Chapter 5: Transport in supply
chains
1. Characteristics of the different transport modes
Selecting different transport modes
A function of:
- The volume & value of the freight
- The distance travelled
- The availability of different services
- Freight rates to be charged, etc.
Logistics service providers (LSP’s) usually apply volumetric charging
- Based on consignment dimensions
Relationship between rate & distance
Relationship between rate & weight
no simple linear relationship
regardless how short the distance or how low the
weight the service provider will need to recover
certain fixed costs
for bulky or difficult to handle shipments, LSP’s
(logistic service providers) will apply volumetric
charging based on the dimensions of the
consignment
- to compensate for lost capacity
- instead of charging per weight or distance
HOW TO CHOOSE THE RIGHT TRANSPORT MODE?
Compare fixed costs vs variable cost
Operating characteristics
- Speed: average time needed to cross distance
- Availability/frequency: at what frequency can the means of transport be deployed?
, - Dependability/variability: the possibility of the transport beginning and/or ending on an
agreed time
- Capability/practicability: to what extent can a modality be used for the most diverse types
of goods in the most extreme size/weight
- Accessibility: can the mode of transport reach ALL places
- Risk: cargo damage or loss
- Environment impact: how environmentally friendly is the mode of transport (in comparison
with other models)?
5 transport modes
RAIL
Possible for big volumes
Longer distances
Heavy loads
Fixed departure and arrival schedule fixed time slots and book long in advance
Possible for hazardous substances
Environmentally friendly
No traffic jams
Can be expensive due to limited competition of the ownership of infrastructure
Not flexible in terms of pickup and destination location
Steel and chemicals
ROAD
Fast
Door-to-door
Flexible
Reliable
Not very expensive (both fixed & variable costs)
But:
- Toll (kilometre charging system)
- Congestion: traffic jams
- Limited capability (max 44 tons)
- Legal requirements on driving and resting time
chains
1. Characteristics of the different transport modes
Selecting different transport modes
A function of:
- The volume & value of the freight
- The distance travelled
- The availability of different services
- Freight rates to be charged, etc.
Logistics service providers (LSP’s) usually apply volumetric charging
- Based on consignment dimensions
Relationship between rate & distance
Relationship between rate & weight
no simple linear relationship
regardless how short the distance or how low the
weight the service provider will need to recover
certain fixed costs
for bulky or difficult to handle shipments, LSP’s
(logistic service providers) will apply volumetric
charging based on the dimensions of the
consignment
- to compensate for lost capacity
- instead of charging per weight or distance
HOW TO CHOOSE THE RIGHT TRANSPORT MODE?
Compare fixed costs vs variable cost
Operating characteristics
- Speed: average time needed to cross distance
- Availability/frequency: at what frequency can the means of transport be deployed?
, - Dependability/variability: the possibility of the transport beginning and/or ending on an
agreed time
- Capability/practicability: to what extent can a modality be used for the most diverse types
of goods in the most extreme size/weight
- Accessibility: can the mode of transport reach ALL places
- Risk: cargo damage or loss
- Environment impact: how environmentally friendly is the mode of transport (in comparison
with other models)?
5 transport modes
RAIL
Possible for big volumes
Longer distances
Heavy loads
Fixed departure and arrival schedule fixed time slots and book long in advance
Possible for hazardous substances
Environmentally friendly
No traffic jams
Can be expensive due to limited competition of the ownership of infrastructure
Not flexible in terms of pickup and destination location
Steel and chemicals
ROAD
Fast
Door-to-door
Flexible
Reliable
Not very expensive (both fixed & variable costs)
But:
- Toll (kilometre charging system)
- Congestion: traffic jams
- Limited capability (max 44 tons)
- Legal requirements on driving and resting time
