Chapter 9 Delivery

Direct Functional Responsibility of Supply for Logistics

Arranging in-bound transporation with suppliers or responsibility for supervising warehousing and stores.

Why would marketing turn to supply

Assist in est. relationships with 3pl's to operate distribution facilities and earehousing

Tracing

Attempts to determine the status/locations of items that have been shipped but have not yet been received.

Key document in the movement of goods

Bill of Lading

Freight Forwarders

Buy dedicated Space on Scheduled Carriers Can specialize as domestic or international, or by mode. Can provide value-added services.

FOB Destination / Freight Collect

Buyer Pays Freight Charges Seller owns goods In Transit Seller Files Claims If Needed

Road in comparison to others

Fast Reliable Low damage Low loss rates

Air Qualities

Fastest, High Cost, Must be combined with other modes Premium emergency mode

Exempt Carriers

For Hire carriers, BUT EXEMPT from regulation of rates and services. - INTERSTATE COMMERCE ACT

FOB

Free On Board

Transportation Service Providers

Freight Forwarders Brokers Custom House Brokers Specialized Service

Water Carries

Large Tonnage over Long Distance Bulk Commodities

3 Categories of Motor Carriers

Less than Truck Load LTL Truckload TL Small Parcel - Ground

Carrier Selection Criteria

TYPE of item shipped REQUIRED Delivery Time AVAILABLE Services RELIability/Service Quality FINANCIAL of CARRIER HANDLing of claim

Intermodal:

Takes advantage of different modes Shorter terminal delays Lower damage rates Less Handling Substantial Growth

Logistics

The management of goods from the point of origin to the point of consumption

Which is the bulk of Log. Costs

Transportation More than half of ALL Logistics Costs Could represent 40% of the item cost

3PL'S Services

Transportation Warehousing Inventory Cross-Docking

Private Carriers

Transportation for its company's own products and the company owns all related equipment and facilities.

Common Carriers

Transportation service to general public, all shippers, at published rates. Considerable flexibility in rates and routes

Transportation Carriers

Transports property or people by any means of conveyance. ex. motor carriers : LTL , TL, Small Parcel - Ground

T/F Each shipment must have a BOL

True; Bill of Lading a contract spelling out legal liabilities of all parties. Proof that a shipment was made and is evidence of ownership.

Custom House Brokers

Used for Import Activities Ensure documents are accurate and complete Can provide estimates of landed costs or payments to offshore suppliers, and insurance options available to shippers.

Water

Used inland and costal Inexpensive Slow Inflexible

Reassessment of Possibilities of using different transportation modes

Using Private trucking and Intermodal. Substantial Savings.

Transportation and Logistics Strategies

Value Analysis of Alternative Analysis and Eval of Shipper Price Analysis Cost Analysis Consolidation of Freight Reassessment of Different Transport Modes Outsourcing/3PL, ContractOut Safety Considerations Environmental Factors Dev. Closer Relationship with Carriers

Consolidation of Freight

Volume discounts may reduce transport costs. Systems contracts and blanket orders may help.

Disadvantages to Water Mode

Weather Security Concerns Requires Combination Climate Change Piracy Fuel Costs

Outsourcing/3rd Party Logistics/Contracting Out

When downsizing or focusing on core competencies, deciding to contract out to provide full logistics services should be considered.

Growth of Telecommunication comes from

increase size of service sector of the economy increase in knowledge workers importance of info sharing in all types of org.

Road operates under a

just-in-time system with suppliers in close proximity to mfg facility

Biggest problems facing Trucking Industry

lack of drivers, aging workforce, inability to attract qualified younger and minority candidates, expensive driver training programs, federal focus on unsafe drivers.

Unit Bill of Lading

4 Copies, extra is the railroad's way-bill. Moves w/ shipment and can assist in expediting freight movement. digital=electronic

The purchase of Logistics Services demands

A high degree of skill and knowledge if the costs of movement are to be minimized while meeting service needs.

Brokers

Agents that provide transportation service arrangements Charge shippers fee for arranging transportation services with a carrier.

Transportation Modes

Air (Cargo & Passenger) Water (Deep Sea, Lake, River) Land (Road, Rail) Intermodal Pipelines Telecommunication

Telecommunication- Radio Frequency Waves

Air - Wireless Copper Wire Fiberoptic Cable Transport instantaneously Unlimited Low Constraints High Network Costs Low Distr. Costs

Expedited Transportation

Any shipment that requires pickup service and includes a specific delivery guarantee. Typically less than 5 days. Via air, ground, LTL, or air export services.

Analysis and Eval of Suppliers

Carrier selection and eval systems can provide data needed for better decision making. Eval

Freight Bill

Carrier's invoice for services provided.

Examples of Water Transported Goods

Coal Grain Sand

Types of Carriers

Common Carriers Contract Carriers Exempt Carriers Private Carriers

Uniform Straight Bill of Lading

Complete BOL and contains the complete contract terms and conditions.

Environmental Factors

Concerns of clean air, water, the transport of hazardous material and fuel/energy consumption must be considered.

Intermodal Types

Containers on Flatcars - COFC Truck Trailers on Flatcars - TOFC

Development of a Closer Relationship with Selected Carriers

Data enabling better planning of transport requirements shared to take advantage of both buyer / carrier knowledge.

What type of trend do Logistics Costs have in the US

Decreasing

Factors that decline Logistics Cost

Deregulation of Transporation Technology Advances and E-Commerce Greaater emphasis on improving SC Process/Practice

Demurrage Charges

Detention Charges for Motor Carriers Incurred by shippers or receivers of merchandise.

Transportation Costs are influenced by

Distance Weight Density Stowability Handling Liability Market

Freight Claim

Document submitted to recoup financial costs from shipment loss/damage

Specialized Service Options

Expedited Transportation Small Shipment Same Day Service

Most recent cause of decline in logistics costs

Global Recesseion

When may transport costs account for less than 1% of total purchase costs?

High Value Low-Weight Low Bulk Example: Electronics Goods

Air Carries

High Value, Extremely perishable goods

Two types of Logistis

Inbout Outbound

Logistics Cost can be divided into 3 categories

Inventory Carrying Costs Administrative Costs Transporation

Cost Analysis/Reductions

Long Term Contracts Partnerships 3rd Party Involvement Freight Consolidation Demurrage Pckging all for cost reductions

What type of products may transport. costs account for as much as 40%

Low value, bulky, heavy Example: Agricultural commodities or construction materials.

Rail Advantage

Lower Variable Operation Costs Makes it attractive for hauling large tonnage over long distances

Goods Transferred by Logistics

Materials/Inventory Information

Value Analysis of Alternatives

May turn up totally adequate lower-cost transport arrangements

Concealed Loss or Damage

Merchandise is found short or damaged after the container is opened. Harder to determine where the damage occurred.

Land -Road

Motor Carriers, Trucks Most Flexible Mode Adv. of Point - to - Point Service, Any Distance, for varying weights and sizes.

Pipelines

Only transport products in either a liquid or gaseous state Limited Use Relative Low Operation Costs

Price Analysis

Rates vary substantially and decisions should be made ONLY AFTER considering all possibilities. Obtain Competitive Quotes Negotiation of BIG TICKET Transportation.

Unconcealed loss or damage

Referred to in situations when it is evident on delivery that loss or damage has occurred.

Safety Considerations

Safety issues may relate to pressure on drivers income, and shipper demands may result in shipper and carriers agreeing to legally unattainable schedules.

FOB Destination / Freight PrePaid

Seller Pays Freight Charges Seller owns goods In Transit Seller Files Claims If Needed

FOB Origin / Freight PrePaid

Seller pays Freight Charges Buyer owns goods In Transit Buyer Files Claims If Needed

Contract Carriers

Serves contractual shippers, for hire, to limited number of shippers under specified rates and services. Gen. lower rates because volumes are higher and predictable shipping.

Land - Rail

Share of market has declined steadily since WW2 Inflexible Slow High Loss and Damage Rates

LTL

Shipments are short haul, higher cost per hundredweight

Air Primary Advantage

Speed

Uniform Order Bill of Lading

Yellow paper, and is a sight draft bill of lading. Negotiable, surrendered to carrier at destination before goods are obtained. Prevents delivery until payment is made.

Expediting

applying pressure to a supplier in attempt to encourage faster delivery.

Supply plays a

vital role in delivery of goods and services in the supply chain