Maritime Logistics Management Chapter 1-4
Own Transport
- Advantage of flexibility, greater control, closer integration of logistics and easier communications - Transport can be tailored to organization's needs with best type of vehicles and fleet size - Can be expensive - Only larger organizations can afford capital investment and costs
Choice of equipment/warehouse
- Affect speed of movement, type of materials moved, costs, layout, employees - Higher volumes of throughput use higher levels of automation - Low volumes use manual - Medium volumes throughput mechanized - High volumes are automated - Physical characteristics of loads - Number of loads - Distance to be moved from size of warehouse - Required movement speeds (how quickly the warehouse responds to demands)
Third-party carriers
- Better services, lower costs than own account transport - Large enough to reduce costs through economies of scale - Offers a wide range of services - Provided by common carriers - When an organization signs a contract with a contract carrier, the contract carrier can take over most of the organization's transport for an extended period
Types of vehicles:
- Bulk carriers Carry large quantities of cheap bulk materials in large holds such as grain or ores - Tankers Carry any liquid especially oil - Ferries Usually RO-RO that carry road vehicles over short distances - Barges Used for shorter routes Cheaper to run than normal ships
Communication Infrastructure
- Countries strive to deliver letters sent to a national address on the day after its mailed but its difficult - Many countries postal services are unreliable - Issue is safety of mail as postal services have a lot of employees so difficult to screen employees effectively - Private services gain more market share due to good reliability and reputation
Telecommunication Infracstructure
- Data has doubled over the years - Countries able to build a sufficiently large domestic infrastructure to carry increased load - But countries who cannot keep up (w the economy) have phone service that is unreliable - But now people switch to cellular phone which provides portability and convenience and bypass the land based system
Port Infrastructure consists of:
- Depth of water - Bridge Clearance - Cranes - Port Operations - Warehousing Space - Connections with land-based transportation services - Port capacity
Rail Advantages
- Discourages competition - Inflexibility
Road Advantages
- Flexibility Ability to give door-to-door service, avoids transfers to other modes and can give a shorter overall journey time - Users don't have to build and maintain their own tracks - Vehicles don't have to keep such rigid timetables, so they can go for journeys on short notice and little planning - Large number of carriers work in the same area
Air
- For products where speed of delivery is more important than cost - Limits airfreight to small amounts of expensive materials
Warehousing Infrastructure
- Important for a shipper to obtain info about the warehousing infrastructure where shipments will be in layover - International logistics manager have to know if cargo will be protected from the rain, sun and possible floods - Shippers also use public warehouses without resorting to international shipment to provide better customer service by delivery goods in shorter lead time. But no sources of info on availability and quality of public warehouses so best to actually visit it as standards may be diff
Disadvantage of Water
- Inflexibility due to being limited to appropriate ports - Journeys from suppliers to customers need a change of mode - Slow and need time to consolidate loads and transfer them at ports
Road/Rail & Sea
- Largest international movements & compromises transport by containers with pre-carriage and on-carriage via road vehicles/rail wagon/sea carriage
Problem w Airport Infrastructure
- Many airports cannot accommodate large jumbo aircrafts as runways were designed for smaller aircrafts - As cities around airports grew, it became landlocked so it's now unable to extend runways - An airport can suffer from runway constraints
Manual Warehouse
- Material handling done by hand, little equipment except trolley and baskets - Items are small and light enough to be lifted via manpower - Shelves are low enough to reach safely - Hand trucks controlled by workers are provided for moving pallets or carousels to bring materials to pickets
Advantage of water
- Most common for international transport due to its low unit costs
Pipeline Advantages
- Moves large quantities over long distances - Cheapest way of moving liquids over long distances - Can add flexibility by delivering to range of locations
Choice of modes
- Nature of materials to move - Volume and distance - Value of materials (the more expensive, the more the inventory costs and also encourages faster modes) - Importance (even low value items need fast and reliable transport) - Transit times (as operations that have to respond quickly to changes cannot wait for critical supplies using slow transport) - Reliability (consistent delivery more important than transit time) - Cost and flexibility to negotiate rates - Reputation and stability of carrier - Security, loss and damage
Choice of Ownership
- Operating costs - Capital costs - Customer service - Control - Flexibility - Management skills
Automated Warehouse
- Operating costs are reduced, and aspects of service improved - But high investment in equipment - Distance moved is minimized - High speed as automation such as stacker cranes can reach points very quickly - Warehouse management system records material locations and controls movements - Reduced errors, increased productivity, reduced paperwork, improved space utilisation
Infrastructure
- Port - Canals and Waterway - Airport - Rail - Road - Warehousing
Difference between priv and public warehouse
- Private is to buy/lease - Public is third-party
Warehouse size depends on:
- Products Number of products, Demand patters (average level, volatility, seasonality) Physical Features (volumes, weight, packing) - Customer Needs Special storage conditions (climate control, packaging) Customer Service Level (quick response, lowest cost) Lead times (supplier lead times, customer lead times, transport mode) - Warehouse Operations Economies of scale Material handling equipment (storage systems, handling equipment) Layout and facilities (racking, damage control area, office)
Activities within a warehouse
- Receiving goods from upstream suppliers - Identifying the goods, matching them to orders finding their intended use - Unloading materials from delivery vehicles - Doing any necessary checks on quantity, quality and condition - Labelling materials so they can be identified - Sorting goods as needed - Moving goods to bulk storage area - Holding them in stock until needed - Moving materials from bulk storage to a smaller picking store - Moving materials to a marshalling area - Assembling materials into orders - Packing and packaging as necessary - Loading delivery vehicles and dispatching the order - Picking materials from stores to meet order
Intermodal Transport
- Refers to journeys that involve 2 or more different modes of transport - Aim is to combine the benefits of separate modes, but avoid the disadvantages of each
3 types of air service
- Regular service Major airlines use the cargo space in passenger aircrafts that is not needed for baggage - Cargo service Operators run cargo planes on regular schedules. These are public carriers, moving goods for any customers. - Charter Operations Where a whole aircraft is hired for a particular delivery
Mechanised Warehouse
- Replace some muscle power with machines - Typical mechanical equipment such as reach trucks, order picking machines, forklift trucks - Can store heavier and bigger goods than manual warehouses - Standard sized packages/containers used for all movements
Air Disadvantages
- Required transfer to other modes of transportation - Higher cost
Water Transport
- Rivers & Canals (aka Inland Waterways) - Coastal shipping (moving materials from one port to another along the coast) - Ocean transport (across the major seas)
Basic Intermodal Systems
- Road/Rail & Sea (container) - Road/Sea (trailer & ro-ro) - Road/Rail - Road/Air - Sea/Air
Airport Infrastructure
- Runways - Operation Hours - Warehousing Space
Modes of Transportation:
- Sea - Air - Road - Rail - Pipeline Chosen mode should depend on the type of goods to be moved, location, distance and value.
Utilities Infrastructure
- Services sent via underground or overhead lines (e.g. gas pipelines, electricity lines, fibre optic and cable TV) - Services can be distributed directly to the customer's location - Infrastructure is improved every year, allowing for more efficient distribution - Services can be disrupted by adverse weather - High installation costs
Benefits of containerisation
- Simplified transport and flow of goods - Easier and faster handling - Genuine door-to-door service - Faster deliveries - Reduced loss due to damage, misplacement and pilferage - Reduced packing costs - Lower insurance costs - Separation of incompatible goods - Use of less congested routes - Improved transport encourages trade
Pipeline Disadvantages
- Slow (10km/h) - Inflexible, only transporting to fixed points - Only carry large volumes of certain types of fluid
Components of multi-modal infrastructure
- Through pricing - Computer tech - Main international carrying vehicle: Ship, aircraft, train, truck
Quality
- Traffic utilises paved roads and unpaved roads serve remote, rural areas - To decrease congestion, countries have built a network of high speed links that avoid smaller cities while connecting the larger ones - But they have rules and regulations that may limit size of trucks and the speed - There are also tolls, which makes it expensive - The Chunnel Tunnel has shortened shipping times between 2 countries
Pipeline
- Transport of products such as pulverized coal in oil, oil, gas, water
Rail
- Used for heavy and bulky loads over long land journeys - Trains can maintain a consistent, reasonably high speed and can link with other modes to carry containers and bulk freight - It has very high capacity and low unit costs due to the infrastructure - Can be used to large volumes of relatively low-priced materials (coal, minerals)
Purpose of warehousing & aims
- Warehouses are designed for raw materials collected before operations and finished goods during distribution to customers - Store 'work in progress' consumables and spare parts Aims of warehousing: - Giving high customer service - Controlling all movements of materials effectively and without errors - Providing necessary storage at key points in a supply chain
Road Disadvantages
- Weight limitations (normally carry loads up to 20-30 tons) - More often used for smaller loads so it's relatively expensive - Used for shorter distances - Vulnerable to congestion and traffic delays - Deliver finished goods instead of bulky raw materials
Land Bridges
- containerised ocean cargo have to cross landmass - journey is faster and cheaper than by ocean - allows shipping lines to use post-panamax ships on their trans-pacific and trans-atlantic routes which is more efficient
road/rail
- earliest forms of intermodal transport. was a small container that could be interchanged between road trailer and rail car - was used for household removals - overcomes the environmental and pollution objection as trailers can be loaded onto rail wagons for the long haul - achieves rail movement without the need to handle goods at road/rail interface
Warehousing Space
- important as there is a very short supply of refrigerated warehouse space
Bridge Clearance
- in older ports, bridges are too close to the water so it leaves little clearance for tall ships or those with outsized cargo - so cargo has to be dismantled or the ship has to be lowered with ballast water or delivery to be made during low tide
Connections with Land-Based Transportation Services
- issue is that there is congestion in the access roads to port terminals so cargo may get delayed - ports are near the ocean but the final destination is located between the port and hinterlands - so, this creates a serious strain which causes traffic jams and resentment from local population
Operation Hours
- limited due to noise pollution as large cities are close to airports - but specialised cargo airports located outside of cities are able to operate 24/7
Saint Lawrence Seaway
- links the Great Lakes to the St. Law Seaway and Atlantic Ocean - but seaway is narrow and only few ships can pass thru its locks - plagued with ice during winter so its closed during winter periods
Canals & Waterways Infrastructure
- maritime transportation is dependent on the existence and proper maintenance of canals and other channels - post-panamax ships are the current trend but waterways have lost their monopoly as developments had to circumvent their shortcomings
Depth of water
- may be sufficient to accommodate Panamax ships, but not the newer larger ships - therefore, port authorities have to engage in dredging to allow ships with drafts that exceed 40 ft - but can be expensive but ports have limited alternatives for improvement of their capabilities
Rail Infrastructure
- most important for long distance land transportation - but many countries lost their focus on shipping cargo and shifted to high-speed passenger transportation to compete with airlines
Warehousing Space
- necessary to protect cargo from weather elements - if storage area are not available or are overcrowded, cargo will be left exposed and may get damaged
sea/air
- not fully multi-modal as units used are not fully compatible - involves use of maritime container loaded with pallets that are discharged and individually handled on the air leg - only used where ultimate destination is inadequately reached by land surface transport - usually used for urgent humanitarian relief
Water and sewer
- supply may lead to interruptions, rationing and recurring shortages - when overpopulation occurs, water gets overtaxed which leads to leaky pipes and wastage - quality is a concern as contamination may occur
Globalisation
- to serve a global market so it increases total demand - increases demand results to benefit E.O.S - enhances ability to market goods
Road/Sea
- use of through road trailer or truck, may be accompanied by its tractor unit during its journey or unaccompanied for any ferry crossings that occur on its route
modal interfaces in multi-modal transport
- used for ports, airports, depots, railheads - interruptions are most likely to occur once the vehicles arrive
Road Infrastructure
- usually used on the last leg of journeys - no shortage of roads but there are issues of quality and maintenance of network, congestion, existence of high speed links between major metropolitan areas - concern is not about density but usability
Cranes
- width of Post-Panamax ships are a challenge for cranes - so, create an indented berth to allow cargo unloading from both sides or increase reach of cranes as vessels get higher but its costly - this allows the ship to be loaded with up to 12 cranes instead of 6 - speeds up loading and shortens time ships spend in port which increases profitability
Growth of multimodal through freight transport #6
Air freight: Air transport can now compete with shipping so this opened new markets for perishable cargo
Private Warehouse Pros
Better control on facility set up & equipment Better control on resources and processes Flexibility on facility design Lower running costs in long term Tax benefits Potential return in investment
Public Warehouse Pros
Conservation of capital Minimize level of risks Flexible in getting space Provide better economies Relieve from facility management and costs Clarity on warehousing costs
Growth of multimodal through freight transport #3
Consumer expectations: Increase expectations of living standards & wages
Productivity levels for Containers, Manual and Pallets?
Containers: 30 Manual: 1.7 Pallets: 4.5
Growth of multimodal through freight transport #1
Growth in world trade: Was a pressure to search for new means of handling the international movements of general cargo
Private Warehouse Cons
High costs of investment Opportunity costs Not easily scalable Potential loss of investment
Growth of multimodal through freight transport #4
Independence: Newly independent countries had high aspirations for the living standards and developments of their countries
Public Warehouse Cons
Lacks control Lacks in service specialization Constraints during peak period Possible higher operational costs
Port Operations
Many ports have strong unions which limit operations.
Private Warehouse
More public warehouses are used so that companies can focus on their core businesses
Growth of multimodal through freight transport #5
Newly independent countries: Took advantage of improved industrial processes to stregthen their own industrial bases
What is through transport?
One price for the entire journey
What do shippers want from through transport?
One-stop global shopping - Major shippers want to deal with a smaller number of logistics suppliers globally - Container line alliances permit their members to offer the worldwide deal that is needed - Independent mega-carriers also don't suffer from the inherent instability of the alliances
Important metrics:
Speed (Important for perishable cargo) Reliability (Importer needs to hold safety stock to guard against delays in shipment arrivals) Frequency (Smaller the stock, more frequent the service)
Growth of multimodal through freight transport #2
Technological developments: War had seen great advances in mass production, manufacturing and electrical & electronic engineering
Public Warehouse
The flexibility to deal with short term changes
What is logistics?
The management of the flow of goods, information and resources. Including energy and people between point of origin and point of consumption to meet consumer requirements. Involved integration of information, transportation, inventory, warehousing, material handling and packaging.
Multi-modal trade routes
Trans Pacific, North Atlantic, Europe
What is transport in Logistics?
Transport is responsible for the physical movements of materials between points in the supply chain. E-Commerce can deliver intangible products, but most products include goods which require transport for delivery to customers.
Advantage of road/rail and sea
ability to handle almost any type of commodity, large indivisible loads including small packages. has worldwide cover with reliable and frequent services.
Panana Canal
allows ships to avoid travelling around South America but slow as ships can only travel in 1 direction. wait times are 22 hours on average
Narita Airport
e.g Narita Airport was stretched to capacity and cannot build a 2nd runway as farmers refused to sell their land. As flights in and out of Narita is limited, the landing fares were increased. Only having 1 runway increases the probability of delays as the slightest malfunction can immobilize the whole airport.
advantage of road/sea
flexibility and speed. best suited to routes with minimal sea crossings
efficient modal interfaces include:
physical transfer of goods which involves - terminal facilities - labour and handling equipment placing goods into temporary storage to wait for next mode involves - suitable storage - labour and equipment - security there are also statutory requirements like customs, health and security which involves - documentation - officials arrangement of next modal leg involves - timetabling delivery - documentation - next on-carrying vehicle
disadvantage of road/sea
pressure from governments to move long haul road traffic to rail/sea or environmental and pollution grounds