Transportation and Logistics

Class 2, 2014

Transportation Modes

U of T Infrastructure Study: Portland

Time Congested: 65 %Excess Fuel Consumption: 34 Mil GalTotal Delay (Person Hours): 40 MilTruck Congestion Cost: $265 MilCost Per Peak Auto Commuter: $ 8302009 Data (latest available)

Global CompetitivenessWorld Economic Forum Annual Report

2008: U.S. #1 2010: U.S. #4 2011: U.S. #5 2012: U.S. #7

2012 Top 10: Switzerland, Singapore, Finland, Sweden, Netherlands, Germany, U.S., UK, Hong Kong, Japan

Criteria: Legal and Admin Framework, Mgmt of Public Finance, Bureaucracy, Corruption, Transparency

Logistics ManagementTransportation Modes

Truck Rail Air Marine Pipeline Intermodal

Logistics Management Warehousing and Distribution

Number of DC’s Locations Inventory Levels Inventory Locations Delivery Routing

Logistical Forms Private Public Third Party

Third Party Logistics FirmsFreight ForwardersCustomhouse BrokersShippers’ CooperativesFreight BrokersParcel DeliveryAir Express3PLs (4PLs)Others

USPS, Bus, Cab

Carrier Types

Common Carriers Asset Based NVOCC

Contract CarriersPrivate CarriersExempt Carriers

Intermodal TransportationContainers

Chassis Rail Car

Flatcar Container Cars

Container Ships Barges

Trailers Flatcar Ro-Ro Vessels Barges

Standardization

Intermodal Transportation Standardization

Container Sizes Standard 20’ and 40’ 44’ Refrigerated 48’ New 53’

Stacking Mechanisms Container Lifting Interconnection

Pallets

Chassis Ship container slots Double Stack Rail

Cars Container Handling

Dockside Cranes Container Yard

Top Lifters Straddle Carriers

Transportation ModesAir

High Value Time Sensitive Highest Cost Lowest Total Volume

Transportation Modes

Truck Goes Almost Anywhere Flexible Second Highest Cost Second Highest Total Volume

Transportation ModesRail

Bulk Commodities High Density

Coal, Ores Grains Steel Lumber

Middle Cost Highest Total Volume

Transportation Modes

Water Ocean

Bulk Container VLCC

River / Coastwise Tug & Barge

Next Lowest Cost Next Lowest Volume

Waterways

America’s 26,000 miles of inland waterways:

Move 600 million tons/year. Indirectly involve 800,000 jobs.Transport $100 billion in interstate and

international trade

ComparisonThe cargo capacity of a

standard inland barge:

= 15 railcars

= 60 trucks

Transportation ModesPipelines

Any Liquid or Liquefiable Products Oil Gas Coal Chemicals

Lowest Cost Middle Volume

Intermodal Transportation

ContainersBargesTrailersFlatcarRo-Ro VesselsBulk Carriers

Logistical Cost Factors

Inbound Raw Material RM Inventory Costs In-Plant Logistics Finished Goods

Inventory Costs Documentation Costs Packaging Loading Line-haul

Transportation Security Costs

Customs Clearance Local Transportation Unloading Unpacking Material Handling Inventory Costs Pull/Pack/Ship Local Transportation to

Final Customer

Transportation IssuesBill of LadingFreight BillFreight Claim (Loss or Damage Claim)FOB Point INCO terms

ConsolidationCombine Inbound and Outbound VolBreak BulkDemurrageDetentionTransload Facilities

Traffic Management Manage Inbound and Outbound

Transportation Requirements Track Rates and Commodity Classifications Choice of Mode Carrier Selection Routing and Scheduling Consolidation Track and Trace Custom Equipment Manage Carrier Relationships

Rate DeterminationWeight/Density

Truckload (T/L), LTL, Minimum WeightDistanceProduct Description/FragilityRate BreaksFuel SurchargeCubic VolumeAccessorial Charges

Transportation PricingCarrier Pricing

Class Rates Commodity Rates Contract Rates FAK Rates

Seller Freight Pricing Zone Pricing Basing Point Pricing

Comparing ModesEach transportation mode satisfies

specific needs in carrying goods across the country and around the world.

Each mode has distinct advantages over others in certain areas.

Questions, Comments, Observations, Conclusions,

Arguments?