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Transportation
Fundamentals
Transportation stake holders
 Shipper (consignor)
 Recipient (consignee)
 Carrier and Agents
 Carrier : A company that...
Transport Capabilities/Intermediaries
 Transportation services can be grouped into 2 areas
Load transport
Product stora...
Transport Capabilities/Intermediaries
 Load transport
“ the purpose of load transport is to get goods to most advantageou...
Transport Capabilities/Intermediaries
 Load transport (cont) :
 Terminal services :
 Consolidating smaller shipments to...
Transport Capabilities/Intermediaries
 Documentation
 Documentation is sometime complex especially in international frei...
Transport Capabilities/Intermediaries
 Product Storage
“Though the main role of transportation is to move freight but it ...
Transportation Intermediaries
 Logistics service Providers
It includes
 3PL
 4PL
 Lead logistics providers LLPs
Transportation Intermediaries
 Third Party logistics providers 3PLs
 Broadly refers to an external supplier who can perf...
Transportation Intermediaries
 Third Party logistics providers 3PLsAdvanatges Disadvantages
Expertise on their end Lose c...
Transportation Intermediaries
 3PL service providers mostly provide these services
 Transportation such as Fedex, UPS, A...
Transportation Intermediaries
 Fourth Party Logistics Providers
 Emerged in Mid 90’s
 Primary purpose is to ensure that...
Transportation Intermediaries
 Lead Logistics Providers LLPs
 Are often sees as boundary between 3PL and 4PL
 They are ...
Transportation Intermediaries
Transportation Intermediaries
 Export Management Companies
 Located in exporting country
 Serves as 3rd party sales dep...
Transportation Intermediaries
 Export trading companies
 Typically purchases goods outright in one country and sell in o...
Transportation Intermediaries
 Export Packing companies
 When exporter lacks the necessary equipment or expertise to pac...
Carrier types
 Carrier means “ a company that provides air, sea or land transportation”
 2 types of carriers
1. Private
...
Carrier types
Carrier types
 Private Careers
 Private fleet
 Owned by giant retailers, manufacturers, distributors and wholesalers
 ...
Carrier types
 For –Hire
 Common/regulated carriers
 Transportation available to the public
 Regulated by Govt as to t...
Carrier types
 Contract carriers
 Does not serve general public
 Provide contract to number of limited or specific cust...
Freight Classification
 Freight rate
“an established price for the transport of goods based on any number of factors i.e
...
Freight Classification
 Common freight modes Include
 LTL/LCL
 TL/CL
 Small Parcel carrier
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Transportation Fundamentals | Transportation stake holders | Transport Capabilities/Intermediaries | Carrier types | Freight Classification |

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Transportation Fundamentals | Transportation stake holders | Transport Capabilities/Intermediaries | Carrier types | Freight Classification |

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Transportation Fundamentals | Transportation stake holders | Transport Capabilities/Intermediaries | Carrier types | Freight Classification |

  1. 1. Transportation Fundamentals
  2. 2. Transportation stake holders  Shipper (consignor)  Recipient (consignee)  Carrier and Agents  Carrier : A company that provides transportation  Agents : One who acts on behalf of another  Government  Public
  3. 3. Transport Capabilities/Intermediaries  Transportation services can be grouped into 2 areas Load transport Product storage
  4. 4. Transport Capabilities/Intermediaries  Load transport “ the purpose of load transport is to get goods to most advantageous locations while minimizing cost and impact on environment”  Load transport includes  Freight services :  Moves goods from one location to another  Performed by own equipment of 3PL  Any other requirement i.e parcel, cold storage etc
  5. 5. Transport Capabilities/Intermediaries  Load transport (cont) :  Terminal services :  Consolidating smaller shipments to optimize costs  Break bulk  Loading and unloading  It depends on contract who will do this whether by 3rd party or own labor/equipment  Value added services VAS :  Additional services like tracking, delivery confirmation, refrigerated or rush delivery
  6. 6. Transport Capabilities/Intermediaries  Documentation  Documentation is sometime complex especially in international freight handling it includes BOL, packing list, incoterms, consular invoice, Pro forma invoice  Transportation rates  Other then base rates which is actual cost additional factors such as nature of product and distance/destination determine the total shipment cost  Diversion and re-consignment  Diverted the shipment to its new destination by shipper while in transit
  7. 7. Transport Capabilities/Intermediaries  Product Storage “Though the main role of transportation is to move freight but it provides temporary storage”  Transport mode : it is common to store products in trailers containers for a short period due to high cost  In-transit storage : it is often used when the space is not available in receiver’s warehouse
  8. 8. Transportation Intermediaries  Logistics service Providers It includes  3PL  4PL  Lead logistics providers LLPs
  9. 9. Transportation Intermediaries  Third Party logistics providers 3PLs  Broadly refers to an external supplier who can perform part or all logistics functions  Gain popularity in 1970’s  Main functions are managing warehouse and transportation of customer  In late 2000s they include VAS like packaging and labelling, cross docking, break bulking, kitting, IT services etc.
  10. 10. Transportation Intermediaries  Third Party logistics providers 3PLsAdvanatges Disadvantages Expertise on their end Lose control Easier adaption to technologies Independence Offering locations, resources and workforce Trust issues Cost effective ( in terms of capital cost) Variable cost may be high Quick to add capabilities on demand
  11. 11. Transportation Intermediaries  3PL service providers mostly provide these services  Transportation such as Fedex, UPS, Agility, TCS etc  Warehouse/distribution  Forwarder Middleman role  Finanicial offers freight payment, auditing etc  IT information based services TMS, WMS.
  12. 12. Transportation Intermediaries  Fourth Party Logistics Providers  Emerged in Mid 90’s  Primary purpose is to ensure that all elements of SCM working towards same goals  It’s often a separate entity formed by joint venture or contract between partners  Its an interface between client and all SCM partners  All aspects covered by 4PL  The goal is to ensure one strategy across an entire SCM
  13. 13. Transportation Intermediaries  Lead Logistics Providers LLPs  Are often sees as boundary between 3PL and 4PL  They are asset based providers with asset owning
  14. 14. Transportation Intermediaries
  15. 15. Transportation Intermediaries  Export Management Companies  Located in exporting country  Serves as 3rd party sales department in international market  Specialists of certain markets  They build strong relations to obtain favorable treatment with customs  Knowledge of documentation to avoid importing delays  Have vast knowledge of importers and top customers all of the world
  16. 16. Transportation Intermediaries  Export trading companies  Typically purchases goods outright in one country and sell in other country at profit  Handle documentations and transportation by their self  ETC is considered good move for those companies who avoid or unable to deal with complexities of international trade.
  17. 17. Transportation Intermediaries  Export Packing companies  When exporter lacks the necessary equipment or expertise to pack  They ensured two things 1. To allow goods to move through customers easily 2. To protect products from longer international journeys
  18. 18. Carrier types  Carrier means “ a company that provides air, sea or land transportation”  2 types of carriers 1. Private 2. For hire
  19. 19. Carrier types
  20. 20. Carrier types  Private Careers  Private fleet  Owned by giant retailers, manufacturers, distributors and wholesalers  Transport a high volume goods or have specific need that justifies the expense  They used for advertising as well known as “rolling billboards”  Disadvantage is they can be expensive and require FT employees
  21. 21. Carrier types  For –Hire  Common/regulated carriers  Transportation available to the public  Regulated by Govt as to the rates and services  Are licensed to transport goods to public  Follow 4 rules serving, delivering, charging reasonable rates and avoiding pricing and service discrimination  Responsible for cargo insurance
  22. 22. Carrier types  Contract carriers  Does not serve general public  Provide contract to number of limited or specific customer  Exempt carriers  Free from economic regulations  Not restricted in terms of routes or rates  Transported products who exempted by the govt.
  23. 23. Freight Classification  Freight rate “an established price for the transport of goods based on any number of factors i.e distance, weight, product type etc”  All products are grouped together into uniform classifications that influence cost of transportation  Products with similar density, stowability , value are usually belongs to same classification
  24. 24. Freight Classification  Common freight modes Include  LTL/LCL  TL/CL  Small Parcel carrier

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