Modes of transportation in supply chain management National College of Business administration and economics

1. Modes of Transportation
National College of Business Administration & economics
Lahore Metropolitan University (Proposed)

2. Transportation
• Movement of goods from one location to the
other.
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3. • Railroads
• Motor carriers
• Air carriers
• Water Carrier
• pipelines
• Unit of transportation measurement is ton-miles*
*(a ton-mile is one ton of cargo carried one mile, and is a
standard statistical measurement used in the transportation
industry).
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The Basic Modes of Transportation

4. Railroads
• Conveyance of goods by way of wheeled vehicles
running on rails.
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5. Railroads
• Capable of carrying a wide variety of products,
much more than other modes of transportation.
• Very small number of carriers; likely only one
will be able to serve any one customer location
and track at a time.
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6. • seamless dock-to-dock service by one company
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RAILROADS

7. • Rail is a long haul (pull), large
volume system (high fixed
costs; own rights-of-way).
• Accessibility can be a problem.
• Transit times are spotty, but
are generally long.
• Reliability and safety are
improving and are generally
good.
▫ Extra information:
▫ Railroads of Pakistan comprise of
8163 kilometers
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RAILROADS

8. Railroads
• Premium intermodal services
▫ Straight piggyback and containerized freight
▫ Double stacks
▫ Roadrailer service
• Unit train service
• Intermodal
Marketing
Company (IMC)
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9. Railroads
• Straight piggyback and containerized freight
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10. Railroads
▫ Double stacks
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11. Railroads
▫ Roadrailer service
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12. Railroads
• Unit train service
▫ shipped from the same origin to the same destination
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13. Railroads
• Intermodal
Marketing
Company (IMC)
▫ Intermodal
shipping is a
method of moving
cargo that
involves more
than one kind of
transportation,
whether truck,
rail, ship or plane.
▫ It uses special
containers so
goods can be
transferred from
ship to rail to
truck without
having to be
repacked.
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14. Motor Carriers
• Conveyance of goods by way of wheeled vehicles running on
roads.
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15. Motor Carriers
• Low cost of entry
causes large numbers
of transport carriers.
• Used by almost all
logistics systems and
account for 82 percent
of U.S. freight
expenditures.
• Consists of for-hire and
private carriers.
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16. Figure 9-4 Overview of Interstate
Motor Carrier Industry
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17. Motor Carriers
• Low fixed costs and high variable costs.
• Do not own their rights-of-way.
• Limited operating authority regarding service
areas, routes, rates and products carried.
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18. Motor Carriers
• High accessibility
▫ Road network of Pakistan was last measured at 258350 in
2009.
• Transit times faster than rail or water.
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19. Motor Carriers
• Reliability can be affected greatly by weather.
• Small vehicle size coincides with lower inventory
strategies and quick replenishment (QR).
• Relatively high cost compared to rail and water; trade-off
is faster service.
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20. Air carriers
• Conveyance of goods by aircraft.
• Cargo airlines are airlines dedicated to the transport
of cargo. Some cargo airlines are divisions or
subsidiaries of larger passenger airlines.
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21. Air carriers
• Limited number of
large carriers earn
about 90% of the
revenue.
• Any of the air carriers
can carry air freight
although some haul
nothing but freight.
▫ A jumbo jet i.e Boeing
747-400 freighter can
carry about 124 tons
of goods at a time.
• Cost structure is
highly variable.
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22. Air carriers
• do not own rights-of-way.
• Transit times are fastest of the modes, but rates are
highest.
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23. Air carriers
• Average revenue per ton
mile 18 times higher
than rail; twice that of
motor carriers.
• Seek goods with a high
value to weight ratio.
• Accessibility is low as is
capability.
• Reliability subject to
weather more than
other modes.
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24. International Water carriers
• Bulk amount of goods are
transported from one country
to another generally for
commercial gain by ship.
• Such ships are termed as
International water carriers.
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25. International Water carriers
• General cargo ships
▫ Large high
capacity cargo
holds
▫ Can handle
multiple cargoes
(Multi-purpose
vessel).
▫ Engaged on a
contract basis
▫ Many have self-
contained
cranes for
loading/
unloading
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• Maersk_mc_kinney_moller (World largest cargo ship)
• 18270 TEU (twenty feet equivalent unit)
• 20ft container can carry 26-28 CBM and 21.6
metric tonns.

26. International Water carriers
• Bulk carriers
▫ Specially
designed to haul
minerals
▫ Largest vessels
afloat, some
VLCCs at 500k+
tons
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• Knock nevis / Seawise Giant
crude carrier
▫ Longest ship ever built 564,763
DWT (deadweight tonnage).
• ULCC ultra large crude carrier, VLCC very large crude carrier

27. International Water carriers
• Tankers
▫ Specially designed for liquid cargoes
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• Q-Max
• Liquified natural gas carrier
• It has an LNG capacity of 266,000 cubic metres
(9,400,000 cu ft), equal to 161,994,000 cubic metres

28. International Water carriers
• Container ships
▫ Cargo ships that carry
all of their load in truck
size containers, in a
technique called
containerization.
▫ High speeds for ships;
increasingly more
common and
important
▫ Larger vessels can
handle up to 5,000
containers.
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29. International Water carriers
• RO-RO (Roll on-Roll off)
Vessels designed to carry
wheeled cargo. Such as
automobiles, trucks etc.
▫ Basically a large ferry
that facilitates the
loading and unloading
process by using drive
on/off ramps
▫ May also have the
capacity to haul
containers
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30. International Water carriers
• Others
• OBO
▫ An ore-bulk-oil carrier
is a ship designed to be
capable of carrying wet or
dry cargoes. The idea is to
reduce the number of
empty (ballast) voyages,
in which large ships only
carry a cargo one way and
return empty for another.
▫ These are a feature of the
larger bulk trades
(e.g. crude oil from
the Middle East, iron
ore and coal from Australi
a,South Africa and Brazil).
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• The OBO carrier MAYA

31. International Water carriers
• Others
• Barges (not transoceanic)
▫ A barge is a flat-bottomed boat, built mainly
for river and canal transport of heavy goods.
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• Barges towed by a tugboat on the River Thames in London, England.

32. Pipelines
• Refers only to the oil pipelines, not natural
gas
• Not suitable for general transportation
• Some research has been performed to
move minerals in a liquid medium, but
outside of a few attempts to transport
slurried-coal via pipeline, no real successes
have occurred.
▫ E.g Pipelines have been used for
transportation of ethanol in Brazil, and
there are several ethanol pipeline
projects in Brazil and the United-States.
The main problems related to the
transport of ethanol by pipeline are its
corrosive nature and tendency to absorb
water and impurities in pipelines
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33. Pipelines
• Accessibility is very low.
• Cost structure is highly fixed with low
variable costs.
• Own rights-of-way much like the
railroads.
• Major advantage
is low rates.
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34. Pipelines In Pakistan
Source : Wikipedia
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35. Conclusion
Table 9-2:
Performance Rating of Modes
Selection
Determinants Railroad Motor
Modes
Water Air Pipeline
Cost 3 4 2 5 1
Transit time 3 2 4 1 ---
Reliability 2 1 4 3 ---
Capability 1 2 4 3 5
Accessibility 2 1 4 3 ---
Security 3 2 4 1 ---
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