates
Polo Inbound Supply Chain Visibility System (Freightek eFocus)
POFreighTek receives a feed of POs sent electronically from Polo's internal systems.ASNFreighTek loads carbon copies of EDI shipping ASNs sent from Polo Factories, Vendors and Licensees to Polo’s internal systems.Non - EDI capable Factories, Vendors and Licensees access FreighTek system directly via the web, and manually create ASNs and labels.Freight ForwardersOcean/Air Forwarders send FreighTek, Transloader and Customs Broker, an EDI status update to shipments/ASNs received from Polo Factories, Vendors and Licensees.Customs BrokerFreighTek interfaces with Customs Broker system to receive Entry and Clearance updates.TransloaderFreighTek uploads Polo Transloader ASN into the FreighTek system; consolidating Freight Forwarder ASN information, with ASN sent outbound to the DC or Store.Domestic CarriersDomestic Carriers provide EDI domestic carrier updates to shipments picked up from Transloaders and Vendors.
Via FreighTek
ERP/OrderMgmt systems.
Factories,Vendors,Licensees
EDI 315/ASAOcean/Air
Arrivals&
Departures
Brokers
EDI 856Advance Shipment
Notifications
Port Of EntryTransloaders
Domestic MotorCarriers
DC
Domestic MotorCarrier Updates
to Final DestinationFinal Destination
PoloDistribution
End to EndVisibility:
Event Tracking,Exception Alerts,
PerformanceMeasurements,
PO StatusReporting
PoloProduction
Data Sources
THANK YOU.QUESTIONS?
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