1.
Transportation in Supply
Chain Management

2.
Introduction of Transportation
• Transportation is an indicator which measures the economic, social
and commercial progress of a country
• This is the most visible part of Logistics Operation
• It shares significant portion of the total supply chain cost

3.
Why transportation
• Transportation is backbone of logistics
• effective transport is vital for:
• achieving economic and social objectives
• direct benefits to people
• direct benefits businesses
• the economy overall
• support innovation
• help people access jobs, and
• attract new firms
• Having more control over transport reduce uncertainty
• ensuring integration of transport, economic development and
infrastructure.

4.
Evolution Of Transportation System
• Various Modes of Transportation from the early civilization but
capacity and speed were the constraints of that mode
• With advent of Industrial Revolution, resultant in development of four
main modes of transportation
• Road
• Rail
• Air
• Sea (Water)

5.
Transportation Infrastructure
• Serves two purpose- one is product movement and other is In-transit
product storage
• Movement is subjected to availability and accessibility to
infrastructure
• The guiding principle for choosing the transportation mode is the
least cost per unit weight / volume of the product moved over the
unit distance

6.
Transportation Infrastructure
Road
• One of the promising mean
• Suitable for short and medium distances where other means are
unable to reach
• It provides door to door service which is not possible with others
• Connects trade and commerce of rural areas with urban markets

7.
Transportation Infrastructure
Railways
• Main source of supplying essential commodities, transporting them
through length and breadth of the country
Sea
• The shipping industry is divided into several parts such Liner Service,
Tramp Shipping, Industrial Services and Tanker Operations
• The shipping fleet across the world comprises tankers, dry bulk carrier,
container ships and special vessels
Air
• Compared to all other modes, air transport is less hazardous in nature
• Air transportation is a costly affair and used for highly perishable
commodities & items whose life is short and value is high

8.
Transportation Infrastructure
Inland Water Transportation (IWT)
• IWT is an eco-friendly transportation system comprising rivers, lake and channel
• IWT offers flexibility and cost effective mode of transportation
• It is less vulnerable and fuel economical
Pipelines
• Pipeline as a mode of transportation was first developed in 1870 by Samuel for transporting
petroleum
• The basic advantage of pipeline is, it reduces operational cost but initial investment is high
• It is also an eco-friendly transportation mode
Ropeways
• This type of mode is used for hilly areas
• Also bulk material can be moved quickly over short distances

9.
Freight Management
• The selection of transportation mode depends on the product
characteristics and customer service requirements
• Cost, speed and reliability are the most important factors to select
from the available transportation options
Speed And Availability Of Services
• Time taken to move products from one facility to another and finally
to the customers
• In some cases, speed is a major constraint in speedy delivery where
necessitates the usage of Inter-modal transportation system

10.
Inter-modal transportation system

11.
Freight Management
Reliability
• The ability of the carrier to deliver the shipment in good condition in
stipulated time manner
Capability
• It is defined as the ability of a carrier to accommodate the cargo in size,
weight and quantity for transportation
• In such movements, special arrangements are required to handle the
products
Frequency
• Refers to the number of schedule movements of the carrier between pairs
of location

12.
Factors Influencing Freight Cost
• The objective is to achieve reduction in freight cost. Freight cost is
influenced by the following factors
Volume
• With the economy of scale, the cost of operations is distributed over
large volumes resulting into lower per unit cargo movement
• Emphasis of using Full Truck Load (for the same cost)
Distance
• The variable cost is directly proportional to the distance covered by
the vehicle irrespective of the load carried

13.
Factors Influencing Freight Cost
Product Density
• The freight cost depends on the weight per unit volume of product
Product Shape
• The size and shape of the product pose difficulty in handling and also affect the speed of its movement
• For such heavy payloads, trailer are deployed along vehicle and costs heavy
Product Handling
• For managing cargo of odd shapes, require special arrangements that increase overall transportation cost
Product Type
• Perishable items, pharmacy products and temperature sensitive products required especial transportation
arrangement
• Such Products attract additional transportation charges
Besides, the factors above, Market Dynamics plays a pivotal role in deciding the cost

14.
Transportation Networks
Point to Point Networks
• Quite common for long distance
• Point of Origin and Destination is fixed
Multiple Delivery Networks
• This type of operations is used for round trip with multiple pick-ups and
drop points
Trans-Shipment Networks
• Trans-shipment points are two local are networks having a common point
where loading and unloading takes place for freight consolidation or break-
bulk. Example is Distribution Center

15.
Transportation Networks
Nodal Networks
• These types of networks are used for multi-modal transportation
system and include multi-stops trans-shipment pickup and delivery
Hub And Spoke Networks
• Hub and spoke network arrangement is like a hub and spoke of the
wheel
• The Hub acts like a central feeder points to the distribution centers

16.
Route Planning
• For conservation of fuel and time resources, route planning exercise is
of utmost importance
• Route planning may be Advisory or Statutory
• Advisory routes are those with less operational problems. They are
connected to the markets. They offer immense return freight business
• Statutory routes are those which legally prohibit the truckers to use
the routes other than designated routes. They are made for specific
material movement
• The general plan is to make the transportation at the lowest possible
cost without compromising speed and reliability

17.
Logistics Solutions
• There are some organizations from the transportation segment
offering timely freight services across the length of the country
• The other segment is warehouse service providers
• The clearing and forwarding agents are expert in Import / Export
Cargo operations
• All segments have expertise in their domain ; however, lacks holistic
solution
• The task of integrating various segments to provide a comprehensive
service from a single window is known as Logistics Solutions

18.
10 tips on to reduce logistics costs
1. Understand the true costs of sourcing overseas
2. Focus on eliminating the variability from transit times
3. Tariff engineering
4. Consolidate
5. Informed decision-making
6. Sometimes insurance doesn’t pay
7. Automate complianceprocesses
8. Control your express shipping costs
9. Planes, trains and automobiles
10. Be aware of non-tariff trade barriers

19.
Understanding the impact of transportation

20.
Key points
01 Introduction
02 Transportation role as a supply chain driver
02 Components of Transportation decisions

21.
Introduction
• Transportation strategy in tune with the overall supply chain
strategy.
• Facility, inventory, and transportation are inter-related decisions.
• It provides opportunity for growth in the competitive
environment.
• Moves the product between stages in the supply chain.
• Impact on responsiveness and efficiency
• Creating time and place utility

22.
Transportation role as a supply chain driver
Supply Chain Driver Responsiveness Efficiency
Transportation Frequent shipments
Fast and flexible mode
Few large shipments
Slower and cheaper modes

23.
Components of Transportation decisions
• Design of transportation network
• Choice of transportation mode

24.
Reference:
• Principles of Supply Chain Management- A balanced approach( J.D. Wisner, G.K
Leong, Keah-Choon Tan).
• Strategy, Planning, and Operations (7th Edition, Sunil Chopra)

25.
Role of Transportation in
supply chain
Legal forms of transportation

26.
Legal Forms of Transportation-
Transportation service companies are classified legally as either
common, contract, exempt, or private carriers.
• Common carriers
• Contract carriers
• Exempt carriers
• Private carrier
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27.
Common carriers
Common carriers- offer transportation
services to all shippers at published rates
between designated locations without
discrimination.
27

28.
Contract carriers
Contract carriers- not bound to
serve the general public. Contract
carriers serve specific customers
under contractual agreements.
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29.
Exempt carriers
Exempt carriers- exempt from
regulation of services & rates & if
they transport certain exempt
products like produce, livestock,
coal, or newspapers.
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30.
Private carrier
Private carrier- not subject to
economic regulation & typically
transports goods for the company
owning the carrier.
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31.
Concept of LTL & FTL

32.
Key points
01 Introduction of mode of shipping
02 LTL Shipping – Pros and Cons
03 FTL Shipping – Pros and Cons

33.
Introduction
• The mode of shipping that is best
for you depends on:
• the size of your shipment,
• the budget,
• the sensitivity of the freight,
• and the time frame for delivery.

34.
Less Than truck Load Shipping
PROS CONS
You don’t have to pay for an entire truck when you can share
the cost of one with other shippers
LTL freight may not cover all routes within the country as
volumes may not be available
LTL shipping may suit you whether you are a conglomerate or a
mom-and-pop store
It may not be the best choice for handling sensitive cargo due to
possible multiple handling along the route, as the freight is
being transported from and to multiple terminals
Shipping is possible to various locations around USA and
Canada, and cross-border, with hundreds of carriers offering this
service
It may not be the best choice for guaranteed time-sensitive
cargo as your freight might have to wait a while for carriers to
consolidate cargo on that particular route
Your freight can be secured and safely transported using pallets
or skids
Rates may not be the best for cargo of more than 6-8 pallets,
which may be more cost-effective if shipped as an FTL
It’s a cost-effective transportation option for any cargo less than
6 pallets
Not all carriers offering this service have their own hubs and
they may depend on 3
rd
party hubs, which could increase the
shipment costs

35.
Full Truck Load Shipping
PROS CONS
It’s the best option to handle high value cargo as you will
have a dedicated truck to yourself
Shipments could cost considerably more than LTL freight
It’s the most suitable option for handling sensitive cargo
due to the reduced handling of the goods at transit points
LTL carriers can usually offer better rates than FTL carriers
because of economies of scale and various partnerships
they have with other carriers
It’s a better option if you require guaranteed timely
delivery – you get a dedicated truck which doesn’t need
to wait for consolidation of cargo
FTL carriers may not provide value added services such as
handling services at pickup or delivery points
It’s a cost-effective method of transportation if you have
more than 6-8 pallets to ship
FTL carriers may be restricted in terms flexibility of cargo
movement – e.g. if a truck breaks down and the goods
are stranded
You can get quicker and more accurate rate quotes from
carriers as they may have set rates based on your FTL
weight and locations
FTL shipping does not offer the opportunity for E-
Commerce type of shipments where the volumes may be
smaller and specific to the cargo or business

36.
Reference:
• https://www.freightera.com/blog/ltl-vs-ftl/

37.
Role of Transportation in
supply chain
Role of containerization in
transportation

38.
Intermodal container
• An intermodal container is a
large standardized shipping
container, designed and built
for intermodal freight
transport, meaning these
containers can be used across
different modes of transport –
from ship to rail to truck –
without unloading and
reloading their cargo.

39.
Intermodal container (Cont.)
• Intermodal containers are primarily used to store and transport
materials and products efficiently and securely in the
global containerized intermodal freight transport system, but smaller
numbers are in regional use as well.
• These containers are known under a number of names, such as
simply container, cargo or freight container, ISO container, shipping,
sea or ocean container, container van or(Conex) box

40.
Containers Specifications

41.
ULDs - Containers

42.
Role of Transportation in
supply chain
Tracking and Tracing

43.
Tracking and Tracing
• Ability of a supply chain at any given time, to see where something is,
how long it might take to reach a particular destination, and also how
fast it’s traveling is called tracking and tracing.
• Cargo monitoring in real-time to collect reliable data an to improve
visibility
1. Improved Fleet Management.
2. Increased Driver Safety and Performance.
3. Better Security.
4. Enhanced Operational Efficiency.
5. Boosted Customer Service.
6. More Detailed Cost Analysis.
7. Ultimate Transparency.
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44.
Tracking and tracing
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