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Supply Chain Logistics Management

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Supply Chain Logistics Management Role of Transportation in Logistics & Supply Chain Management Industry Deregulation Transportation Functions, Principles ... – PowerPoint PPT presentation

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Title: Supply Chain Logistics Management

1
Supply Chain Logistics Management
Transportation Infrastructure Regulation
2

Role of Transportation in Logistics Supply
Chain Management
Industry Deregulation

Transportation Functions, Principles,
Participants
Transportation Regulation
Transportation Industry Structure
Transportation Services

Transportation Functions, Principles,
Participants
Transportation Functions
Transportation Principles
Transportation Participants
Transportation Regulation
Transportation Industry Structure
Transportation Services

Transportation Functions, Principles,
Participants
Transportation Functions
Product Movement
Product Storage
Transportation Principles
Transportation Participants
Transportation Regulation
Transportation Industry Structure
Transportation Services

6
Product Movement
7
Product Storage
8
New Destination NORFOLK
Diversion
Original Destination NEW YORK
Los Angeles
9

Transportation Functions, Principles,
Participants
Transportation Functions
Transportation Principles
Economy of Scale
Economy of Distance (Tapering Principle)
Transportation Participants
Transportation Regulation
Transportation Industry Structure
Transportation Services

10
Economies of ScaleThe more items (weight) is
transported, the less the transportation costs
per item (unit of weight)
100/book
Transportation Cost per Book
.10/book
1
1000
Number of Books in Shipment
11
Economies of DistanceTapering PrincipleThe
larger the distance, the less the transportation
costs per unit of distance (e.g., per mile)
.10/mile
Transportation Cost per Mile
.05/mile
Tapering Principle
50/mile
1 mile
500 miles
1000 miles
Shipment Distance
12
Ice Sculptures in Harbin, China
13

Transportation Functions, Principles,
Participants
Transportation Functions
Transportation Principles
Transportation Participants
Transportation Regulation
Transportation Industry Structure
Transportation Services

14
Transportation Participants
I need something shipped at the lowest possible
cost!
15
Transportation Participants
I need something shipped at the lowest possible
cost!
I need something delivered at the lowest possible
cost!
16
Transportation Participants
Carriers We have the equipment!
17
Transportation Participants
Carriers we can find a shipper! Shippers we
can find a carrier!
18
Transportation Participants
the transportation system is vital for the
countrys economic health
19
Transportation Participants
purchase fuel, transportation equipment, supplies
20
Transportation Participants
track shipments
purchase fuel, transportation equipment, supplies
21
Transportation Participants
track shipments
purchase fuel, transportation equipment, supplies
match products needing to be shipped with
available capacity
22
Transportation Participants
Creates demand for transportation by purchasing
products
23

Transportation Functions, Principles,
Participants
Transportation Regulation Transportation Industry
Structure
Transportation Services

Transportation Functions, Principles,
Participants
Transportation Regulation
Types of Transportation Regulation
History of Transportation Regulation
Transportation Industry Structure
Transportation Services

Transportation Functions, Principles,
Participants
Transportation Regulation
Types of Transportation Regulation
History of Transportation Regulation
Transportation Industry Structure
Transportation Services

26
Types of Transportation Regulation
Economic

Investments in transportation infrastructure
(e.g., highways, airports, ports)
Control of routes, pricing, schedules

27
Types of Transportation Regulation
Economic

Investments in transportation infrastructure
(e.g., highways, airports, ports)
Control of routes, pricing, schedules

Social/Safety

Protect the public, the environment
Make sure equipment operates safely, cleanly
Safe transportation of hazardous materials
(HAZMAT)
Regulating hours worked

Transportation Functions, Principles,
Participants
Transportation Regulation
Types of Transportation Regulation
History of Transportation Regulation
Transportation Industry Structure
Transportation Services

29
History of Transportation Regulation

Pre-1920 establish initial government control
Act to Regulate Commerce (1887)
Interstate Commerce Commission (ICC)

30
History of Transportation Regulation

1920-1940 regulatory formalization, extension
to other transportation modes
Motor Carrier Act (1935)
Civil Aeronautics Act (1938)
Civil Aeronautics Board (1940)
Federal Aviation Administration (FAA)
National Aeronautics Space Administration
(1951)

31
History of Transportation Regulation

1940-1970
Regulation of water transportation by ICC (1940)
Railroad Revitalization and Regulatory Reform Act
of 1976
AMTRAK
CONRAIL

32
History of Transportation Regulation

1970-1980 prelude to deregulation
Shift from regulation/control to fostering
competition
Department of Transportation (DOT) 1961
Airline Deregulation Act 1978

33
History of Transportation Regulation

1980-2000 deregulation
Motor Carrier Act 1980
Staggers (Rail) Act 1980
Interstate Commerce Commission (ICC) abolished
1996
Ocean Shipping Reform Act 1998

34
History of Transportation Regulation

2000-Present focus on technology, safety, and
security
Patriot Act
Jones Act

Transportation Functions, Principles,
Participants
Transportation Regulation Transportation Industry
Structure
Transportation Services

36
Five Basic Transportation Modes
Pipeline
37
Five Basic Transportation Modes
Pipeline
Water
38
Five Basic Transportation Modes
Pipeline
Water
Air
39
Five Basic Transportation Modes
Pipeline
Water
Air
Rail
40
Five Basic Transportation Modes
Pipeline
Water
Air
Rail
Highway
41
Domestic Shipments by Mode and Volume
42
Domestic Shipments by Mode and Revenue
43
Aurora Borealis - Yukon
44
Cost Structure For Each Transportation Mode
Rail

high fixed costs (land, tracks)
low variable costs (operating costs, e.g.,
labor, fuel)
slow, but inexpensive way to transport heavy
freight that doesnt require special handling,
long distances

45
Cost Structure For Each Transportation Mode
Highway

low fixed costs (government builds, maintains
highways)
medium-high variable costs (operating costs,
e.g., labor, fuel)
most accessible mode (more highways than
railroads, waterways, pipelines) best for
transporting medium to high value products short
to moderate distances

46
Highway

LTL less than truckload
TL truckload
Specialty

47
Cost Structure For Each Transportation Mode
Water

moderate fixed costs (ships and freight handling
equipment)
low variable costs (operating costs, e.g.,
labor, fuel)
very slow, but inexpensive way to transport
large, heavy freight over long distances (e.g.,
oceans, rivers, inland waterways, lakes)

48
Cost Structure For Each Transportation Mode
Cost Structure For Each Transportation Mode
Air

low fixed costs (aircraft and freight handling
equipment)
highest variable costs (e.g., labor, fuel,
maintenance)
very fast used for transporting high value
and/or high perishability product over short to
medium distances.

49
Cost Structure For Each Transportation Mode
Pipeline

highest fixed costs (right of way construction
costs of equipment)
lowest variable costs (no significant labor or
fuel costs)
slow, but dependable (e.g., no weather, traffic
disruptions) no flexibility with regard to types
of products that can be transported must be
liquid (e.g., petroleum)