CHAPTER 7 –TRANSPORTATION

1/ ROLE OF TRANSPORTATION
Transportation, which can be defined as the actual, physical movement of goods and people between two points,
is pivotal to the successful operation of any supply chain because it carries the goods, literally, as they move along
the chain
+ Transport principles
● Economy of scale
● Economy of distance
+ Transportation members
● Shippers and Consignees
● Carriers and Agents
● Owners and operators of transportation infrastructure
● Transportation policy makers
+ Transportation specialists
● Freight forwarders
● Shippers’ associations (NASA - North American Shippers Association, which specializes in the
transportation of beverages across the globe)
● Brokers
+ Transportation regulations
● Environmental regulation: enforcing noise emissions from transportation equipment such as rail
locomotives and truck tractors
● Safety regulation: targeting high-risk carriers and commercial motor vehicle drivers; and improving safety
information systems and commercial motor vehicle technologies.
● Economic regulation: all LTL carriers charged the exact same prices for transporting shipments between
any two points and when com panies can’t compete on price, they must compete on service.
2/ MODES OF TRANSPORT
- Air Commented [54]: • Auto parts and accessories
• Cut flowers and nursery stock
+ speed, particularly on the line-haul (terminal-to-terminal movement of freight or passengers) • Electronic or electrical equipment, such as cell phones
and iPods
+ expensive form of transportation • Fruits and vegetables
• Machinery and parts
• Metal products
airfreight is best suited to high-value, lower-volume products that are of a perishable nature or otherwise require • Photographic equipment, parts, and film
urgent or time-specific delivery • Printed matter
• Wearing apparel
- Package carrier (truck)
+ Less-than-truckload (LTL) shipments range from about 150 to 10,000 pounds; they are often too big to be
handled manually, yet they do not fill an entire truck
+ Truckload (TL) carriers focus on shipments of greater than 10,000 pounds, and although the exact weight
depends on the product, it is close to the amount that would physically fill a truck trailer.
● One customer
 ● Several customers consolidation
- Rail Commented [55]: transport lower-value, high-volume
shipments of bulk-type commodities such as coal,
+ less flexibility (ability to deliver the product to the customer), unless the customer is located on a rail line or chemicals, farm products, and nonmetallic minerals
has a rail siding
+ greater flexibility in the volume that can be carried at any one time (capacity)
- Water Commented [56]: + petroleum and petroleum-related
products, followed by coal
+ relatively inexpensive to users + food and farm products, industrial chemicals, and
minerals and stone
+ slow average speeds
- Pipeline Commented [57]: liquid, liquefiable, or gaseous in
nature (petroleum)
+ Gathering lines (start at each well and carry crude oil to concentration points) + Trunk lines (carry crude oil
from gathering-line concentration points to the oil refineries)
+ most reliable form of transportation = no vehicle-related disruptions + unaffected by adverse weather conditions
+ slowest form of transportation increases overall transit times and necessitates additional inventory
INTERMODAL & MULTI-MODAL TRANSPORT Commented [58]: + Vận tải kết hợp là hoạt động vận
chuyển hàng hóa từ điểm lấy hàng đến điểm trả hàng
3/ ATTRIBUTES AFFECTING THE CHOICE OF TRANSPORT MODE bằng nhiều phương thức vận chuyển (đường bộ,
đường biển, đường không…).
- Cost: price that a carrier charges to transport a shipment + Mỗi phương thức có một nhà cung cấp dịch vụ vận
chuyển khác nhau, với các hợp đồng cung cấp dịch vụ
vận chuyển riêng lẻ. Với Intermodal transport, có nhiều
- Speed: elapsed transit time from pickup to delivery bên cung cấp dịch vụ tham gia vào quá trình giao nhận
lô hàng.
- Reliability: consistency of delivery
Commented [59]: + Vận tải đa phương thức là hoạt
- Capability: amount of different types of product that can be transported động vận chuyển hàng hóa từ điểm lấy hàng đến điểm
trả hàng bằng nhiều phương thức vận chuyển khác
nhau (đường bộ, đường biển, đường không…).
- Capacity: volume that can be carried at one time + Mỗi phương thức có một hoặc nhiều nhà cung cấp
dịch vụ vận chuyển khác nhau nhưng chỉ có duy nhất
- Flexibility: ability to deliver the product to the customer một (01) hợp đồng dịch vụ vận chuyển đứng tên duy
nhất một đơn vị vận tải trong suốt quá trình giao nhận lô
4/ DIRECT SHIPMENT NETWORK TO A SINGLE DESTINATION hàng.

The major advantage of a direct shipment is the

elimination of intermediate warehouses and its
simplicity of operation and coordination.The shipment
decision is completely local, and the decision made for
one shipment does not influence others. The
transportation time from supplier to buyer location is
short because each shipment goes direct.A direct
shipment network to single destination is justified only
if demand at buyer locations is large enough that
optimal replenishment lot sizes are close to a truckload
from each supplier to each location
5/ DIRECT SHIPPING WITH MILK RUNS
A milk run is a route on which a truck either delivers
product from a single supplier to multiple retailer or
goes from multiple suppliers to a single buyer
location.Milk runs make sense when quantity
destined for each location is too small to fill a truck
but multiple locations are close enough to each other
such that their combined quantity fills the truck.

6/ ALL SHIPMENTS VIA INTERMEDIATE CENTER WITH STORAGE/CROSS-DOCKING

- With storage
Storing product at an intermediate location is justified if
transportation economies require large shipments on the inbound
side or shipments on the outbound side cannot be coordinated.The
presence of a DC allows a supply chain to achieve economies of
scale for inbound transportation to a point close to the final
destination, because each supplier sends a large shipment to the
DC that contains product for all locations the DC serves. Because
DCs serve locations nearby the outbound transportation cost is not
very large.
- With cross-docking
send their shipments to an intermediate transit point (which could be a DC) where they are cross-docked and sent
to buyer locations without storing them. When a DC crossdocks product, each inbound truck contains product
from suppliers for several buyer locations whereas each outbound truck contains product for one buyer location
from several suppliers. Major benefits are that little inventory needs to be held and product flows faster in the
supply chain. Also saves on handling cost because product does not have to be moved in and out of storage. Cross
docking is appropriate when economies of scale in transportation can be achieved on both the inbound and
outbound sides and both inbound and outbound shipments can be coordinated
7/ SHIPPING VIA DC USING MILK RUNS
Milk runs can be used from a DC if lot sizes to be delivered to
each buyer location are small. Milk runs reduce outbound
transportation costs by consolidating small shipments. The use
of cross docking with milk runs requires a significant degree of
coordination and suitable routing and scheduling

8/ INTRODUCTION TO LINEAR PROGRAMING

A model consists of linear relationships representing decisions, given an objective and resource constraints
11/ THE SHORTEST ROUTE PROBLEM