Chapter 1 The Land Transport of Goods http://www.groupeisf.net/logistique_et_transports/Transport/3/Modul ...

Chapter 3 Economics and pricing of road transport 3.1 The price formation of a transport The pricing of transport by road is a complex operation that must be made in mar kets where buyers and sellers do not have the same weight: Small carriers have l ittle means to calculate their costs in this complex area; They are often forced to accept inadequate transport prices for example they would do what would othe rwise return to empty the casual buyer of transport is better protected in an ar ea that does not know and where competition on certain routes is often imperfect . The states have tended to closely regulate the public transport of goods as th ey regulate public passenger transport. This was the case in France until 1989. The regulations of the United States in this area is extremely complex, despite a trend towards liberalization. The pricing of transport may result from a publi c tariff Examples: - Required Fees Road transport more than 3 tons compulsory in France until 1989 - "common carriers" in the U.S., open to all carriers world a public tariff approved a tariff attached to a framework contract between a carr ier and a charterer of a tariff proposed by a carrier to its customers for servi ces determined on specific geographic areas Example: messaging rates a price mad e the trip after negotiation Example: contract concluded on the spot market Tele route Lamy The pricing problem is a central problem of road transport. See § 6. 5 of chapter 6 of "Logistic Techniques and Implementation" (Y. Pimor) 1 20 11/08/2008 7:47 p.m. Chapter 1 The Land Transport of Goods http://www.groupeisf.net/logistique_et_transports/Transport/3/Modul ... 3.2 General principles of road pricing This is the price of transportation called "industrial batches" and not the pric e of the e-mail in addition to traction costs should bear the costs of platforms and tours, handling, organization and time often requirements specified in the contract mail - which does not always meet the trucks for hauling. The price of the contract than truckload industry should not make them profitable transport b ut the journey of the truck including its return. To go or return, loading a tru ck is composed mostly of different batches. Each batch requires loading and unlo ading and two special trips to and arrival. The unit price per tonne for example will be even higher than the lot is less important. If the time required is rel atively long, it will be easier to fill the truck while waiting for other lots. It is the role of commissioners or "freight grants" to gather lots to allow smal l carriers to fill their trucks, the agent taking some of the savings. The point s of departure and arrival determine travel from one area to another. Depending on the size of cargo and back and the season, it will be more or less easy to im prove the load factor on the outward and return journeys. These points also dete rmine the distance, and therefore the travel time by taking into account the man datory rest time for the driver. The determination of a tariff from such element s requires rigorous methods of calculating costs. Question 1: What determines th e total duration of a trip and what cost elements of the transporter is the dura tion? 2 of 20 11/08/2008 7:47 p.m.

Chapter 1 The Land Transport of Goods http://www.groupeisf.net/logistique_et_transports/Transport/3/Modul ... 3.3 The operating account of the motor carrier The data above have been made by the Observatory of the National Committee for R oad Transport of lots. They are updated each quarter. We can try to reduce the o verall costs of road transport costs and daily costs per km considering the form er as fixed costs and semi-fixed costs, including the cost of the driver as a se mi-trailer with no driver was not very useful .. It says everything that can spr ead to km: structural costs, financing, insurance, etc..€The cost of fuel and t ires are so variable costs which are added repair costs and toll that can be rep orted in kilometers. 3 of 20 11/08/2008 7:47 p.m. Chapter 1 The Land Transport of Goods http://www.groupeisf.net/logistique_et_transports/Transport/3/Modul ... Question 2: What is the average cost of a trip from the data above? 4 of 20 11/08/2008 7:47 p.m. Chapter 1 The Land Transport of Goods http://www.groupeisf.net/logistique_et_transports/Transport/3/Modul ... 3.4 How to build a tariff? How to determine the cost of a trip? You can simply apply the method of the Nati onal Road (RSS) Cv = a + b with D: D = distance in nb. km is the cost per km b, a coefficient for fixed costs For example: Cv = 432.2 K + 0.34 euro after data f rom the CNR (sept.2001) noting: No one has retained only one trip per day, which is not always the case, there is no equivalence between the number of days of u se of vehicle per year and the number of working days per year of the driver. Th ere is a more elaborate method from the same data, the method presented in the G uide transportation costs Lamy. How to divide this cost among the lots in terms of tonnage, taking into account a fixed amount per batch (loading, unloading, ap proach, etc.)? It distributes the costs of travel between the various lots in pr oportion to the tonnage from coefficients proposed by the NRC, factors that lead to apportion the cost of travel by a factor (0.037 T + 0.258) where T = number of tons of Lot . We could discuss these coefficients whose calculation is unknow n but they are fairly commonly accepted by the profession. We then have: Cv = Cl (T c + d) with Cl = Cost of travel for a lot T = number of tons of Lot C, weigh t proportional to the number of tons of batch, batch coefficient The result with this principle of "shared journey": Cl = (a D + b) (c T + d) or C = a + b 'D +' s T + d 'DT 5 of 20 11/08/2008 7:47 p.m. Chapter 1 The Land Transport of Goods http://www.groupeisf.net/logistique_et_transports/Transport/3/Modul ...

3.5 Example of costs Truckload The above formula was calculated using data from the Reference Tariff Road (TRR) of the National Road (1997). This formula was used to calculate the scale below which has excellent correlation with the rate of RSS in the same period. This r ate is no longer mandatory since 1989 but the NRC has continued to serve as the calculation basis for negotiation carriers and shippers. The price actually char ged were also well below that rate which is due to the intense competition betwe en carriers and the value of some coefficients used. We see that rate calculated for a set of 40T of PTRA and semi tractor with 3 axle according to an analytica l method, corresponds to the formula of the journey shared. The NRC has relinqui shed to calculate these rates from 2001 but the method is still used is based on statistics of the CNR, or, preferably, from its own accounting. The price might appear as: Tons km 0 0 1 2 3 4 5 359.02 410.51 564.98 616.47 462 513.4 100 731 568.02 649.51 812.49 893.98 975.47 777.02 888.51 1000 200 1111.49 1222.9 8 1334.47 1127.51 986.02 1269 300 1410.49 1551.98 1693 47 400 1195, 02 1366.51 1 709.49 1880.98 2052.47 1538 500 1404.02 1605.51 2008.49 2209.98 2411.47 1807 The line and column 0 have no meaning for the tariff but the coefficient a 'of 359. 02 f corresponds to fixed costs for delivery. These rates show the characteristi c shape of a choice when they are represented as 6 20 11/08/2008 7:47 p.m. Chapter 1 The Land Transport of Goods http://www.groupeisf.net/logistique_et_transports/Transport/3/Modul ... above. 7 of 20 11/08/2008 7:47 p.m. Chapter 1 The Land Transport of Goods http://www.groupeisf.net/logistique_et_transports/Transport/3/Modul ... 3.6 The massification of Transportation The Reference Tariff Road (TRR) was established as there are costs per kilometer decreases as the number of miles the trip was longer and the price per tonne ev en lower than the number of tonnes was important. This is normal given the fixed charges for mileage and cost approach and loading-unloading lot. It follows tha t the shipper should always seek to consolidate lots. 8 of 20 11/08/2008 7:47 p.m. Chapter 1 The Land Transport of Goods http://www.groupeisf.net/logistique_et_transports/Transport/3/Modul ... Question 3: What would the cost per tonne km transported 100 km with a shipment of 1O tonnes and carried a ton over the same distance with a consignment of thre e tonnes according to the formula above?

9 of 20 11/08/2008 7:47 p.m. Chapter 1 The Land Transport of Goods http://www.groupeisf.net/logistique_et_transports/Transport/3/Modul ... 3.7 "travel distributed" to the standard presentation of charges ... The standard rates were calculated as the TRR or are currently carriers occur mo st often as above with weight ranges and mileage and a price per tonne at the in tersection of each slice. It did not represent all segments of kilometers lack o f space. To calculate the cost of shipping a lot, is multiplied by the number of tons involved the price per tonne of column equal to this size, or if the colum n immediately below the tonnage. Thus 12 tonnes transported 128 kilometers will cost 12 x 144.00 = 1728. The distances to be considered are the distances but re al "rate distance" between the two areas of classification provided by a documen t called "distance". 3.8 The price areas 10 of 20 11/08/2008 7:47 p.m. Chapter 1 The Land Transport of Goods http://www.groupeisf.net/logistique_et_transports/Transport/3/Modul ... The selling price of the trip may be assigned a weighting to reflect the difficu lty that one may encounter in finding return cargo; certain relations, it can be especially difficult to find freight and it affects the selling price to travel by a factor of 10% and for this, France has been divided in 632 zones, some are as classified as tariff No. 2 were considered to have a balance between incoming and outgoing cargo and there therefore applies the normal tariff, while others are regarded as having an imbalance of outgoing traffic and the carrier may ther efore have difficulty in finding return loads: these areas of destination of the journey have a fee that no one affected by a coefficient of 10% more to compens ate for this disadvantage, these areas are determined from a table of locations such as DICOROUTE of LAMY. 11 of 20 11/08/2008 7:47 p.m. Chapter 1 The Land Transport of Goods http://www.groupeisf.net/logistique_et_transports/Transport/3/Modul ... 3.9 The rule of "pay for" When the tonnage to transport occurs between two weights, one can take either th e rate of weight below or above the rate of weight to "pay for" the greater weig ht in its tariff, if the amount of this higher weight of the slice following is more interesting. This is called the rule of "pay for". Otherwise we might wish to complete the load with pebbles or anything to reach the most interesting port ion of costs ...

12 of 20 11/08/2008 7:47 p.m. Chapter 1 The Land Transport of Goods http://www.groupeisf.net/logistique_et_transports/Transport/3/Modul ... Question 4: You want to carry 22 tons of 129 km Tariff No. 1 according to the sc ales presented in the previous views, how going to pay? 13 of 20 11/08/2008 7:47 p.m. Chapter 1 The Land Transport of Goods http://www.groupeisf.net/logistique_et_transports/Transport/3/Modul ... 3.10 "Weights taxed" The constraints of a truck load vary cargo: Weight: Payload = GVW - Weight The f loor area 2.5 m x 13.5 m for a standard semi-trailer price often linear meter vo lume to Use rates: Either you prices per linear meter, Let it transforms other u nits by weight using the coefficients, called system of "weight taxed" Example: a range = minimum chargeable weight of 400 kg or chargeable weight the "burden" to "roll" in m3, etc.. Either one uses a "tariff list of all products with a coe fficient specific to each (U.S.) Question 5: You want to load 30 pallets 80x120 each weighing 600 kg in a standar d semi trailer load 25 tons how can we save? How do we pay the price with 2 earl ier for a trip of 355 km? How would we pay for pallets, each weighing 250 kg wit h a chargeable weight of 450 kg per pallet? 14 of 20 11/08/2008 7:47 p.m. Chapter 1 The Land Transport of Goods http://www.groupeisf.net/logistique_et_transports/Transport/3/Modul ... 11.3 Passing by carrier platforms In practice, in many cases, the transport of lots are divided into several segme nts of travel with passages platforms including unloading, sorting,€reclusterin g and reloads: often the one to pick, another for the actual transport and anoth er for distribution. It is the general case for messaging but also often the cas e for transport of lots to do more or less than 3 tons, according to the old dis tinction. For example in the diagram above, the originator requests transport to three platforms distributors sufficiently distant from each other so that the c arrier can be transported in the same vehicle. We therefore consider three diffe rent lots and for reasons of cost carrier will take these three lots at the plan t with the same truck and on its own platform not too far from the plant would b e shared among three trucks will carry journey with other goods from other outso urcers. 15 of 20 11/08/2008 7:47 p.m.

Chapter 1 The Land Transport of Goods http://www.groupeisf.net/logistique_et_transports/Transport/3/Modul ... 3.12 The consolidated loads If the three platforms were not too remote distributor so that the three batches can be transported in the same truck, we would then have the diagram above. The re may be more a passage through the platform of the carrier would only serve to complete the load with other goods. The customer would then pay the entire jour ney from his factory to the X platform and from there to the platform Y and fina lly Z platform for all lots. This is called "packages bundled" and under the ter ms of the RRT, it is always possible for the payer to make two calculations to c hoose the cheapest. The same technique is used when batches of the same payer to take different institutions to be transported in the same place. 16 of 20 11/08/2008 7:47 p.m. Chapter 1 The Land Transport of Goods http://www.groupeisf.net/logistique_et_transports/Transport/3/Modul ... 3.13 Additions billing The following benefits can be applied to the carrier and justify a premium price to be provided under the contract of carriage (transport order: see below). the receipt or delivery against payment charge of loading or unloading of vehicles when they are not normally charged to the carrier (see below) capital costs of v ehicle when such downtime under the contract or contract Model loading and unloa ding are exceeded, new home presentations where the goods have been delivered at an initial presentation by the fault of the recipient statement of value or spe cial interest in delivery increases the limit responsibility of the carrier etc. . 17 of 20 11/08/2008 7:47 p.m. Chapter 1 The Land Transport of Goods http://www.groupeisf.net/logistique_et_transports/Transport/3/Modul ... Chapter Summary Economics and pricing of road The road transport pricing depends on many factors which concentrates on the ana lytical accounts of the carrier. These accounts are subject to frequent changes with changes in fuel prices or the social rules and are often controlled by eg m any small carriers. The governments who controlled prices until the late 80s, ha ve moved away. If prices remain at market prices, particularly for transport spo t, many carriers apply contract rates in France and whose methods of calculation and presentation of the former CNR reference pricing are unique and indispensab le part of knowledge fo shippers and carriers. They retain their very strong reg ressivity in the number of kilometers of the relationship and tons me or linear loading. Rules like that of "pay for", the "weight taxed, grouped in", "statemen ts of value", etc.. Are representative of this rapid evolution in the developmen t of European Courier. To which you must answer e-mail to your tutor (20 lines t o several pages!) as soon as you finish this chapter: "If you were a motor carri er, how would you go you to build a transmission tariff? " Answers:

Answer 1: Travel time depends on: distance, nature of roads and highways to ensure that ro ute (speed limits, congestion, etc.): several intineraries is often possible;€d riving times resulting distances since drivers must meet a number of rules on dr iving times and rest periods (maximum of 4:30, except daily hours from 9 am two days a week, etc..) time loading and unloading from the circumstances with the s tatutory limits on waiting times (standard contract). This travel time determine s the share capital of the vehicle, tractor-trailer, in an accounting sense - an d the journey must bear part of its depreciation, the share of overhead costs as sociated with operating the vehicle: insurance premiums, taxes, etc.. the cost o f the driver during this time, the total annual cost including social charges, c ompensatory rest, etc.. paid holidays and reduced the cost per hour of work. The mileage determines the cost of fuel, tires, maintenance, etc. Back 18 of 20 08/11/2008 7:47 p.m. Chapter 1 The Land Transport of Goods http://www.groupeisf.net/logistique_et_transports/Transport/3/Modul ... Answer 2: We can consider that for 186 trips per year on total expenses of 80 392.5 + 42 = 123 644.7 037.2 ⠬, the average travel cost is then to ⠬ 661.49. Could determine a formula to calculate the cost of a journey on the basis of 235 days / year an d 125,440 km / year, with: Cv = 342.1 K with J + 0.34 J is the number of days of travel and K the number of miles or in recital 186 trips / year to ⠬ 80,392.5, or ⠬ 432.2 per trip: Cv = 432.2 + 0.34 K Back Answer 3: The cost to Cd distance is 8.12 D + 2 = 1391.54 f 203.54 for 100 km the cost per tonne of Cd (0.037 + (0.258 / T)) = 2 203.54 (0.037 + (0.258 / 3)) = 271.04 per ton to 3 tons of 100 km or 2.71 per km f = 2 203.54 (0.037 + (0.258 / 10)) = 13 8.38 Toma for 10 100 tonnes f 1.38 km per km or about half Back Answer 4: With the column "20T" on line "126-130 miles", there is a price per tonne of 114 .9 f which makes for 22 T: 22 * 114.9 = 2527.89 With the column "23T" line 126-1 30 km, "there is a rate of 109.3 per tonne f which makes for 23 T: 23 * 109.3 = 2513.90 With the rule of" pay for "you may pay 2513, 90 * 1.1 because it is the price for No. 1 is increased by 10%, which would 2765.29 f. Back Answer 5: The available area is 250 x 1350 cm, which 240) and 11 in length (120 x 11 = 1320) or total weight of 30 x 600 = 18 Tons. Price The price "paid for 20 tonnes" would be 20 19 of 20 11/08/2008 7:47 p.m. Chapter 1 The Land Transport of Goods http://www.groupeisf.net/logistique_et_transports/Transport/3/Modul ... With vanes having a chargeable weight of 450 kg, will be a chargeable weight of 0.45 x 30 = 13.5 T and it will pay 13.5 267.7 x 3 = 613.95 but we prefer to pay for 15 tons or 230.4 3456 f. Return allows for 3 pallets front (80 x 3 = a total of 33 so we can load 30 for a for 355 km = 18 x 230.4 = 4147.20 f. x 213.7 = 4274 and therefore higher.

20 of 20 11/08/2008 7:47 p.m.