Lecture 1 - transportation processes
Transportation processes - roles and actors
Role: the movement of products from one location to another while overcoming physical
constraints (distance, time and administrative boundaries)
Actors:
- Shipper
- Carrier
- Infrastructure
- Bodies that set transportation policy
Trends in transportation
- Increasing demand
- Infrastructure expansion
- Decreasing costs
Effects of these trends
● Spatial differentiation: transport routes link resource-rich areas to those in need
● Economic impact: transportation is crucial for global and regional economies → influences
resource distribution and economic activites
● Invisibilyt & efficiency: efficient transport systems are often invisible to consumers
● Disruption consequences: when transportation is dirsupted, the effects are immediate and
severe (halted production, empty shelves and stalled services)
→ Consequences like immediate disruptions, cascading delays, increased costs and rerouting
,Modal choice: achieve the best trade-off between transportation costs and value of time
→ value of time = quantity*value per unit*interest rate*time
,Intermodal transportation
- Each mode has unique advantages
- Demand requires flexibility through integrated transportation systems
- Use of more than one transportation mode to move a shipment
- Grown considerably with increased use of containers
- May be the only option for global trade
- Gateways like ports and rail terminals facilitate the transition between modes
Design options for a transportation network
→ aim: low cost and high responsiveness
1. Should transportation be direct or through an intermediary site?
2. Should the intermediate site stock product or only serve as a cross-docking location?
3. Should each delivery route supply a single destination or multiple destinations (milk run)?
, Direct shipment network to single destination
● The routing of each shipment is specified
● Decisions
○ Quantity to be shipped
○ Transportation mode
● Advantages
○ No intermediate warehouses
○ Simple
○ Short transportation time
● Constraint
○ Each buyers demand needs to be large
enough (close to Truck Load)
Direct shipping with milk runs
● From single supplier to multiple buyers
(or vice versa)
● Decision
○ Routing or each milk run
○ Transportation mode
● Advantages
○ No intermediate warehouses
○ Consolidation → lower costs
● Constraint
○ Buyers (or suppliers) need to be
close enough
Shipments via distribution center with storage
● Large shipments inbound or coordination
issues for outbound shipments
● Large quantities into a DC
● Small quantities to buyers when needed
● Advantages
○ Economies of scale for inbound logistics
○ Products closer to the point of
consumption
● Constraint
○ DC should be close to buyer locations
Transportation processes - roles and actors
Role: the movement of products from one location to another while overcoming physical
constraints (distance, time and administrative boundaries)
Actors:
- Shipper
- Carrier
- Infrastructure
- Bodies that set transportation policy
Trends in transportation
- Increasing demand
- Infrastructure expansion
- Decreasing costs
Effects of these trends
● Spatial differentiation: transport routes link resource-rich areas to those in need
● Economic impact: transportation is crucial for global and regional economies → influences
resource distribution and economic activites
● Invisibilyt & efficiency: efficient transport systems are often invisible to consumers
● Disruption consequences: when transportation is dirsupted, the effects are immediate and
severe (halted production, empty shelves and stalled services)
→ Consequences like immediate disruptions, cascading delays, increased costs and rerouting
,Modal choice: achieve the best trade-off between transportation costs and value of time
→ value of time = quantity*value per unit*interest rate*time
,Intermodal transportation
- Each mode has unique advantages
- Demand requires flexibility through integrated transportation systems
- Use of more than one transportation mode to move a shipment
- Grown considerably with increased use of containers
- May be the only option for global trade
- Gateways like ports and rail terminals facilitate the transition between modes
Design options for a transportation network
→ aim: low cost and high responsiveness
1. Should transportation be direct or through an intermediary site?
2. Should the intermediate site stock product or only serve as a cross-docking location?
3. Should each delivery route supply a single destination or multiple destinations (milk run)?
, Direct shipment network to single destination
● The routing of each shipment is specified
● Decisions
○ Quantity to be shipped
○ Transportation mode
● Advantages
○ No intermediate warehouses
○ Simple
○ Short transportation time
● Constraint
○ Each buyers demand needs to be large
enough (close to Truck Load)
Direct shipping with milk runs
● From single supplier to multiple buyers
(or vice versa)
● Decision
○ Routing or each milk run
○ Transportation mode
● Advantages
○ No intermediate warehouses
○ Consolidation → lower costs
● Constraint
○ Buyers (or suppliers) need to be
close enough
Shipments via distribution center with storage
● Large shipments inbound or coordination
issues for outbound shipments
● Large quantities into a DC
● Small quantities to buyers when needed
● Advantages
○ Economies of scale for inbound logistics
○ Products closer to the point of
consumption
● Constraint
○ DC should be close to buyer locations
