Variables Affecting Choice of Supplier, Shipment Size and Mode in Freight Transportation
The freight transport industry is complex and intermodal as more than one mode may be used to transport a good during its origin-destination journey. Goods are shipped under a single contract, but transportation is performed by several different modes of transport. Land or "ground" shipping can be by train or by truck.
Railroads: Since olden times, railroads have handled the largest number of ton-miles. Railways dominated the intercity1 freight tonnage till World War II and in some cases of Europe, Asia and Africa they even connected the countries. This early superiority enabled railways to transport large shipments very economically.
Trucking: There are three types of carriers: parcel, full truckload (FTL), and less-than-truckload (LTL). FTL carriers typically carry fully or partially-loaded containers from a shipper to a single destination. LTL carriers collect freight from different shippers, consolidating the goods into containers for line-haul to a terminal. The freight may be further sorted or consolidated at the terminal for continued hauling. Shipment of freight directly from the shipper to the destination is known as a door to door shipment. In comparison to railroads, motor carriers have relatively small fixed investments in terminal facilities and operate on publicly maintained highways. Motor carriers are best suited to handle small shipments moving short distances.
Water transport: The main advantage of water transportation is the capacity to move extremely large shipments. Water transport employs 2 types of vessels, deep-water vessels, which are generally designed for oceans and seas and diesel-towed barges, which generally operate on rivers and canals, have considerably more flexibility. Water transport ranks between rail and motor carrier in the fixed cost aspect. The main disadvantage of water transport is the limited range of operation and speed. The capability to carry very high cargo at an extremely low variable cost places this mode of transport in demand when low freight rates are desired and speed of transit is a secondary consideration.
Air transport:Its major advantage being its speed, which is accompanied by high costs. A coast-to-coast shipment via air requires only a few hours contrast to days taken by other means of transportation.
In air and sea shipments, ground transportation is often still required to take the product from its origin to the airport or seaport and then to its destination. Vans and trucks make deliveries to sea ports and air ports where freight is moved in bulk. Thus, truck plus rail, truck plus water, and rail plus water are common multimodal combinations. In case of multimodal transportation the carrier does not possess all the means of transport in practice; the carriage is often performed by sub-carriers.
The factors influencing a shipper's choice of transport mode are complex and highly interdependent. They involve tradeoffs between the cost of transportation and overall transit time and delivery reliability. Thus, the shipper is typically the receiver's "agent" in the process and it is his wishes that are honored in the size of shipment and the choice of mode.
Ordering is a costly process. Smaller shipment sizes typically carry high unit cost of transportation, and if the shipment size is smaller than a full vehicle load, the load must be picked up at the origin by the freight carrier and consolidated before shipment, then deconsolidated and delivered at the destination end. Most LTL carriers, parcel carriers and airfreight systems perform consolidation/deconsolidation of smaller shipments into full vehicle loads. These processes are also expensive, sometimes exceeding the cost of linehaul transportation.
The determinants of the choice of transport mode are:
1. Shipper/receiver attributes:High annual use of a product allows the receiver to order large replacement shipments and to take advantage of the low transport costs afforded by economies of scale in shipping associated with large shipment sizes. Excess inventory can be avoided by ordering product more frequently in smaller shipment sizes. Clearly, rail as a mode is uniquely capable of handling larger individual shipments than truck. The typical carload can handle shipment weights up to 200,000 pounds, or more, while a maximum single unit truckload payload is around 50,000 pounds.
2. Commodity attributes:The density of a product influences the choice of vehicle either by loading "heavy," in which case payload is important, or loading "light," in which case cube is more important. Shelf life influences choice of mode by placing a premium on transit time, where longer travel time leads to less time available on the grocer's shelf before the product spoils. Loss and damage may lead to a need for emergency shipments.
3. Transport attributes:These include availability of equipment, transit time, reliability, loss and damage experience.
The most important single issue in freight transport is how to achieve a better balance between road transportation, airfreight, rail transportation, sea freight and inland shipping (haulage) taking into account differences in cost, quality of service, safety and environmental impact, and the need to build additional infrastructure.
The emerging freight transport system trends demonstrate the importance and necessity of intermodal freight transport systems. In addition, new technologies, and organizational concepts, like City Logistics and third party logistics (3PL), have been introduced in order to cope effectively with the new freight transport demand requirements.
Electronic commerce: In business to consumer (B2C) transactions, the Internet provides new opportunities for managing demand, i.e. provision of services 24 hours a day and seven days a week forming real-time connections between corporations and their distributors, resellers, suppliers (B2B transactions).
Intelligent Transportation Systems (ITS):The development of identification technologies (Advanced Traveller Information Systems (ATIS), Automatic Vehicle Location/Identification (AVL)/AVI) systems with vehicle routing/scheduling software) facilitate further logistics information exchange and acquisition and allow the fast and accurate tracking and tracing of shipments leading to substantial benefits, i.e. a) time savings, b) increased level of service, c) better utilization of resources, and d) better supply chain integration. In addition the provision of real-time information increases flexibility and responsiveness.
6. Give English equivalents for the words and phrases given below:
влияние на окружающую среду, время транзита, дополнительная инфраструктура, надежность поставки, комплектование грузов, плотность продукта, полная загрузка судна, связь в реальном времени сделка, срочные поставки, стоимость транспортировки.
7. Complete the sentence using words and expressions given below:
transportation; sea freight; time; shipment; transit; load; freight; utilization; costs; door to door; shelf; chain; consolidated; reliability; rail, truck; road, airfreight
1. The common multimodal combinations are ………..1 plus………2, truck plus water, and rail plus water.
2. Shipment of freight by trucks, directly from the shipper to the destination, is known as a ……………..3 shipment.
3. The choice of a concrete mode of transport is performed after the analysis of the cost of……………….4, overall …………….5 time and delivery…………...6
4. I the shipment size is smaller than a full vehicle…..……7, the load must be picked up at the origin by the …………. 8 carrier and ………………9 before shipment.
5. Excess inventory can be avoided by ordering product more frequently in smaller ……………10 sizes.
6. The receiver can take advantage of the low transport…………..11.
7. ………..12 life influences choice of mode by placing a premium on transit……….13, where longer travel time leads to less time available on the grocer's shelf before the product spoils.
8. Achieving a better balance between ………14 transportation, ……….15, rail transportation, ………..16 and inland shipping in freight transport.
9. The use of identification technologies leads to time savings, increased level of service, better …………….17 of resources and better supply ……………18 integration.
8. Answer the questions:
What are the oldest and the newest means of transportation?
What kind of consignment can be shipped by trains, trucks, ships, barges and airplanes?
What are the prices for the airfreight comparing other means of transportation?
What are advantages and disadvantages of every mode of transport?
What are the factors influencing a shipper's choice of transport mode?
Why is ordering a costly process?
What is the foreign trend in freight transport industry? What does “intermodality” mean?
What is the role of Internet in shipping goods?
What are the Intelligent Transportation Systems created for?
9. Translate the sentences using the text “Variables Affecting Choice of Supplier, Shipment Size and Mode in Freight Transportation”:
1. Наиболее частые способы транспортировки груза – это железные дороги, автострады и водные пути.
2. Интермодальные перевозки задействуют несколько видов транспорта.
3. Если вопрос времени не играет для отправителя важную роль, а вопрос экономии средств является второстепенным, самолет – это самый удобный способ доставки товаров.
4. Факторы, влияющие на выбор вида транспорта – это стоимость, общее время в пути и надежность поставки.
5. Многие перевозчики выполняют консолидацию и деконсолидацию сборных грузов.
6. Мультимодальные перевозки, как и интермодальные, являются многовидовыми. Но главной отличительной чертой таких перевозок является то, что их выполняют несколько разных компаний.
10. This table shows the comparative speed and cost of sending a consignment of cloth from London to Madrid (See Language Notes):
| Means of transport | Transit time | Frequency of departure | Total cost |
| Ship ------------- Plane ------ Truck ----------- Train ------ | 10 days 1 day 4 days 3 days | Every 12 days Every day Every 5 days Every 7 days | £246 £433 £149 £145 |
In pairs, compare the different means of sending the consignment, like this:
P: Is it quicker by sea than by air? R: No, its’ slower.
P: Are trains more frequent than trailers? R: No. They’ are less
frequent.
P: Is it more expensive by train than by R: No. It’s less
plane? expensive.
11. Retell the text “Variables Affecting Choice of Supplier, Shipment Size and Mode in Freight Transportation” according to the plan:
A.Intermodality of the freight industry.
B.Advantages and disadvantages of every mode of transport.
C.The common multimodal combination.
D.Factors influencing the shipper’s choice of a transport mode.
E.The role of Internet in shipping goods.
F.Intelligent Transportation systems.