Transportation Management

• Chapter One: Overview of TM

• Chapter Two: Transportation Decisions
• Chapter Three: Transportation Economics
• Chapter Four: Transport History & Regulations
• Chapter Five: Facility Location Decision
• Chapter Six: Transportation Risk Management
• Chapter Seven: TM Performance Measures
• Chapter Eight: Global Transportation
• Chapter Nine: LSCIS
 Module Objectives
• After completing learning this module you are
expected to:
– Understand & explain the role of transportation in
supply chain
– Explain factors to be considered in transportation
decisions
– Illuminate on the rationale for transportation costing
and pricing
– Indicate the risks related to transportation
– Demonstrate how performance is measured in the
TM area
 Chapter One: Overview of TM

• Introduction
• Transportation functionality
• Role of transportation
• Principles of transportation
• Participants in transportation
• Transportation services
• Transportation management
 Chapter Objectives
• After completing reading this chapter, you
will be able to:
– understand the role of transportation in logistics,
supply chain and business
– describe the principles of transportation
– compare various modes of transport in terms of
strength and limitation
– understand the significance of transportation
(political, economical, historical)
 Introduction
• Transportation is about mobility which is part of our
everyday life
• Transportation is at the heart of logistics
• Transportation is influenced by 6 logistics activities:
– Warehouse location
– Inventory requirements
– Packaging requirements
– Materials handling equipment used
– Customer service goals
 Transportation Functionality
• Product movement
• Storage
 Role of Transportation
• Determines efficiency of moving products
• Connects members of the SC
• Provides utilities- place, time and quantity
• Enables the fulfillment of demand
• Serves as the basis for efficiency and economy
• Reduces operation costs & promote service
quality
 Cont…d
• Historical Significance- help to create social
structure
• Economic Significance- affects population
pattern and urban economic development- place,
time & quantity utility
• Transportation adds utility to goods because
efficient transportation systems promote
geographic specialization, large-scale production,
increased competition, increased market areas,
and increased land values.
 Cont…d
• Environmental Significance
• Social Significance- reaching those in need
• Political Significance
 Cont…d
• Economy of scale in transportation is the cost
per unit of weight decrease as the size of a
shipment increases.
 Transportation Participants
• Shipper
– Factors affecting shippers decisions: transportation costs,
inventory costs, facility costs, processing costs, service level
costs
• Consignee
• Carriers & agents
– Factors affecting carrier decisions: vehicle related costs, fixed
operating costs, trip related costs, quantity related costs,
overhead costs (cost of planning and scheduling a
transportation network and investment in IT)
• Government
• Internet
• Public
 Transport Services
• Line-haul services
• Special services
– Transit privilege
– Protection
– Interlining
– Pickup & delivery
– Break-bulk service
– Consolidation
 Transportation Management
• Transportation management refers to the buying and
controlling of transportation services by either a shipper or
consignee. It deals with safe, efficient, reliable and
sustainable movement of persons and goods over time and
space.
• Functions:
• Equipment scheduling & yard management
• Load planning
• Routing
• Movement administration – requires continuous carrier
performance measurement & evaluation
Chapter Two: Transportation Decisions
• Introduction
• Mode choice
• Carrier choice
• Choosing forms of Ownership
• Legal forms of carriers
• Routing & scheduling
• Freight consolidation
• Trade-offs in transportation decisions
 Chapter Objectives
• After completing reading this chapter, you
will be able to:
– Recommend on factors to consider in mode
selection
– Understand importance of carrier selection
– Recognize the factors to be considered in
choosing forms of ownership
– Describe the various forms of freight consolidation
– Understand the different trade-offs in
transportation decisions
 Introduction
• Transportation is critical for supply chain success. Economic
uncertainty, fluctuating fuel prices, increased safety and
social regulation, escalating customer expectations,
globalization, improved technologies, labor and equipment
shortages, a changing transportation service industry…today’s
managers are faced with an array of challenges and
opportunities that contrast dramatically with those of a
decade ago.
 Integrated Transportation Decisions
• Having an understanding of total SC freight
flows
• Network design
• Mode selection
• Carrier choice
 Modal Choice
• Speed/transit time
• Availability/accessibility
• Dependability
• Capability
• Frequency
• Cargo x-cs (the nature of goods)
• Price
• Security of goods/safety
 Carrier Choice
• Price: COSP, Full cost pricing, VOSP
• Accessibility
• Responsiveness
• Reliability- Core Carrier Concept
• Claims record
 Choosing Form of Ownership
• Operating costs
• Capital costs
• Customer service- provision of acceptable
customer service
• Control
• Flexibility
• Management skills
• Recruitment and training
• Other services
 Legal Forms of Carriers
• Private vs. for-hire carriers
• For-hire carriers: Common, contract & exempt
 Routing & Scheduling
• Concerned with the determination of routes &
schedules for a fleet of vehicles to satisfy the
demands of a set of customers
• Routes, generally, are characterized by:
– The geographical coverage (long, short0
– The demand characteristics (high/low volumes,
service times, etc)
– The degree of dynamism (different/same customers
every day, etc)
– The underlying road network
 Typology
• Petal – each vehicle serves specific customers;
usually used for dispersed customers with LTL
demand
• Radial- each vehicle serves one or a limited
number of customer; used for customers with
large demand
• Peripheral- each vehicle serves a specific
dispersed geographical regions with high
density of demand (commercial areas)
 Routing Policies
• Fixed- the vehicles visit specific areas
(customers) in specific days
• Variable- routes are designed based on the
known demands
• Mixed- both policies are followed by a fleet of
vehicles
 Transportation Network
• Direct shipment- eliminates intermediate
warehouses
• Direct shipping with milk runs
• All shipments via central DC
• Shipping via DC using milk runs
• Tailored network
 Freight Consolidation
• Traditional vs. new approach
• Reactive vs, proactive
– Reactive: Market area, scheduled delivery
– Proactive: Preorder planning, multi-firm
consolidation
Trade-offs in Transportation Decisions
• Managers must consider the following
tradeoffs when making transportation
decisions:
– Transportation and inventory cost trade-off
– Transportation cost and customer responsiveness
trade-off
 Tailored Transportation
• Tailored transportation is the use of different
transportation networks and modes based on
customer and product characteristics. Most
firms sell a variety of products and serve many
different customer segments
• Tailored Transportation by Customer Density
and Distance
Cont…d
 Cont…d
• Tailored Transportation by Size of Customer
• Firms must consider customer size and location
when designing transportation networks. Very
large customers can be supplied using a TL
carrier, whereas smaller customers will require
an LTL carrier or milk runs. When using milk runs,
a shipper incurs two types of costs:
– Transportation cost based on total route distance
– Delivery cost based on number of deliveries
Tailored Transportation by Product
Demand and Value
 Chapter Three: Transportation
Economics
• Introduction
• Transportation Cost Drivers
• Transportation Cost Classifications
• Transportation Cost Related Concepts
• Characterizing Transportation Costs by Modes
• Transportation Optimization
• Carrier Pricing Strategy
 Chapter Objectives:

• After completing reading this chapter, you will

be able to:
– Understand transportation cost drivers
– Characterize transportation mode by costs
– Handle transportation optimization problems
 Transportation Economics
• Covers:
– the factors that drive transport costs,
– the cost structures or classifications,
– carrier pricing strategy, and
– transportation rates and ratings.
 Cost Drivers
• The factors are:
– distance,
– weight (load volume)e.g., transportation scale
economies,
– density,
– stowability,
– handling requirement,
– liability and market factors
 Cost Classifications
• Fixed vs. variable
• Internal/private vs. external/social costs
• Shared vs. non-shared
• Direct vs. indirect costs
• Objective vs. subjective
 Related Concepts
• Economies of scale
• Economies of scope
• Economies of capacity utilization
 Transportation Optimization
• Minimize: Total Transportation Costs (TTC)
• Subject to: Customer Service Policy (CSP)
Requirements
 Carrier Pricing Strategy
• COSP
• VOSP
• Combination
– Fully distributed cost pricing
– Marginal cost pricing
– Discriminatory pricing
 Transport Documents
• Bill of Laing
• Freight bill
• Shipping manifest
• Dock receipt
• Delivery instructions
 Chapter Five Facility Location
Decisions
• Classification of Location Problems
• A historical perspective on location
• Single facility Location
• Multiple facility location
• Appraisal of multiple facility location methods
• Dynamic warehouse location
• Retail/service location
• Other location problems
 Importance of Facility Location
• Facility Location decisions are part of the company’s strategy. Infrequent but
expensive.
• Reasons for the importance:
– Facility Location requires large investment that can not be recovered.
– Facility Location decisions affect the competitive capacity of the company.
• All areas of the company are affected by Facility Location: Operations, but also
Business Development, Human Resources, Finance, etc.
– The facility location decisions affect not only costs but the company’s income:
• For a service business, market proximity is critical to determine the capacity to attract
customers.
• For a manufacturing business, facility location affects product delivery time and level
of customer service, which affects sales.
– Regarding costs, facility location affects a great variety of them:
• Land costs.
• Labor costs.
• Raw materials.
• Transportation and distribution
Causes that originate Location decision problems
– An expanding market.
• It will require the addition of more capacity at a certain geographic point,
either in an existent facility or in a new one.
– Introduction of new products or services.
– A contracting demand, or changes in the location of the demand.
• It may require the shut down and/or relocation of operations.
– The exhaustion of raw materials in a certain area.
• Example: Extraction companies.
– Obsolescence of a manufacturing facility due to the appearance of new
technologies.
• It means the creation of a new modern plant somewhere else.
– The pressure of the competence.
• To increase the level of service, it can force the company to increase capacity
of certain plants or relocate some of them.
– Change in other resources, like labor conditions or subcontracted components,
or change in the political or economic environment in a certain region.
– Mergers and acquisitions.
• Some facilities may appear as redundants, or bad located with respect to
others.
Chapter Six: Transportation Risk Management

– Introduction
– Risk concepts
– Transportation Risk Management Process
– Supply Chain Security
 Introduction
• Freights in-transit are at risk of being stolen or hijacked as
they flows through dangerous trade lanes (Somalia,
Indonesia, Malaysia, India, the Philippines, Brazil & Ecuador)
• Piracy is one of the threats faced when moving goods. Major
incidents- hurricanes, pandemics, labor unrest & terrorism-
create societal problems & significant business challenges
• Threats are disruptive events that result in SC disorder &
discontinuity (minor delays- tremendous problems that
threaten image & financial outlook)
 Cont…d
• There are six common risk categories related to freight
transportation:
– Product loss: theft, jettison, piracy & hijacking
– product damage: equipment accidents, poor freight handling,
improper equipment loading & unloading
– product contamination: climate control failure, pdt tampering, &
exposure to contaminants
– delivery delay: congestion, poor weather & equipment mulfunction
– supply chain interruption: carrier bankruptcy, labor disruptions &
capacity shortages and
– security breach: loose security processes, unprotected transfer
facilities, shipment control failures
Risk Management Process
 Chapter 7: Transportation Management
Performance, Cost, and Value Measures

• Introduction
• Financial Measures of Transportation
Performance
• Productivity Measures of Transportation
Performance
• Quality Measures of transportation Performance
• Cycle Time Measures of Transportation
Performance
 Introduction
• Reasons: accountability, efficiency &
improved communication
• Transportation performance measures fall in
to four categories:
– Financial
– Productivity
– Quality and
– Response time
 Financial Metrics
• Includes total transportation costs and related ratios and
economic values for fleet assets
• Total transportation costs and cost ratios
Expense Capital
Freight, driver/operator wages and Fleet ownership costs, terminal
benefits, fleet leasing, terminal leasing, ownership costs, office space ownership
office lease and utilities, EDI and costs, maintenance facility ownership
telecommunication fees, maintenance, costs, TMS software ownership costs,
third-party transportation fees, fuel, transportation infrastructure ownership
customs brokerage and freight costs
forwarding fees, security, packaging
materials
 Cont…d
• Transportation Asset Economic Value Analysis
• Private fleet operators often underestimate the capital consumption and
economic value generation potential of the fleet.
• Many of manufacturing firms who operate a private fleet overlook the
financial implications of fleet ownership because they are typically so
focused on the manufacturing assets and because their accounting
models are not typically configured to monitor the financial performance
of transportation assets.

Responsiveness Efficiency
Frequent shipment Shipments few, large
Fast and flexible mode Slow, cheaper modes
 Productivity Metrics
• Two types:
– Transportation asset productivity and
– Transportation operator productivity
Transportation Asset Productivity & Utilization

• Two main assets: containers and vehicles

• The utilization of a container must incorporate
the weight and cube utilization since its
capacity is restricted in both dimensions.
• Container Utilization (CU)
– = Max {Cube Utilization, Weight utilization}
– Cube Utilization = Occupied cube/(L*W*H)
– Weight Utilization= Load weight/Container weight
capacity
 Cont…d
• For a load weighing 35,000 pounds and occupying 2,720 cubic
feet in a container with a weight capacity of 44,000 pounds
and a length, width, and height of 40 feet, 8.5 feet, and 9 feet,
the CU is
• Cube utilization 2,720 ft3/(40‘ * 8.5' * 9') =2,720 ft3/ 3,060
ft3 =89%
• Weight utilization 35,000 lbs./44,000 lbs. =79.5%
• CU = Max {89%, 79.5%} 89%
 Cont…d
• Transportation vehicles (trucks, airplanes, locomotives, and ocean vessels)
consume vehicle operating hours (VOH), vehicle available hours (VAH),
and capital investment. The desired outputs for a vehicle include the
number of deliveries, pounds delivered, cube delivered, dollars delivered,
miles traveled, and/or ton-miles delivered. Some helpful output to
consumption ratios are:
• Vehicle utilization = Operating hours/Available hours
• Vehicle yield = Delivered value/Vehicle investment cost
• Deliveries per operating hour
• Ton-miles delivered per vehicle
• Ton-miles per operating hour
• Cube-pounds per mile
• Delivered cube per operating hour
• Delivered pounds per operating
 Cont…d
• Transportation Operator Productivity
• The metrics for transportation operator productivity do not
differ greatly from vehicle productivity because each vehicle
is manned by an operator. The most common bases for
assessing transportation operator productivity are the
number of stops, miles traveled, dollars delivered, cases
delivered, pounds delivered, or pallets delivered per person-
hour.
 Quality Metrics
• Transportation quality and reliability are just as important, if
not more important, than cycle time.
• A shipment delivered quickly to the wrong location or with
damage is of no use to the shipper or the shipper’s customer.
A carrier with an average delivery time of 48 hours who
always delivers in 48 hours may be preferred over one with
an average of 24 hours if the latter delivers in less than 24
hours a majority of the time, but occasionally delivers in 96
hours.
 Cont…d
• Here are a set of transportation quality indicators :
• Claims-free shipment percentage: The percentage of shipments without
claims for each driver or carrier on each lane at each location.
• Damage-free shipment percentage: The percentage of shipments without
damage for each driver or carrier on each lane at each location.
• Distance between accidents: The miles or kilometers between accidents
for each driver, carrier, and lane.
• On-time arrival percentage (OTAP): The percentage of shipments that
arrive on-time for each driver, carrier, and lane.
• Damage percentage= order arriving w/o in-transit damage/total orders
 Cont…d
• On-time departure percentage (OTDP): The percentage of loads that
depart on-time for each driver, carrier, and lane.
• Perfect delivery percentage (PDP): Similar to the perfect order percentage
concept for logistics as a whole, the PDP assesses the percentage of
shipments delivered without defects, including damage, documentation,
arrival time, arrival location, loss, accidents, and claims of any kind for
each delivery, driver, lane, and carrier.
• Perfect Route Percentage (PRP): The percentage of routes or trips without
an imperfect delivery.
• Miles between accidents = total miles driven/number of accidents
 Cycle Time Metrics
• Time is literally money in the transportation industry. Quicker transit,
loading, and unloading times translate into greater asset utilization, which
translates into greater leveraging of the corporation’s capital.
• Cycle time metrics are the most natural indicators of transportation
performance.
 Cont…d
• Some of the most popular cycle time indicators for transportation include
• In-transit time (ITT): Point-to-point in-transit times by driver, carrier, lane,
and location.
• In-transit time variability: Point-to-point in-transit time variability by
driver, carrier, land, and location.
• Vehicle load/unload time: Vehicle loading and unloading times at each
pickup/delivery location by driver, carrier, lane, and location.
• Detention time: Time spent waiting for loading or unloading at a
pickup/delivery location due to dock congestion and/or delays caused by
the shipper or consignee.
• Delayed in traffic time: The time spent idling or at reduced speed due to
traffic congestion for each driver, carrier, lane, and pickup/delivery
location.
Chapter Eight: Global Transportation Planning
and Execution

• Introduction
• Overview of Global Transportation
• Logistics Channel Issues in Global
Transportation
• Global Transportation Challenges
• Transportation Planning
• Overview of Global Transport Execution
 Introduction
• The global economy is going through a highly
volatile period: unpredictable fuel prices,
reduction in product prices, global recession
• Fluctuating demand, protectionism
• Global trade remains a huge activity
demanding the effective planning and
management of GT
 Overview of GT
• GT is provided by all modes- 80-90% by sea
• Global trade agreements stimulate
transportation activities
– Removal of trade barriers
– Allowed faster and more business
– Led to greater need for international freight
transportation
 Logistics Channel Issues in Global
Transportation
• Global transportation involves more than the
physical flow of goods via all modes
• The global flow of goods is supported by effective
information flows between the exporter and
importer. The flow of payments is also critical to
timely completion of the transaction
• The concept of logistics channels or networks
(Woods et al., 2002) involves: the transaction
channel, the communication channel, and the
distribution channel.
 Cont…d
• Transaction Channel Activities When purchasing
goods, paying for them, and preparing for their
movement, the buyer (importer) must take steps
to protect its financial interests and reduce risk.
• The importer must effectively negotiate details
with the seller (exporter) that go beyond the
basics of product quality, price, and quantity.
• In global transactions, it is also important to
clarify the location and point in time at which
legal title for the goods transfers from the
exporter to the importer.
 Cont…d
• Transfer of ownership is linked to responsibility for the
goods in transit. This responsibility includes making key
decisions regarding mode and carrier selection,
insurance coverage, and routing.
• The transfer of ownership also determines who is
responsible for payment of transportation services,
insurance, and import duties.
• Finally, ownership determines responsibility for
compliance with government regulations, management
of the goods while in transit, and financial liability in the
event of freight damage, loss, or delay
• Who is at more risk? Importer or exporter?
 Cont…d
• Communication Channel: One of the major challenges
in global transportation is maintaining visibility and
control of freight as it move across borders and is
handed off between carriers and intermediaries.
• Timely information sharing and the use of technology
can vastly improve shipment visibility. Proper freight
documentation ensures compliance with government
regulations and facilitates the uninterrupted flow of
goods through potential bottlenecks at border
crossings and ports.
• Challenges: a much larger number of documents
 Cont…d
• Distribution Channel: Managing an extended
transportation network increases the potential for
disruptions, with distance and complexity being the
main culprits.
• Also, freight travels through multiple facilities and is
touched by numerous intermediaries. Also,
transportation infrastructure, regulations, and service
options vary from country to country.
• As a result, global freight is at greater risk of erratic
and extended transit times, freight stoppages, visibility
problems, and loss of control than domestic freight.
• They must recognize and act upon the need for
effective transportation planning in terms of mode,
carrier, and route selection.
 Cont…d
• Properly matching freight to the most appropriate mode
will facilitate safe and cost efficient distribution of goods.
Vigilant carrier selection processes will lead managers to
reputable transportation service providers with significant
experience in key markets, extensive capabilities, and a
strong customer orientation.
• Optimal route selection from among the wide variety of
options will provide for greater freight protection and more
consistent service. These three distribution channel issues
are covered in more detail at the end of the chapter. Other
important distribution channel issues include freight
protection (proper packing and loading of goods) and
process control (measuring and monitoring transportation
performance).
 Cont…d
• While global transportation managers must address the
extended distances, longer transit times, and multiple
carriers involved in the distribution channel, careful
consideration of all three channels is essential to success.
• Managers must focus on the ownership transfer, freight
control, and payment issues in the transaction channel.
• Also, managers must understand documentation
requirements and the need to interact with multiple
governments, sometimes unfamiliar sellers, and a variety of
transportation service providers in the communication
channel. Finally, managers must work toward coordinating
decision across the three channels and making
conscientious tradeoffs between them as needed.
 Global Transportation Challenges
• Compared to domestic freight movement, global transportation of
goods over long distances creates a variety of significant challenges:
longer and more variable transit time, risk of in-transit product
damage or loss, higher delivery and accessorial service expenses,
and greater in-transit inventory carrying costs.
• These challenges must be accurately weighed against the obvious
labor cost benefits of sourcing goods globally or moving production
offshore.
• Transportation managers must also be cognizant of broader issues
that impact the availability and cost of global transportation
services. Proper long-range planning of the transportation function
requires that managers take the time to monitor business trends,
government intervention, and consumer demand.
• Failure to respond to changes in these macro-level issues will
produce unnecessary risk, capacity challenges, and a competitive
disadvantage.
 Cont…d
• Some of the challenges:
– Trade level fluctuations- capacity problems, port
congestions
– Carrier consolidation- due to global recession- led to
developing strategic alliances, merging operations
– Security risks- protection against terrorism, timely
sharing of paperwork containing more of a detailed
information with government agencies, inspection of
freight, theft, hijacking
– Shifts in regional sourcing
 Transportation Planning
• GT planning involves:
– Export preparation
• Four primary export preparation activities are choosing
the terms of trade, securing freight insurance, agreeing
upon the terms of payment, and completing the
required freight documentation.
• These pre-shipment steps help to clarify
responsibilities of the exporter and importer, protect
each party’s financial interests, improve freight control
and visibility, and facilitate problem-free transport.
 Cont…d
• Terms of Trade
• When a company purchases goods from an international
supplier, the buyer typically focuses on product price,
quality, and quantity of goods. However, transportation
issues must also be considered and a number of relevant
activities must take place:
– Clearing the goods for export
– Organizing the transport of goods from origin to destination,
often involving multiple moves and modes
– Clearing customs in the country of import
– Arranging payment for transportation, insurance, and duties
• The terms of trade specified in the contract determine
which of these responsibilities are handled by the exporter
(the international supplier) and which are managed by the
importer (the company making the purchase).
 Cont…d
• Cargo Insurance
• One of the issues addressed by Incoterms is responsibility
for insuring the freight. The organization assuming this role
faces one of the most complex issues in global
transportation.
• Cargo insurance is challenging because of the unique
terminology, centuries- old traditions, and confusing set of
regulations that limit carrier liability.
• Regardless of the challenges, cargo insurance is critical.
Importers and exporters are exposed to countless perils
and financial risks when their freight moves through the
global supply chain. They must determine their insurable
interests and how to most effectively manage risk.
 Cont…d
• Terms of Payment
• Freight Documentation
• Freight documents control the cargo on its journey from
origin point in the country of export to its final destination
in the country of import. Missing or incorrect paperwork
can cause delays and additional costs. A failure to provide
complete cargo information 24 hours prior to loading at an
international seaport can lead to denial of loading, fines,
and penalties. Paperwork errors can also lead to Customs
clearance delays, additional inspection, and improper
application of duty rates. Hence, proper and accurate
documentation is critical to the timely and cost-efficient
flow of international cargo.
 Cont…d
• Mode Selection
• The fundamental decision in global transportation is mode
selection—how will goods be transported from the origin to the
destination? The exporter and/or the importer will be involved in
this decision, depending upon the Incoterm used for the
transaction. Each party will choose the mode for the portion of the
delivery for which they are responsible.
• The general strategy regarding modal selection focuses on
determining which mode or combination of modes best suits the
requirements of the global transportation buyer. This long range
decision requires an analysis of the best fit and balance between
modal capabilities, product characteristics, supply chain
requirements for speed and service, and transportation cost. Short
of major price, infrastructure, service quality, or technological
changes in the modes, the decision does not need to be revisited
frequently.
 Cont…d
• Carrier Selection
• Carrier selection is based on a variety of shipment criteria and
carrier capabilities: geographic coverage, transit time average and
reliability, equipment availability and capacity, product protection,
and freight rates.
• A major difference between modal and carrier selection is the
number of options available to the transportation manager.
Numerous trucking options exist for short distance cross-border
transportation. Multiple ocean and air carriers serve major trade
routes for intercontinental cargo movement. However, the number
of carrier options is shrinking in all primary modes.
• Another difference is the frequency of the decision. Carrier
selection requires more active and frequent engagement of the
transportation buyer than does the more long-range modal
selection decision.
• It is critical to monitor each carrier’s service level and freight rates
on an ongoing basis. Should carrier performance deteriorate, it may
be necessary to select new service providers.
 Cont…d
• Carrier selection strategy commonly focuses on
concentrating the transportation buy with a
limited number of carriers.
• Using a small group of carriers helps the
organization leverage their purchasing dollars for
lower overall rates, build relationships with
service providers who gain a better
understanding of freight flows and requirements
over time, and allows the organization to
effectively monitor performance of the carrier
base.
 Cont…d
• Route Planning
• Routing planning and delivery scheduling activities are not trivial—they
involve big dollars, impact customers, and can cause major headaches if
not properly managed. Conceptually, they are not difficult problems to
understand but they are challenging to solve, particularly with the long
distances and multiple route options involved in global transportation.
• Issues:
• Transit time and on time performance
• Efficiency
• Product safety
 Overview of GT Execution
• Involves:
– Preparing freight
• Packing
• Documentation
• Insurance
– Moving freight
• To port
• Port to port
• From port
– Clearing from customs
• Classify
• Valuation
• Liquidation
Direct vs Indirect Transportation
Chapter Nine: LIS