CHAPTER 7

Transportation Management

Learning Objectives

To examine the background of the transportation

management function

To discuss the functions of transportation

management

To identify the role negotiations play in the

transportation management function

To examine the new options available for private

carriage

To understand the purpose of freight consolidation

Industrial Transportation Management

Key Terms

Bill of ladingDemurrage and detention

DiversionExpediting

Key Terms

Hazardous material

Loss and damage

Private transportation

Industrial Transportation Management

Key TermsRate and service negotiations

Rate determination

ReconsignmentReparations

Key TermsShipment consolidation

TracingTransit privileges

Rate Determination and Negotiation Activities

Rate Determination

Freight Classification

Rate and Service Negotiations

Rate Regulatory Bodies

Rate Determination

Often located on carrier Web sitesInformation needed for rate determination

may include:Origin and destination by city or zip codeWhether carrier will load/unloadDimensions (cube) of loadNumber of unitsWeightNational Motor Freight Classification numberDescription of material to be moved

Figure 7-1: Page from a Catalog by AW Direct Showing Shipping Charges

Figure 7-2: Page from a Port of Houston Tariff Showing Some Loading, Unloading, and Wharfage Charges

Freight ClassificationFreight classification values relate to

handling characteristics of freight

May apply to National Motor Freight

Classification Committee for change in

classification

Goods in foreign trade list commodities by

harmonized number of Harmonized Tariff

Schedule of the United States (TSUSA)

Figure 7-3:

Motor

Carrier

Classificati

on Docket

Proposal

for

Changing

the

Classificati

on of Spark

Plugs

Rate and Service Negotiations

Both rates and service levels may be negotiated

Long-term relationships are encouraged

Negotiations are subject to antitrust laws

Rate Regulatory BodiesU.S. Department of Commerce

Foreign Trade Zone BoardDepartment of Transportation

committeesHouse of Representatives

subcommittees

Private TransportationPrivate transportation is used when firms own

and operate their own trucks, railcars, barges,

ships, and/or airplanesWal-Mart has largest private truck fleet in U.S.

7,767 tractors and 26,117 trailers

Private trucking providesImproved level of customer serviceAdvertising on the trucksMay be less expensive

DocumentationBill of lading

Straight bill of ladingOrder bill of ladingLong-form bill of ladingPreprinted short-form bill of lading

Freight bill

Figure 7-4: A Long-Form Bill of Lading

Figure 7-5: A Preprinted Short-Form Bill of Lading

Freight Payment and Audit Services

Freight bills must be paid within a

specific number of days

Payment services are usedTo detect duplicate billingsTo ensure that proper rate was

charged

RoutingShippers have the right to select the

carriers along the route to shipment

destination

More often need to be specified for

hazmat

Generally are computer generated

Alternative routes and carriers are also

important

Diversion and Reconsignment

Diversion occurs when the shipper

notifies the carrier, prior to arrival, of a

change in destination

Reconsignment occurs when the shipper

notifies the carrier, after arrival, of a

change in destination

Tracing and ExpeditingTracing is the attempt to locate lost or late

shipmentsDone by computer at no cost

Expediting is rapidly moving a shipment through

a carrier’s system.

Both of these are less likely to be used today

since shipments can be pinpointed en route and

carriers provide better on-time performance

Loss and DamageShippers and carriers try to resolve first

What is the full actual loss?Concealed loss or damageWho takes possession of damaged

goods after claim settled?

If unresolved, moves to court system

Transit PrivilegesTransit privileges allow cargo to be

stopped en route between origin and

destination to be unloaded, stored, or

processed and then reloaded for

delivery to original destination

Often used in household goods moving

and storage industry

Reparations

Reparations are payments made to a

shipper by a carrier that has charged

illegally high rates in the past

Also collected when carriers do not live

up to terms of contracts with shippers

Demurrage and DetentionDemurrage is a penalty payment made to

the railroad for keeping a railcar beyond the time when it should be released back to railroad

Detention is the word used in the trucking industry

Carriers do not want equipment used as temporary warehouse by shipper or consignee

Transportation of Hazardous Materials

Hazardous material is a substance or

material in a quantity and form which may

pose an unreasonable risk to health and

safety or property when transported in

commerceMust be moved safelyLabeled with placardMust have 24-hour hotline used in event

of spills

Figure 7-6:

Specialized

Container with

Sump to

Capture

Hazardous

Waste Leaks

from Barrels

Consolidating Small ShipmentsShipments > 150 and < 500 pounds

To get a lower rate, shipment

consolidation may occur: aggregating

customer orders across time or place or

both

Figure 7-7: The Transportation Manager

Consolidates Shipments Whenever He or

She Can

Figure 11-3: A Configuration of Internet Messaging to Provide for Secure Transmission

Logistics Information TechnologLogistics Information Technology y

第三讲 物流信息技术

主讲教师：张余华教授主讲教师：张余华教授

物 流 管 理 学Thanks for Your Cooperation