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CHAPTER 6: TRANSPORTATION

中國經濟管理大學15年前 (2010-01-27)講座會議519

CHAPTER 6: TRANSPORTATION


  • 講義:小保羅·R·墨菲《MBA物流學》(6)

     

    PART II

    ANSWERS TO END-OF-CHAPTER QUESTIONS


    CHAPTER 6: TRANSPORTATION


    1.      Why is transportation important to a firm’s supply chain operations?


    Transportation influences, or is influenced by, many logistics activities such as the fact that transportation costs are directly affected by the location of plants, warehouses, vendors, retail locations, and customers.  Inventory requirements are influenced by the mode of transport used and the transport mode influences the packaging required as well as the materials handling equipment.  Customer service goals influence the type and quality of carrier and carrier service selected by the seller.


    2.      Why is it important to know about the characteristics of a country’s transportation infrastructure?


    An individual country’s topology, economy, infrastructure and other macroenvironmental factors influence a country’s transportation system.  Because an increasing number of shipments are being transported between multiple countries, knowledge of a country’s infrastructure can help avert potential transportation problems.  For example, some countries may have few airports with 10,000 foot runways, which might reduce the feasibility of moving shipments via air.


    3.      List some products that frequently move by airfreight. Why do you think that airfreight was selected as the mode to use?


    As a general rule, products that move by airfreight tend to be high value and may be of a perishable nature or otherwise require urgent delivery. These products include cut flowers; electronic equipment and parts; fruits and vegetables among others.


    4.      How do truckload operations differ from less-than-truckload operations?


    Less-than-truckload (LTL) shipments range from about 150 – 10,000 pounds; truckload (TL) carriers focus on shipments of greater than 10,000 pounds although the exact weight depends on the product.  LTL shipments are often too big to handle manually, do not fill a truck and LTL carriers transport shipments of many customers simultaneously.  Whereas LTL shipments are routed through terminals, TL shipments tend to move directly from the shipper’s location to the consignee’s location.




    5.      How do speed limits and hours-of-service rules potentially affect motor carrier service?


    Speed limits and hours-of-service (HOS) rules have long been justified on the basis of safety concerns.  However, speed limits influence the amount of territory that can be covered by a trucker during a particular time period (a lower speed limit means less mileage can be covered).  Hours-of-service rules limit the number of hours that can be driven in a 24-hour period as well as the number of hours that can be driven in a one week period.


    6.      What are advantages and disadvantages to a pipeline’s lack of vehicles?


    There is no need for vehicle operators and little likelihood of work stoppages by operating employees.  The lack of vehicles also means that transportation is one way and the lack of a backhaul reduces potential excess capacity issues.  In addition, pipeline’s lack of vehicles means that it is the most reliable form of transportation because there are not vehicle-related disruptions and pipelines are virtually unaffected by adverse weather conditions.  However, the lack of vehicles means that the relevant product must be forced through the pipeline and this means that pipelines tend to be the slowest form of transportation.


    7.      What are pipeline slurry systems?  How do they function?


    Slurry systems allow bulk commodities to become liquefiable by grinding the solid material to a certain particle size, mixing it with a liquid to form a fluid muddy substance, pumping that substance through a pipeline, and then decanting the liquid and removing it, leaving the solid material.  While water is the most common liquid used in slurry systems, other liquids can be used.


    8.      Discuss the drawbacks of rail transportation.


    There is a level of market domination in railroading that creates limited service and pricing options for potential customers.  US railroads have exhibited rather uneven reliability in recent years in part because of severe weather conditions that have destroyed and damaged many miles of track.  Railroads present an interesting paradox in the sense that they are not the “best” or “worst” on any of the attributes such as capability, capacity, cost, and so on.


    9.      How do weather conditions influence the reliability of inland water carriers?


    Drought creates problems because when water levels drop below acceptable levels, barges are forced to reduce their loads or barge traffic might be halted altogether, situations that require alternate means of transportation.  Icing closes bodies of water and prevents year-round operations.  With flooding, there is too much water and while the disruptions from flooding tend to be shorter than those associated with drought, any disruption negatively impacts transportation reliability.


    10.  Discuss the positive attributes of inland water transportation.


    Inland water transportation is relatively inexpensive to users, particularly when compared to rail and truck transportation.  Moreover, many different kinds of products can be carried and of the modes with vehicles, inland water transportation offers the greatest capacity (volume that can be carried at one time).


    11.  What is a land bridge service?  How might it be applied?


    Rather than all water service between two ports, land bridge services involve the use of surface transportation—usually rail—between the origin and destination port.  The text presents an example of a shipment of pineapples from Hawaii to Europe.  Rather than going by water from Hawaii through the Panama Canal and then onto Europe, under land bridge service the pineapples would move by ship from Hawaii to a US west coast water port.  From this port the pineapples could be placed on railcars and shipped across the US to an east coast port where the pineapples would be loaded onto a vessel for movement to Europe.


    12.  What are freight forwarders?  How do they function?  What services do they perform?


    Freight forwarders operate as agents that act as consolidators of freight.  They function by consolidating shipments from small shippers, buying transportation in volume rates, and then charging shippers a rate somewhere between the non-volume rate and the volume rate.  The forwarder may offer pickup and delivery services, but not linehaul service.  In addition, forwarders can specialize by handling domestic or international shipments; by handling surface or air shipments; by handling certain products (e.g., garments).


    13.  What is a shippers’ association?


    Shippers’ associations perform basically the same functions as surface and air freight forwarders, except shippers’ associations do not operate as profit-making organizations.  All profits achieved through their consolidation programs are returned to the associations’ members.


    14.  Why do truckload rates tend to be lower than less-than-truckload rates?


    Truckload rates are lower than less-than-truckload rates for three reasons:  1) the shipper loads the goods and the consignee unloads the trailer; 2) the load goes directly from shipper to consignee without passing through terminals; 3) paperwork, billing, and other administrative costs are little more for a 25,000 pound shipment than they would be for a 250 pound shipment.


    15.  Discuss the various options that are available to parcel shippers.


    Parcel shippers, who send packages weighing up to 150 pounds, have a variety of options such as Parcel Post, a service of the U.S. Postal Service that was specifically established to send packages through the mail system.  Parcel Post has definite size and weight limitations (approximately 70 pounds).  United Parcel Service (UPS) and FedEx are also options for parcel shippers; their rates, unlike the Parcel Post, include both pick up and delivery.  The weight limitations for UPS and FedEx range from 70 to 150 pounds, depending on the type of service purchased.  Package services are also available from Greyhound Lines, the primary intercity bus company in the U.S., and packages are limited to a maximum weight of 100 pounds.


    16.  List several environmental regulations and describe their impact on transportation.

    Noise standards promulgated by the U.S. Environmental Protection Agency (EPA) meant that commercial airlines had to equip their fleet with quieter engines.  In terms of air pollution, the EPA has mandated that beginning in 2007 heavy-duty truck engines must meet stringent emission standards.  The EPA is also quite concerned with resource conservation and improved fuel efficiency and reduced consumption of petroleum have become important issues for many transportation companies.


    17.   Pick three modes of transportation, name the federal agency responsible for safety regulation for each of the modes you picked, and provide a safety-related issue for each mode.


    Air:  Federal Aviation Administration; weather-related accidents.  Motor carriers:  Federal Motor Carrier Safety Administration; large truck accidents are most often caused by driver behavior.  Railroads:  Federal Railroad Administration; signal and train control issues.  Pipelines:  Pipeline and Hazardous Materials Safety Administration; classifies accidents according to cause, damage, and fatalities or injuries.  Inland water:  U.S. Coast Guard; improve tugboat, towboat, and barge safety.


    18.  Define what is meant by economic regulation.  Why is transportation economic deregulation important?


    Economic regulation in transportation refers to control over business practices and activities such as entry and exit, pricing, service, accounting and financial issues, mergers and acquisitions.  Economic deregulation of transportation is important because it allowed transportation companies much greater freedom with respect to pricing and service options—two attributes that facilitate the tailored logistics concept.  In addition, the economic deregulation that occurred in the U.S. has been the catalyst for economic deregulation in Canada and some European nations.


    19.  How does a common carrier differ from a contract carrier?


    A common carrier has agreed to serve the general public by assuming four specific obligations:  to serve, to deliver, to charge reasonable rates, and to avoid discrimination in pricing and service.  A contract carrier offers a specialized service to customers on a contractual basis and the contract specifies the compensation to be received, the services to be provided, the type of equipment to be used, among others.  Unlike the common carrier, the contract carrier is under no obligation to render services to the general public and only has to serve customers with whom it has contracts.


    20.  Discuss advantages and disadvantages to private transportation.


    Operational control is a key advantage to private transportation.  For example, shipments can move at a time convenient to the company, as opposed to a time that might be convenient for a carrier.  Private transportation may also be a cost effective form of transportation, particularly in situations where the company can find backhaul traffic; revenue from the backhaul can be used to offset costs on both the fronthaul and backhaul.  A key disadvantage is that private transportation can be quite costly, in part because of the capital expenditures that are necessary to own or lease the relevant vehicles.  Moreover, managerial costs are often ignored or underestimated, which sometimes results in large, unanticipated outlays to procure a full-time private fleet manager.


    PART III

    EXAMINATION QUESTIONS


    CHAPTER 6: TRANSPORTATION


    Multiple Choice Questions


    1.      ___________ is the actual, physical movement of goods and people between two points.


    a.       Logistics

    b.      Transportation

    c.       Materials handling

    d.      Telecommunications

    (b; p. 135)


    2.      There are ____________ modes of transportation.


    a.       three

    b.      four

    c.       five

    d.      six

    (c; p. 136)


    3.      A 3,047 meter (10,000 foot) runway is significant because it ____.


    a.       is the longest that can be used worldwide due to safety regulations

    b.      represents the longest runway in the world

    c.       is generally viewed as adequate for accommodating existing wide body aircraft

    d.      is only found in economically developed countries

    (c; p. 136)


    4.      Rail gauge refers to ____.


    a.       the distance between the inner sides of two parallel rail tracks

    b.      the length of rail track

    c.       the thickness of rail track

    d.      the allowable speed on a segment of track

    e.       none of the above

    (a; p. 137)





    5.      In the United States, ____ account for the largest share of ton-miles and ____ account for the majority of freight revenues.


    a.       rails; rails

    b.      trucks; trucks

    c.       trucks; rails

    d.      rails; trucks

    (d; p. 137)


    6.      ____ is generally the fastest form of transportation for shipments exceeding 600 miles.


    a.       Less-than-truckload carriers

    b.      Air

    c.       Parcel carriers

    d.      Truckload carriers

    (b; p. 138)


    7.      Consignees are:


    a.       preferred suppliers

    b.      receivers of freight

    c.       shippers of freight

    d.      extremely large LTL carriers

    (b; p. 138)


    8.      Dimensional weight ____.


    a.       is no longer used

    b.      only applies to air transportation

    c.       considers a shipment’s density

    d.      is associated with commodity rates

    (c; p. 138)


    9.      Which of the following is not likely to move by air transportation?


    a.       wearing apparel

    b.      fruits and vegetables

    c.       cut flowers

    d.      auto parts

    e.       all are likely to move by air

    (e; p. 139)





    10.  Less-than-truckload (LTL) carriers:


    a.       serve only regional markets

    b.      operate through a series of terminals

    c.       are exempt from hours-of-service regulations

    d.      carry the shipment directly from shipper to consignee

    (b; p. 139)


    11.  Truckload carriers focus on shipments of greater than ____ pounds.


    a.       10,000

    b.      15,000

    c.       20,000

    d.      25,000

    (a; p. 139)


    12.  Each of the following statements are true, except:


    a.       truckload movements go directly from shipper to consignee without passing through terminals

    b.      truckload shipments cost less per pound than LTL shipments

    c.       in truckload shipments, the shipper loads and the consignee unloads the trailer

    d.      J.B. Hunt is an example of a truckload carrier

    e.       all are true

    (e; pp. 139-140)


    13.  Hours-of-service (HOS) rules and speed limits have long been justified in the motor carrier industry on the basis of ____.


    a.       cost efficiency

    b.      operational efficiency

    c.       safety concerns

    d.      customer requirements

    (c; p. 140)


    14.  The primary advantage for motor carriers is ____.


    a.       reliability

    b.      speed

    c.       capability

    d.      flexibility

    (d; p. 140)





    15.  ____ trucking tends to have the highest cost per hundred weight.


    a.       LTL

    b.      TL

    c.       Parcel

    d.      Expedited

    (d; pp. 140-141)




    16.  ____ is the most reliable form of transportation.


    a.       Rail

    b.      Motor carrier

    c.       Pipeline

    d.      Air

    e.       Water

    (c; p. 141)


    17.  ____ allows bulk commodities to become liquefiable by grinding the solid material to a certain particle size, mixing it with liquid, transporting it and then decanting the liquid.


    a.       Rhochrematics

    b.      Slurry systems

    c.       Conveyor systems

    d.      Geothermic systems

    (b; p. 141)


    18.  ____ have a level of market concentration and dominance that is not found in the other modes.


    a.       Pipelines

    b.      Airlines

    c.       Railroads

    d.      Motor carriers

    (c; p. 142)


    19.  Which mode is not the “best” or “worst” on any of the six attributes (e.g., capability, flexibility, etc.) that were used to compare the modes?


    a.       railroads

    b.      water carriers

    c.       pipelines

    d.      motor carriers

    (a; p. 142)

    20.  Inland waterways should be dredged to a depth of ____ feet, which tends to be the minimum depth required for most barges.


    a.       six     

    b.      nine

    c.       twelve

    d.      fifteen

    (b; p. 143)


    21.  A ____ raises or lowers barges so that they can meet the river’s level as they move upstream or downstream.


    a.       towboat

    b.      levee

    c.       barge crane

    d.      lock

    (d; p. 143)


    22.  Of the modes with vehicles, ____ offer the greatest capacity (volume that can be carried at one time).


    a.       railroads

    b.      water carriers

    c.       motor carriers

    d.      airlines

    (b; p. 144)


    23.  ____ transportation occurs when two or more modes work closely together in an attempt to utilize the advantages of each mode while at the same time minimizing their disadvantages.


    a.       Multimodal

    b.      Intramodal

    c.       Intermodal

    d.      Collaborative

    (c; p. 144)


    24.  What is regarded as the key development in intermodal transportation over the past 30 years?


    a.       economic deregulation

    b.      improved rail access

    c.       the container

    d.      the Internet

    (c; p. 144)


    25.  The primary advantage to land bridge service is ____.


    a.       less loss and damage

    b.      reduced transit time

    c.       lower transportation cost

    d.      improved reliability

    (b; p. 145)


    26.  Freight forwarders:


    a.       are the same as shippers’ associations

    b.      consolidate the shipments of several carriers

    c.       represent the consignees’ interests

    d.      consolidate the shipments of several shippers

    (d; p. p. 146)


    27.  Shippers’ associations:


    a.       are the same as a freight forwarder

    b.      function in a manner similar to freight forwarders

    c.       specialize in truckload shipments

    d.      are used only for agricultural products

    (b; p. 146)


    28.  A transportation broker:


    a.       looks to match a shipper’s freight with a carrier to transport it

    b.      deals only with agricultural products

    c.       is the same as a freight forwarder

    d.      tends to be spun off from carriers or management consulting firms

    (a; p. 147)


    29.  Firms that specialize in carrying packages that weigh up to 150 pounds are called:


    a.       couriers

    b.      accessorial carriers

    c.       parcel carriers

    d.      expedited carriers

    (c; p. 147)








    30.  What is the largest transportation company (by revenues) in the United States?


    a.       FedEx

    b.      Union Pacific Railroad

    c.       American Airlines

    d.      United Parcel Service

    (d; p. 147)


    31.  The U.S. ____ is the federal government body with primary responsibility for transportation safety regulation.


    a.       Interstate Commerce Commission

    b.      Department of Commerce

    c.       Department of Homeland Security

    d.      Department of Transportation

    (d; p. 148)


    32.  With respect to U.S. economic regulation, the ____ has primary responsibility for resolving railroad rate and service disputes, reviewing potential rail mergers and some jurisdiction over motor carriers, domestic water transportation, and pipelines.


    a.       Surface Transportation Board

    b.      Interstate Commerce Commission

    c.       Federal Trade Commission

    d.      Department of Commerce

    (a; p. 148)


    33.  Common carriers of transportation have ____ obligations.


    a.       six

    b.      five

    c.       four

    d.      three

    e.       none of the above

    (c; p. 150)


    34.  Which of the following is not a legal classification of carriers?


    a.       exempt

    b.      common

    c.       contract

    d.      private

    e.       all are legal classifications

    (e; p. 150)



    35.  Private transportation is most prevalent in the ____ industry.


    a.       pipeline

    b.      trucking

    c.       railroad

    d.      airline

    (b; p. 151)



    True-False Questions


    1.      Transportation is the actual, physical movement of goods and people between two points. (True; p. 135)


    2.      There are six different modes of transportation. (False; p. 136)


    3.      A 10,000 foot (3,047 meter) runway is viewed as adequate for accommodating the largest existing wide body aircraft. (True; p. 136)


    4.      Rail gauge refers to the thickness of rail track. (False; p. 137)


    5.      In the U.S., motor carriers have the largest share of ton-miles. (False; p. 137)


    6.      Air is generally the fastest mode of transportation for shipments exceeding 600 miles. (True; p. 138)


    7.      Accessorial service is always provided by trucks. (False; p. 138)


    8.      Products that are air freighted tend to be high in value and tend to require urgent delivery. (True; p. 138)


    9.      Less-than-truckload shipments range from about 150 to 10,000 pounds. (True; p. 139)


    10.  Truckload freight moves through a carrier’s terminal(s). (False; p. 139)


    11.  Hours-of-service rules and speed limits have generally been justified on the basis of operational efficiency. (False; p. 140)


    12.  The primary advantage for motor carriers is capability (the amount of different types of products that can be carried). (False; p. 140)


    13.  Pipelines are a unique mode of transportation because it is the only one without vehicles. (True; p. 141)


    14.  Railroads are considered the most reliable form of transportation. (False; p. 141)


    15.  Trunk lines carry crude oil to concentration points. (False; p. 141)


    16.  The U.S. railroad industry is dominated by four freight carriers. (True; p. 142)


    17.  U.S. freight railroads are not the “best” or “worst” on any of the six attributes that were used to compare modes. (True; p. 142)


    18.  Twelve feet of water is the minimum depth required for most barges. (False; p. 143)


    19.  Drought, icing, and flooding can impact the reliability of inland water transportation. (True; p. 143)


    20.  Barge transportation tends to be slow. (True; p. 143)


    21.  Of the modes with vehicles, railroads offer the greatest capacity, or volume, that can carried at one time. (False; p. 144)


    22.  The container is regarded as the key development in intermodal transportation over the past 30 years. (True; p. 144)


    23.  A commonly used metric for measuring container volumes is the TEU (twenty-foot equivalent unit). (True; p. 144)


    24.  Freight forwarders are the same thing as freight brokers. (False; pp. 146-147)


    25.  Freight forwarders sell freight at a higher rate per pound than they pay carriers to haul it. (True; p. 146)


    26.  Shipper cooperatives perform basically the same function as surface and air freight forwarders, except that cooperatives do not operate as profit-making organizations. (True; p. 146)


    27.  A transportation broker looks to match a shipper’s freight with a carrier to transport it. (True; p. 147)


    28.  Parcels refer to packages weighing up to 100 pounds. (False; p. 147)


    29.  The largest U.S. transportation company by revenues is FedEx. (False; p. 147)


    30.  The various types of transportation regulation cost money. (True; p.148)


    31.  The level and degree of transportation regulation is relatively uniform from country to country. (False; p. 148)


    32.  Environmental regulation of transportation is concerned with water, noise, and air pollution. (True; p. 148)

    33.  The U.S. Department of Homeland Security is the federal government body with primary responsibility for transportation safety regulation. (False; p. 148)


    34.  U.S. pipelines are so safe that there is no federal safety agency assigned to regulate them. (False; p. 149)


    35.  Economic regulation in transportation refers to control over business practices and activities such as entry and exit; pricing; service; accounting and financial issues; mergers and acquisitions. (True; p. 149)


    36.  Since deregulation, transportation carriers are no longer constrained with respect to the variety of services they can offer. (True; p. 150)


    37.  Private carriers do not have to comply with environmental and safety regulations. (False; p. 150 )


    38.  Common carrier transportation companies have four specific obligations. (True; p. 150)


    39.  A contract carrier is under no obligation to render services to the general public. (True; p. 150)


    40.  Private transportation is most prevalent in the pipeline industry. (False; p. 151)



    PART IV

    CASE SOLUTIONS


    CASE 6-1 BOONE SHOE COMPANY


    Question 1: Assume that there are no commodity or exception rates in effect for this shipment. Using Exhibits 6-B, 6-C, and 6-D, calculate the applicable charge.


    The LCL rating for arch support insoles (item number 13390) is 100 and a CL rating (20,000 pound minimum) is 70. The rate basis number is 579. The rate can then be found; it is $3.49 per hundredweight (CWT). The charge can be calculated with the class rate formula:


    Rate x                   weight in CWTs                 charge


    $3.49       x            170                      =     $593.30


    Question 2Steve remembered that he had heard Larry speak of shipping “wind.” This involved paying the CL minimum weight in order to receive the CL rate, even if the shipment actually weighed less than the carload minimum weight. Should this technique be used for the shipment? Why or why not?


    Using the same formula as above:


    $2.44   x            200                         $488


    By using the CL rating and shipping 3,000 pounds of “wind,” a saving of $105.30 ($593.30 minus $488) is possible. However, in order to qualify for the CL rate, the shipper would have to load the railcar and the consignee unload it.


    Question 3: The buyer will pay on receipt of the shipment, which is valued at $21,000 plus any transportation charges. Boone Shoe Company borrows money from the bank regularly on an open line of credit and is currently paying interest on its debt at the rate of 15% per year. If rail LCL service is used, delivery time to Green Bay will be about 10 days. If rail CL service is used, delivery time will be 6 days. What is the additional advantage to Boone Shoe Company if it chooses to use CL service?


    The shoe company should receive their payment 4 days earlier. The annual 15% interest rate works out to be .16% for 4 days. Multiplying $21,000 by .16 gives us $33.60 of savings in interest expense.


    Question 4: (This is a continuation of question 3.) Boone Shoe Company also owns several large trucks, although Steve is uncertain whether they are available for immediate use. He knows that they could make the delivery to Green Bay in 2 days. He checks the highway distance from St. Joseph to Green Bay and finds that it is 588 miles. Larry had once told Steve that it cost the company $.85 per mile to operate its highway trucks. Do you think that a truck should be used if it is available? Why?


    The one-way cost is 588 times $.85, or $499.80. Note, however, that this leaves the truck (and driver) in Green Bay. It must either be driven back empty, or a backhaul of some other commodity must be found.


    Question 5: (This is a continuation of questions 2 and 3.) Another alternative is to make the shipment by rail from Boone’s St. Louis warehouse. Rail delivery time will be 4 days. What price should Tom Cook be told to quote to Lawson’s?


    It still pays to ship “wind.” The rate basis number is 458 and the CL rate (using 460) is 215. Multiplying $2.15 times 200 yields $430. If Tom really wanted to be competitive, he could take into account that payment would be 6 days earlier.


    Question 6: Boone Shoe Company often sells large quantities—from 10,000 up to 30,000 pounds—of arch-support insoles on an FOB-delivered basis. After referring to Exhibit 6-B, do you think there is a minimum weight (in this 10,000–30,000 pound range) that customers should be encouraged to order? If so, what is it?


    Obviously, orders over 20,000 pounds will move at lower (70) ratings. However, because of the “shipping wind” principle, there are some savings in the weight categories between 14,000 and 20,000 pounds.


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