Alliances

Product movement is the movement of Transport also functions as storage services Two fundamental transport principles.
1 2 for products while in a vehicle 3
inventory to specified destinations  find seeking an alliance with a stronger
logistics partner which will strengthen its
Restrictive element Also functions as storage services for Economy of scale is the cost per unit weight
4: TRANSPORTATION
 In transit inv is captive,
products while in a vehicle decreases as the size of the shipment
own competitive position.
 partner and exist provisions for alliance
FUNCTIONusually inaccessible during Product can also be stored in vehicles
at origin or destination (trailers, trucks,
increases.
termination. information that aids logistics
tranportation
railcars, etc) performance, specific goals to achieve a
Economy of distance is the cost per unit
Flexible element higher level of logistics performance that can
Diversion occurs when a shipment destination weight decreases as distance increases
be achieved alone, operating ground rules for
 Inv can be divided during is changed after a product is in transit.
each
shipment to a new
destination Goal is to maximize the size of the load and  Logistics alliance is fragile. It can be difficult to
7 Supplier Transport Service form and can dissolve easily
distance shipped while still meeting service
Transportation consumes TIME,FINANCIAL and expectations..
ENVIRONMENTAL RESOURCES. Traditional carriers are firms that provide service using only
 Trans is more 60% of the cost logistics one of the five basic transport modes Contract logistics
9 Logistic Service Provider
 One the largest oil and gas E.g. trucking firm or an airline
 Impact traffic congestion, noise and air pollution.  widely used by companies to support its
Package service uses intermodal transportation (ground and  Focus on core competences logistics activities compared to forming
air) to handle small shipments or parcel deliveries  Providing better quality service alliances. Common carriers provide trucking
4 Role and perspective of participants  Limiting investment opportunities and rail services
E.g. USPS, Fedex, or UPS  Cost reduction > Control  Public warehouse provide storage services.
 Customers demand order accuracy , excellent Specialty firms provide freight bill auditing and
Intermodal transportation combines two or more modes to
Shipper and consignee have a common interest accounting services.
take advantage of the inherent economies of each and service and timely delivery.
in moving goods from origin to destination provide an integrated service at a lower total cost
 logistics operations are performed for a
within a given time at the lowest cost client company for a contract price
E.g. piggyback service integrating rail and motor 2PL :an asset-based carrier, which actually owns the
Carriers desire to maximize their revenue for service,FISHBACK, means of transportation. Typical 2PLs would be shipping  third party provider. Integrated logistics
lines which own, lease or charter their ships; airlines and contract logistic. Sell logistics service.
movement while minimizing associated costs Nonoperating intermediaries include several business types which own, lease or charter their planes and truck
that do not own or operate equipment companies which own or lease their trucks
Agents (brokers and freight forwarders)
3PL: A firm which provides multiple logistics services for use Mode of Transport
facilitate carrier and customer matching Act to broker services by other firmss 5
by customers.
Government desires a stable and efficient These firms facilitate the movement of parts and materials  Rail – High fixed cost
transportation environment to support 6 Operating characteristics used to classify from suppliers to manufacturers and finished products  Highway – Low fixed cost
8 economic growth transport modes from manufacturers to distributors and retailers.
 Water - Medium fixed cost
Public is concerned with transportation Speed is the elapsed movement time from origin to destination Among the services which they provide are transportation,  Pipeline – Highest fixed cost
Hub and spoke expense, and standards for warehousing, cross-docking, inventory management,  Air – Low fixed cost
accessibility, Availability is ability of a mode to service any given pair of locations packaging and freight forwarding.
security, safety and the environment
Dependability is the potential variance from expected delivery 4PL: The most innovative and upcoming form of outsourcing
schedules logistics is Fourth Party Logistics.

Denoting a system of air transportation in which Capability is the ability to handle any load size or configuration 4PL can be considered as a comprehensive supply chain solution
local airports offer flights to a central airport where which combines the capabilities of management consulting, IT
Frequency is the quantity of scheduled movements a mode can technology and 3PL-providers.
international or long-distance flights are available.
handle