Ch 9 Domestic U.S. and Global Logistics

A small LTL shipment that originates on a truck in Los Angeles to Phoenix where it is unloaded and put onto another truck for final shipment to Denver would be considered an international shipment since it utilizes more than one vehicle during shipment

False

According to the textbook, the five basic modes of transportation are motor, rail, air, water, and cyberspace.

False

The primary difference between FOB origination and FOB destination is that FOB destination requires that the supplier legal own the product until reaches destination; in FOB origination the buyer takes ownership immediately and is thus responsible for arranging delivery

True

All Sections on Warehousing and Distribution, pp. 318-324

...

Green reverse logistics programs

Designed to return unneeded products for recycling. These programs reduce environmental impact on landfills & deal with dangerous contaminants.

in cost-of-service pricing, the cost of shipping increases proportionally with distance

False

while transportation regulation and deregulation both have their supporters, proponents of regulation consider it to be good since it is said to encourage competition and allows the negotiation of prices to dictate market costs.

False

Logistic Management Software Applications

Transportation management systems- selects the best mix of transportation services & pricing, ranks transportation options, manages contracts. Warehouse management systems- tracks & controls the flow of goods from receiving dock to outbound shipment. New technologies, such as RFID tags, facilitate tracking. Global trade management systems- provides global visibility, standardization, & documentation of product returns, while minimizing reverse logistics costs.

Generally speaking, rail carriers are less expensive than motor carriers.

True

Some of the e-commerce related services that transportation companies offer nowadays to remain competitive include allowing customers to plan itineraries, get freight quotes, and track shipments online

True

The responsibility of transportation is to create both time utility and place utility, which means that products will be delivered at precisely the right time to the desired location

True

When a supplier provides a price quote to a buyer for supplies that includes transportation to the buyers location this is known as FOB destination pricing, or free on board to the shipment destination

True

With FOB pricing, a supplier is the legal owner of a product until the product reaches its destination

True

Reverse Logistics

• Backwards flow of goods created when goods are returned by a customer in the supply chain • Retail returns range 6% to 40% of sales • Often is an expensive, unwanted SC activity • Many firms hire 3PL to handle reverse logistics

Transportation Pricing

• Cost-of-service pricing- varies based on fixed & variable costs. • Value-of-Service Pricing- services priced at market bearing competitive levels. • Negotiated Pricing- Since deregulation, negotiating prices has become more common. • Terms of Sale- includes transportation FOB (free on board) destination. • Rate Categories- Classified as line haul rates, class rates, exception rates, commodity rates, & miscellaneous rates.

Fundamentals of Transportation

• Maximize value to the firm through price and delivery negotiations • Provide profit contributions via cost reductions and better service. • Make sure service is provided effectively • Satisfy the customers' needs • Deliver at right time, right place, right quantity, in a way that minimizes cost.

Third Party Logistics (3PL) Services

• Provide reliable & timely delivery required by SCM • Used to significant degree by international logistics • Favored by small businesses • Some firms outsource all of their logistics needs to a lead logistics provider or fourth party logistics provider (4PL)

Modes of Transportation

• Rail Carriers • Air Carriers • Water Carriers • Pipeline Carriers

Global Logistics

• Transportation across national boundaries introduces added complexity, particularly security. • Since 9/11 there is more conflict between U.S. govt. & industry toward more security & restrictions for inbound shipments.

Environmental Sustainability in Logistics

• Transportation requires oil usage, which impacts a firm's carbon footprint. • Trucks returning from deliveries empty wastes energy. Internet services like Empty Miles finds backhaul opportunities for members. • A number of green logistics initiatives are currently underway (making more local purchases).