Transportation Modes: Advantages and Disadvantages

Chapter 7: Evaluation of Transportation Modes (Truck, Air, Rail, Water)

Overview of Chapter

  • Purpose: Explain various modes of transportation and their roles in the supply chain.

  • Each mode of transportation has distinct functions and plays a critical part in supply chain logistics.

Objectives

Upon completion of the chapter, you should be able to:

  1. Describe each mode of transportation along with their advantages and disadvantages.

  2. List main considerations in choosing the most effective mode of transportation.

  3. Explain how performance information for different modes can be utilized for quick decision-making.

  4. Provide examples of transportation documentation.

Transportation Modes: Overview

Trucking

  • Most products in the United States are transported by trucks on public roadways.

  • Allows pick-up and delivery between any two points served by roads.

  • Types of truck carriers:

    • Common carriers

    • Contract carriers

    • Line haul carriers

    • Express carriers

    • Private fleet carriers

  • Typical trailer weight: approximately 50,000 to 55,000 pounds; some states allow tandem trailers up to 100,000 pounds.

  • Truck receiving activities at warehouses include:

    • Yard control

    • Dock scheduling

    • Unloading products

    • Verifying product quality and quantity

    • Inventory entry

    • Product identification and transport to storage.

  • Yard Control:

    • Determines unloading time at docks.

    • Important in operations moving hundreds of trailers daily.

    • Yard jockeys may manage trailer spotting.

Advantages of Trucks

  • Suited for moving small volumes to various destinations.

  • Faster delivery for shipments under 500 miles than other modes.

  • Freight can be loaded prior to transportation.

  • Lower ownership or leasing costs compared to air, sea, and rail transport.

  • Provides fast and flexible service with controlled internal environments (e.g., refrigerated transport for food).

Disadvantages of Trucks

  • High operational costs including fuel, licensing fees, and tolls.

  • Require in-house routing and scheduling.

  • Refrigerated trucks demand more power.

Air Transport

  • Major in international logistics; used for lightweight, high-value products (e.g., electronics, jewelry).

  • Important for emergency deliveries and essential repair parts.

  • Methods to ship air freight include:

    • Tendering directly to airlines (e.g., FedEx, UPS, DHL; includes passenger airlines with cargo divisions).

  • Advantages:

    • Fastest transportation mode, capable of delivering products globally within a day.

    • Flexible as long as a suitable landing strip exists.

Disadvantages of Air Transport

  • Most expensive transportation option with high operating costs.

  • Physical characteristics of goods may limit shipping capabilities.

  • Air carriers face heavy fixed and variable costs.

Fast Facts: Trucks

  • Trucks account for over 70% of U.S. freight by weight.

  • Gross freight revenue from trucking exceeds $730 billion annually.

  • Approximately 38 million trucks registered in the U.S. and travel over 300 billion miles/year, consuming 45 million gallons of fuel.

  • Approximately 1 million private carriers are registered with the Federal Motor Carrier Safety Administration.

  • Around 3.4 million truck drivers employed with a 99% annual turnover rate.

Fast Facts: Air

  • Over 60 million tons freight shipped by commercial airlines annually.

  • Nearly 900 planes in U.S. air cargo fleet.

  • Largest air cargo flow is from East Asia to the U.S.

Water Transport

  • Encompasses oceangoing, coastal, and inland vessels; used for large or bulky materials over long distances.

  • Inland waterways in the U.S. transport products like coal and petroleum; examples include lake freighters on Great Lakes.

  • ### Fast Facts: Water

    • 90% of import merchandise in the U.S. arrives via ocean container.

    • Busiest U.S. ports include: Port of Los Angeles, Port of Long Beach, Port of New York, Georgia Ports, Port of Seattle/Tacoma.

Advantages of Water Transport

  • Larger capacity than trucks, railcars, and planes; for instance, one barge can carry about 15 railcars or 60 tractor trailers.

  • More cost-effective for bulk transport.

Disadvantages of Water Transport

  • Slower than other modes (e.g., inland barges average about six miles per hour).

  • Transit time from U.S. West Coast to Pacific Rim usually takes 14 days; East Coast to Europe about 10-12 days.

Fast Facts: Rail

  • Rail networks span 155,300 miles in the U.S.; 80% for freight.

  • Approximately 700 railroad companies operate freight service, moving 1.6 trillion ton-miles.

  • Rail adds more than $45 billion annually to the U.S. economy and supports over 1.1 million jobs.

Advantages of Rail

  • Best suited for bulk and heavy product transport over long distances; significant cost efficiency.

  • Speed is decent over long distances; a single train comprises up to 100 cars, each carrying about 160,000 pounds.

Disadvantages of Rail

  • Limited to areas served by rail lines; lower frequency of transit compared to trucks; longer delivery times (up to 10 days in U.S.).

Pipelines

  • Transport liquids like gas and oil; high capital costs are offset by low operational costs.

Intermodal Shipping

  • Involves using multiple transportation modes for efficiency, cost-effectiveness, and security.

  • Each mode’s advantages are capitalized upon while mitigating disadvantages.

Considerations in Mode Selection

  • The chosen mode influences packaging requirements and handling rules.

  • Important factors: freight volume, customer service needs, transportation costs, infrastructure quality.

Types of Carriers

  • Common carriers: Transport for any shipper without preference; regulated on rates and services.

  • Private carriers: Owned by firms transporting their goods.

  • Contract carriers: Transport for specific shippers at variable rates.

  • Exempt carriers: Not federally regulated.

Cross-Docking

  • Packing products for easy sorting at warehouses for outgoing shipments, minimizing storage needs.

Freight Forwarders

  • Intermediaries assisting shippers with space acquisition, documentation, and delivery arrangements.

Measuring Transportation Quality

  • Important metrics include:

    • Claims-free percentage

    • Damage-free percentage

    • On-time arrival and departure percentages

    • Perfect delivery percentage

Conclusion

  • Transportation is the most expensive logistics activity, closely monitored for efficiency.

  • Reliability and quality significantly impact logistics chain effectiveness. Information management is crucial for optimizing transportation mode selection, incorporating factors like product characteristics, delivery methods, and economic conditions.

Transportation Documentation

  • Essential for negotiations with carriers; includes historical volumes, required service levels, performance records, and freight documents like bills of lading.

  • Critical for international transport includes export and import documents to facilitate smooth processing of goods across borders.