ASSIGNMENT

MIKYAS NEME……….BER/0770/09

R3MM

SUBMITTED TO: ABDUL SHUKUR

Transport Modes
Various options for moving products from one place to another are called transportation
modes. Road, rail, air, water, and pipelines are considered the five basic modes of
transportation by most sources. In addition, digital or electronic transport is referred to as
the sixth mode of transportation in some texts. Any one or more of these six distinct modes
could be selected to deliver products to customers. However, all transport modes may not
be applicable or feasible options for all markets and products.

Major modes of transportation

1. Road
Road transport is capable of providing a door to door service without any break in the journey to
change from one vehicle to another; so it can, unlike any other means of transport, move a
product from anywhere to anywhere else. Road vehicles, being relatively small, can Transport
63 also be transported by other means of transport such as ships and aircraft, hence providing the
ability to offer direct delivery in the same vehicle even when other means of transport become a
necessity. In most countries, the road system is perceived by the authorities as being a part of the
national infrastructure and is funded out of taxation, effectively providing a subsidy to road
transport. As a result, it can frequently offer competitive prices relative to other forms of
transport, an advantage that is enhanced further by the fact that the road haulage industry
comprises many independent operators fighting for their share of the market, making it highly
competitive. Road transport is also, for most companies, the only mode of transport for which an
in-house operation is a realistic option.

Although there has been significant investment in road infrastructure in most developed
countries over the past decades, this has been matched by a corresponding increase in road
traffic, leading to serious congestion in many cities and urban areas. Estimating delivery times
and maintaining schedules becomes difficult with resultant risks to meeting on-time delivery
targets.

2. Rail
The rail networks have experienced major investments and developments in certain European
countries, in particular France and Germany where they are significantly subsidized by the
taxpayer, whilst other developed countries by contrast have invested relatively little. Rail has the
capacity to transport both heavy and high volumes of goods over land at relatively modest costs
and at a higher travelling speed than road. Bulk transport of fluids and solid aggregates can be
undertaken by rail using dedicated rolling stock where appropriate. In comparison with other
modes of transport, the rail systems tend to maintain their schedules relatively well, but overall
journey times are frequently long due to time spent at the start and destination of the journey,
where a change of transport mode normally takes place, and also where an interchange is
required by the system. Although speeds are relatively high when the goods are moving, they
tend to spend much time waiting. The relative inconvenience of rail compared to road has caused
a relative decline in its use as an overland mode of transport in recent decades.

3. Sea and inland water

Ships are the oldest form of bulk transport and still provide the most cost-effective means of
moving large quantities, whether measured in terms of weight or volume over large distances. If
no land route (including tunnels and bridges) is available, water remains the sole alternative to
air for most products and is capable of handling virtually all cargoes. Like rail, it can suffer from
delays at the start and finish of the water sector and at interchanges; it is nevertheless reliable and
relatively cheap.

4. Air
By contrast, air transport offers a means of rapid transport and continues to develop its extent
and capability. It provides by far the quickest mode of moving goods over large distances, but
compared to surface transport is expensive. The capacity of aircraft is also limited by technology
and air is unable to compete with rail or water-borne transport for the movement of bulk loads.
Although not as flexible as road in providing door to door transportation, the use of light aircraft
in countries such as Australia enables air transport to offer a higher degree of flexibility of source
and destination than rail or water transport.

5. Pipelines and cables

Gas, water, oil, electricity, etc. are products that lend themselves to the use of dedicated transport
systems. Such systems involve massive initial investment and need high volumes of movement
to justify them. Once installed, however, they provide very cost effective mechanisms for the
transport of their product and relieve other systems of possible congestion. This type of
distribution also exploits the fact that the product will flow; unlike most other forms of transport
it is unidirectional. This has both advantages and disadvantages. If the customer wishes to return
the product, another mode of transport has to be sought. However, there being no potential
capacity for return journeys, there is no potential waste if this is not used. There is a wide choice
available to the distributor in deciding how to convey the product to the customer, all having
particular advantages and disadvantages relative to different products and markets.

Advantage and disadvantage

1. Rail: Advantages
 Ability of loading and unloading goods and services is more. Frequency of delivering the
goods over long distances is more. Climatic conditions have no effect
 No traffic or congestion easy movement of the vehicle.

Disadvantages:

 Capital and initial investments are more.

 High material usage for the construction and even the fuel consumption
2. Road: Advantages:
 High flexibility and ability to move the vehicles fastly. Uses different routes to reach the
destination quickly.
 Does door to door service High safety for the cargo
 Chance to select the carrier which is suitable for carrying the goods

Disadvantages:

 It mostly depends on climatic conditions.

 High cost for long distances.
 Productivity is low..

3. Air: Advantages:
 Highest speed
 Even delivers goods to remote places.
 High reliability

Disadvantages:

 Highest cost of transportation.

 Even adverse weather conditions effect the transportation.
 Material and fuel consumption is costly.

4. Water: Advantages:
 It is economical mode for transporting heavy loads and even cargo.
 It is the safest mode which provides convenience to the people without accidents.
 Cost of construction and maintenance is very low.
 It even provides international transport

Disadvantages:

 It is highly affected by the weather conditions.

 It requires large initial investment

5. Pipeline
 Supply through pipelines is very reliable. It is free from obstacles in road and rail
transport.
 In case of underground pipelines, the land in which pipeline is laid can still be used for
agricultural use.

Disadvantages:
  Unlike roads no separate land acquisition is done for pipelines, sometimes it is laid
sidewise along the road. Which is not very convenient if it is passing through dense
populated areas?
 Also there is always a risk of damaging pipeline because of road repair and other
activities containing excavation.
 Illegal pilferage and wastage due to leak is a problem in pipelines.

Transportation Carrier Types

For-hire carrier
An authorized for-hire motor carrier transports passengers, regulated property or household
goods owned by others for compensation.

Common Carriers
Common Carriers are statutorily declared to be a public utility and must serve the public
indiscriminately. Common carriers offer scheduled and/or call-and-demand services, such as:
taxis, sightseeing services, shuttles, and charters.

Contract Carriers
Contract Carriers are limited to providing service pursuant to a contract that addresses unique
customer requirements at a price not less than that of existing common carriers. These carriers
are issued a permit which authorizes them to perform agreed upon services for their contracted
customer. There is no obligation or ability to serve the general public. Contract carrier regulation
includes: rates, quality of service, insurance, vehicle safety, driver safety, and record keeping.

Private Carrier
Private carrier refers to a company that owns the vehicles used to transport its own goods. A
private carrier does not transport goods as its primary business and, thus, does not seek to
transport the goods of other companies like a common carrier does. In this sense, a private carrier
is not a for-hire carrier and does not carry the goods of other companies as its primary business.
Semi- trailer trucks are the most common method of transport associated with private carriers,
though large businesses may also operate their own aircraft, railcars or ships as part of their
supply chain management. The composition of a private carrier fleet depends on the types of
goods the company deals in and the destinations that it ships to.

Intermodal Transportation
Intermodal transportation combines two or more modes to take advantage of the inherent
economies of each and thus provide an integrated service at lower total cost. Many efforts have
been made ‘over the years to integrate different transportation modes. Initial attempts at modal
coordination trace back to the early 1920s, but during that early period, cooperation was
restrained by regulatory restrictions designed to limit monopoly practices. Intermodal offerings
began to develop more successfully during the 1950s with the advent of integrated rail and motor
service commonly termed piggy- back service. This common intermodal arrangement combines
the flexibility of motor for short distances with the low line-haul cost associated with rail for
longer distances.
Part Ill Operations
The popularity of such offerings has increased significantly as a means to achieve more efficient
and effective transportation." Technically, coordinated or intermodal transportation could be
arranged among all basic modes. Descriptive jargon-piggyback, fishy back, train ship, and air
truck-- have become standard transportation terms. Industry Insight 11-2 illustrates the far-
reaching implications of multimodal integration for Deutsche Post.

Piggyback TOFC COFC are The best known and most widely used intermodal system is
the trailer (TOFC) or con- trainer (COFC) on a flatcar. Containers are the boxes utilized for
intermodal product storage and movement between motor freight, railroads, and water
transportation. Containers are typically 8 feet wide, 8 feet high, 20 or 40 feet long, and do not
have highway wheels. Trailers, on the other hand, are of similar width and height but can be as
long as 53 feet and have highway wheels. As the name implies, a trailer or container is placed on
a railroad flatcar for some portion of the intercity line-haul and pulled by a truck at origin and
destination. Line-haul cost is the expense to move rail- cars or trucks between cities. Since the
original development of TOFC, various combinations of trailer or container on flatcar, double
stack, for instance, have increased significantly. A variety of coordinated rail-truck service plans
have been developed. Each plan defines the railroad or motor carrier responsibility. Table 11-7
illustrates the most common operating plans. The plans differ by responsibility for equipment,
pickup, and delivery. While the TOFC concept facilitates direct transfer between rail and motor
carriage, it also presents several technical limitations. The placement of a trailer with highway
wheels attached, transferred to a railcar, can lead to wind resistance, damage, and weight
problems. The use of containers reduces these potential problems, as they can be double stacked
and are easily transferred to water carriers. However, they require special equipment for over-
the-road delivery or pickup.

Containerships Fishy back, train ship, and containerships are examples of the oldest form of
intermodal transport. They utilize waterways, which are one of the least expensive modes for
line- haul movement. The fishy back, train ship and containership concept loads a truck trailer,
railcar, or container onto a barge or ship for the line-haul move. Such services are provided in
coastal waters between Atlantic and Gulf ports, from the Great Lakes to coastal points, and along
inland navigable waterways. A variant of this intermodal option is the land bridge concept that
moves containers in a combination of sea and rail transport. The land bridge is commonly used
for containers moving between Europe and the Pacific Rim to reduce the time and expense of all-
water transport. For example, containers are shipped to the west Coast of North America from
the Pacific Rim, loaded onto railcars for movement to the East Coast, and then reloaded onto
ships for movement to Europe. The land bridge concept is based on the benefit of ocean and rail
combinations that utilize a single tariff, which is lower than the combined total cost of two
separate rates.
Coordinated Air-Truck Another form of intermodal transport combines air and truck. Local
cartage is a vital part of every air movement because airfreight must eventually move from the
airport to the final delivery destination. Air-truck movements usually provide service and
flexibility comparable to straight motor freight.
So, these are some advantages of Intermodal transportation throughout the
world
 It offers environmental benefits such as reduced CO , particulate matter, and N O
emissions, and lower diesel fuel consumption during this era of rapidly depleting natural
resources.
 Intermodal transportation allows for route changes and reduces highway use. There are
many significant advantages to intermodal transport: less noise pollution; more reliable
delivery time notifications; elimination of traffic and customs processes on the highway;
leaner planning processes; fixed departure schedules; higher quality service standards;
and easier planning and support for large- scale projects.

.Third-Party Service Providers

Nowadays, more companies are outsourcing their logistics functions to third-party logistics
service providers, as the emphasis on supply-chain management has increased. Third-party
logistics providers, commonly referred to as 3PLs, provide their clients with several logistics
services, such as freight forwarding, packaging, transportation, and inventory management, as
well as warehousing and cross docking.

Companies choose to use third party service providers Because these services are bundled
together by 3PLs, most companies consider these service providers as one-stop outsourcing
solutions that can do the jobs more efficiently, allowing the companies to focus on their core
business.
Third-party options can lead to cost reductions and customer-service improvements, especially
for those small and mid-sized companies that cannot afford to develop their own distribution
networks. Instead, they outsource their product distribution to 3PL providers so they can
compete in today’s global market. The cost savings gained through this channel is mainly
because of reduced transportation charges. In addition to cost saving in transportation, fixed
capital investments and labor and operating costs are reduced through this option. Moreover,
these companies may benefit from the available cash previously tied up in inventory. It should be
mentioned that the ultimate objective of outsourcing logistics functions must be enhancing
customer satisfaction through the improvement of delivery systems. However, often too much
attention is paid to cost reduction and in making logistics alliances, rather than in improving
delivery performance and customer satisfaction. Freight forwarders, shippers’
associations, shippers’ agents, brokers, small package carriers, and 3PL companies are all viable
transport alternatives for a shipper in the same way as the six basic transportation modes and the
intermodal combinations. The optimal combination of shipping options should be determined by
a company’s logistics executive. This decision depends on several issues, including the master
production schedule, customer-service objectives, the existing physical facility network, and
standards and regulations. Another substantial issue in determining the right modal choice or
combination of transport alternatives for a company is the product characteristics or the physical
nature of the product, which is explored in the following section.
Types of third party transportation
Warehouse/Distribution Based Third Party Logistics Services
 Many have former warehouse and/or distribution experience.

Forwarder Based Third Party Logistics Services

 Very independent middlemen with forward roles
 Non-asset owners that provide a wide ran of logistics services.

Shipper/Management Based Third Party Logistics Services

 Focused on the management of the ship process from beginning to end .
 Provides technology, such as a transportation management system, and integrated freight
management services to eliminate heavy process and cumbersome features such a claims
and accounting (freight payment a accounting)
 Provides management of carrier relations ongoing rate maintenance and negotiation
Gives information, such as freight data an matrix reports for better visibility and
continuing on future logistics outcomes

Financial Based Third Party Logistics Services

 Provide freight payment and auditing, cost accounting and control, and tools for
monitoring, booking, tracking, tracing, and managing inventory.

Information-based firms Third Party Logistics Services

 Significant growth and development in this category of Internet-based, business-to-

business, electronic markets for transportation and logistics services.

Material Handling

1. History

MH is not a new subject. Human beings who first inhabited Earth were faced with the problem
of moving things. They needed to transport both themselves and the materials they needed for
their existence.
History has recorded continual progress in MH. Probably one of the greatest achievements in the
ancient world was the construction of the pre-Inca temple near Cuzco, Peru. Stones weighing as
much as 20 tons were quarried at the bottom of a valley and moved more than 2000 feet up to the
temple site. In 1913, the Ford Motor Company instituted the first mechanized progressive-
assembly line. World War II stimulated the implementation of MH mechanization. Companies
that had government Cost-plus contracts were encouraged to make capital expenditures for MH
equipment.
Progress in current modern facilities is evident in the use of both mechanized and automated MH
equipment to provide desired efficiencies.

2. Definition
The following are some of the definitions of MH.
1. In Ballou’s definition, MH is physically moving objects or goods in small quantities over
relatively short distances.
2. The way materials and products are handled physically is the subject of MH movement.
To this point, the emphasis has been on the movement of products that are packaged in
customer-sized boxes.
3. For Magad and Amos, MH is the art and science of moving, storing, protecting, and
controlling materials.
4. MH means providing the right amount of the right material, in the right condition, at the right
place, in the right position, in the right sequence, for the right cost by the right methods.
The first definition conveys the fact that MH is a physical movement between short distances. It
is an activity that takes place in warehouses, production facilities, and retail stores and also
between transportation modes, so it must be repeated many times. In the second definition, the
emphasis is on the concept of building blocks: MH is moving products as building blocks such as
boxes, bottles, and cans.
Definition: What is material handling equipment?
Electric and internal combustion engine forklifts, reach trucks, order pickers and walkie/rider
pallet jacks are the typical parts of the material handling equipment (MHE) fleet.

Anything that relates to the movement, storage, control and protection of materials, goods and
products throughout the process of manufacturing, distribution, consumption and disposal is part
of this category of equipment. It can be also described as the mechanical equipment involved in
the complete system. Material handling equipment is generally separated into four main
categories: storage and handling equipment, engineered systems, industrial trucks, and bulk
material handling.

Used to increase output, control costs, and maximize productivity, warehouse management has a
number of ways to determine how efficient is the use of the material-handling equipment in any
kind of operation.

To control this equipment, management needs to register and record all relevant data, such as
measuring how many times an item is “touched” from the time it is ordered until it leaves the
building, making sure proper picking technology is used, as well as keeping system downtime to
a minimum. Stock-keeping units (SKUs) have found it useful to help analyze materials handling.

Material handling systems can be classified as mechanized, semi automated, automated,

and information-directed. A combination of labor and handling equipment is utilized in
mechanized systems to facilitate receiving, processing, and or shipping. Generally, labor
constitutes a high percentage of overall cost in mechanized handling. Automated systems, in
contrast, attempt to minimize labor as much as possible by substituting equipment capital
investment. When a combination of mechanical and automated systems is used to handle
material, the system is referred to as semi automated. An information-directed system applies
computerization to sequence mechanized handling equipment and direct work effort.
Mechanized handling systems are most common, but the use of semi automated and automated
systems is increasing. The main drawback to automated handling is lack of flexibility. One factor
contributing to low logistical productivity is that information-directed handling has yet to
achieve its full potential. This situation is predicted to dramatically change during the first
decade of the 21st century.

Mechanized Systems
Mechanized systems employ a wide range of handling equipment. The types of equipment most
commonly used are lift trucks, walkie-rider pallet trucks, towlines, tractor trailer devices,
conveyors, and carousels. Figure 14-4 provides examples of a variety of mechanized handling
equipments

Semi automated Systems

Mechanized handling is often supplemented by semiautomatic equipment. Typical equipment
utilized in semi automated handling includes automated guided vehicle systems, computerized
sortation, robotics, and various forms of live racks

Automated Systems
For several decades the concept of automated handling has offered great potential and limited
accomplishment. Initial automated handling efforts focused on master carton order selection
systems. Recently, emphasis has shifted to automated high-rise storage and retrieval systems.
Information-Directed Systems
The concept of information-directed handling is relatively new and the subject of a great deal of
research and development. The concept is appealing because it combines the control typical of
automated handling with the flexibility of mechanized systems.
Information-directed systems use mechanized handling controlled by information technology.
Two common examples of information-directed materials handling systems are RF-controlled
equipment and light-directed operations.

Material handling equipments

1. Containers and unitizing equipment
A. Containers
1. Pallets
2. Skids and skid boxes
3. Tote pans
B. Unitizers
1. Stretch wrap
2. Palletizers
2. Material-transport equipment
A. Conveyors
1. Chute conveyor
2. Belt conveyor
3. Roller conveyor
4. Wheel conveyor
5. Slat conveyor
6. Chain conveyor
7. Tow-line conveyor
8. Trolley conveyor
9. Power and free conveyor
10. Cart-on-truck conveyor
11. Storing conveyor
B. Industrial vehicles
1. Walking
2. Riding
3. Automated
_ Automated guided vehicles
_ Automated electrified monorail
_ Sorting transfer vehicles
C. Monorails, hoists, and cranes
1. Monorail
2. Hoist
3. Cranes
Packaging and Material Handling 159
3. Storage and retrieval equipment
A. Unit-load storage and retrieval
1. Unit-load storage equipment
_ Pallet-stacking frame
_ Single deep selective rack
_ Drive-in rack
_ Mobile rack
2. Unit-load retrieval equipment
_ Walkie stacker
_ Counterbalance lift truck
_ Narrow-aisle vehicle
_ Automated storage (AS) retrieval machines
B. Small-load storage and retrieval
1. Operator-to-stock storage equipment
_ Bin shelving
_ Modular storage drawers
2. Operator-to-stock retrieval equipment
_ picking cart
_ Order-picker truck
3. Stock-to-operator equipment
_ Carousels
_ Vertical lift module
_ Automated dispenser
4. Automatic data-collection and communication equipment
A. Automatic identification and recognition
1. Bar coding
2. Optical character recognition
3. Magnetic strip
4. Machine vision
B. Automatic paperless communication
1. Radiofrequency data terminal
2. Voice headset
3. Light and computer aids
4. Smart card

Issues in Selecting of Material Handling Equipment

Selection of material handling equipment is an important decision as it affects both the cost and
efficiency of handling system. The following factors are to be taken into account while selecting
the material handling equipment.

1. Properties of the Material

Whether the material is solid, liquid or gas, and in what size, shape and weight it is to be moved,
are important decisions and can be lead to a preliminary elimination from the range of available
equipment under review. Similarly, if the material is fragile, corrosive or toxic this will imply
that certain handling method and containers will be preferable to others.

2. Layout and Characteristic of the building

Another restricting factor is availability of space for handling. Low-level ceiling many preclude
the use of hoist or cranes, and the presence of supporting columns in awkward places can limit
the size of material handling equipment. If the building is multi-storied, chutes or ramp for
industrial trucks may be used. Layout itself will indicate the type of production operation
(continuous, intermittent, fixed position or group) and indicate some items of equipment that will
be more suitable than others. Floor capacity also helps in selecting the best material handling
equipment.

3. Production Flow
If the flow is fairly constant between two fixed positions that are not likely to be changed, fixed
equipments such as conveyors or chutes can be successfully used. If, on the other hand, the flow
is not constant and the direction changes occasionally from one point to another because several
products are being produced simultaneously, moving equipments such as trucks would be
preferable.

4. Cost Considerations
This is the most important consideration. The above factors can help narrow the range of suitable
equipment, while costing can help in taking the final decision. Several cost elements need to be
taken into consideration when comparisons are made between various items of equipment that
are all capable of handling the same load. Initial investment and operating and maintenance cost
are the major costs to be considered. By calculating and comparing the total cost of each items of
equipment under consideration, a more rational decision can be reached on the most appropriate
choice.

5. Nature of Operations
Selection of equipment also depends on the nature of operations like whether handling is
temporary or permanent, whether the flow is continuous or intermittent and material, flow
pattern-horizontal or vertical.

6. Engineering Factors
Engineering factors such as door, ceiling dimensions, floor space, floor conditions and structural
strengths are also taken in consideration in the selection of equipment.

7. Equipment reliability
Reliability of the equipment and supplier reputation and the after sale services plays an important
role in selecting the equipment.