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Better scheduling and use of vehicle capacityMore efficient and reliable vehiclesIncreased cost competition due to deregulationInvolves different types of shipmentsDirect truck – Shipment made with no stopsLess than truckload (LTL) – Smaller shipment combined with other loads Modes of Transportation – RailHas limited distributionNatural monopolies- railroad actually owns the tracksMass movement of low valued goodsLarge capacitiesRailroads are “natural monopolies”Seven Class I railroadsFour “majors” – BNSF, Union Pacific, CSX, Norfolk SouthernTwo carrier types:Linehaul freight carriers- long distancesShortline carriers- less than 500 miles trips, goes to individual locations
Modes of Transportation – AirHigh-valued, time-sensitive products- low weightBest for low weight-to-value ratio productsFastest for fast delivery over long distancesBroad service range88 air cargo carriers (22 major ones)Combination carriers – both passengers and suppliesAir cargo carriersModes of Transportation – WaterLowest costs and large capabilitiesMajor facilitator of international trade81% international freight movementBest for high weight-to-value productsMass movement of bulk commoditiesLow-valued (domestic shipment)High-valued (international shipment)Cost effectively move large quantitiesPetroleum, coal, iron ore, chemicals etc.Container shipsBulk carriers- oddly shape loads- palletsTankers- liquidsRoll-on, roll-off (RO–RO) vessels- rolling vehicles in the shipModes of transportation – PipelineUnique mode of transportation as the equipment is fixed in place and the product moves through it in high volume. Use to ship liquids such as oil and gasThree primary types1.Gathering lines- the picture example- look at slide2.Trunk lines3.Refined product pipelinesMass movement of liquids and gassesMultiple liquids or gasses can be transported within a single pipe:Pig – a plug that separates liquids within a pipeMultimodal/Intermodal TransportationUse of two or more different modes in movement- several modes of transportation back to backGreater accessibility and overall cost efficiencyFacilitates global trade
Development of standardized containers that are compatible with multiple modes.Containerized freight•Hauls only the container.•Eliminates the dead weight of understructure and wheels of a trailer.Standardized containers allow flexibility.Multimodal/Intermodal CategoriesRail & Truck(Piggyback, Trailer-On-Flatcar (TOFL))Rail & WaterRail & AirRail & PipelineTruck & Water (Fishyback)Truck & Air (Birdyback)Truck & PipelineWater & PipelineWater & AirAir & PipelineNote: Can have more than two modes.Transport Management DecisionsOwning versus OutsourcingCompany Owned Transportation•Effective when demand is high and stable to predictable markets- gallery furniture•Good for maximizing flexibility within a stable geographyOutsourced•Common Carriers