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Modes of Transportation in
Supply Chain
Trey Lynn
Brigham Young University
BusM 361
Professor S. Tom Foster
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Agenda
Transportation defined
Brainstorming Modes of transportation
Strengths and weaknesses of each mode
Pricing
UPS example Exercise
Summary
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Transportation
means of conveyance or travel (of goods
and services) from one place to another
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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 forthese products?
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Modes of Transportation
Motor
Air
Rail
Water
Pipeline
Intermodal
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Motor (Trucking)
1970s economic deregulation of
interstate traffic
Lower costs
Accessibility
Small, frequent shipments
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Trucking
Disadvantages
Speed
Capacity
Range
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Air
Disadvantages
Price
Non-direct points
Add-on charges
Necessary?
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Rail
Lowest overall cost
per unit weight
Consistent time
schedule
Recommended with
most commodity types
Weather
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Rail
Disadvantages
Inflexibility
Potential damage of goods
Ineffective with small shipments
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Water (Ships)
Large volumes
Long distances
Slower than air travel
Limited access
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Pipeline
Transport of homogeneous
materials Lower transportation costs than
other modes
Higher initial costs
Unable to transport a variety of
materials
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Intermodal
Use of various transportation
modes
Containers
More popular due to
globalization
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Pricing
Handling characteristics
Distance freight is moved
Weight of freight
Costs inversely related to speed of service
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United Parcel Service
Small package shipper
Business built around transportation
Effective intermodal transportation
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UPS - Methods
Trucks
Small, frequent shipments
Deliver directly to homes and businesses
Air
Time sensitive shipments
Small packages (long distances)
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UPS - Methods
Rail
Transcontinental distances
Used primarily in intermodal transport
Sea
Door to door ocean shipping
Weekly departures between major ports
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UPS
Provides expertise as a resource to
businesses
http://www.ups-scs.com/transportation/
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Exercise
Take ideas from brainstorming and decide
which modes of transportation would bebest for your company.
List circumstances which would require
using alternate modes of transportation andconsequences your company would
encounter.
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Summary
Each mode of transportation has its own
strengths and weaknesses The effectiveness of each mode depends on
several factors including distance, price, andtimeliness
Services exist to help choose the best modesof transportation
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Bibliography
Cavinato, Joseph L, Ralph G Kauffman. The Purchasing
Handbook. The McGraw-Hill Companies, 2002, NewYork, NY.
Copacino, William C. and James F. Robeson. The LogisticsHandbook. 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/