logistics ch 13: transportation management

-Straight bill of lading (white paper) -Order bill of lading (yellow paper)

2 Bills of lading types:

-Long-form -Short -Preprinted

3 additional formats of bills of lading

rate

Price charged for freight transportation

fare

Prices charged for passenger transportation

modal shippers

Refers to a transportation manager who purchases a pre-specified level of transportation service and is indifferent to the mode(s) and/or carrier(s) used to provide the actual transportation service -Research indicates shippers are more interested in transportation metrics than in modes

Concealed loss or damage

Refers to situation where loss or damage is not apparent until after a shipment has been unpacked and inspected

making and receiving shipments

Refers to tactical planning and control of shipments along with supervision of freight loading and unloading

transportation management

Refers to the buying and controlling of transportation service by either a shipper or consignee •important as transportation is the most costly logistics activity

documentation

Serves practical function of explicitly stating the what, where, and how much is being transported -Potentially provides legal recourse -Transportation department is responsible for completing this to transport the firm's products

class rate system

System to simplify rate determination -based off of National Motor Freight Classification (NMFC) -simplifies based off of product, weight, and distance

Rate and service levels

Both __________ and ___________ may be negotiated due to economic deregulation -Allows transportation managers to take advantage of trade-offs between price and service

Liability for loss and damage

Factors used for determine product's freight classification -Considers, among others, a commodity's propensity to damage other freight, its perishability, and its value

Ease of difficulty of handling

Factors used for determine product's freight classification -Refers to challenges to handling that might be presented by a commodity's size, weight, and so on

stowability

Factors used for determine product's freight classification -Refers to how easy the commodity is to pack into a load -Possible considerations involve the commodity's ability to be loaded with hazardous materials and ability to load freight on top of the commodity

density

Factors used for determine product's freight classification -Refers to how heavy a product is in relation to its size -Viewed as primary factor for setting a product's classification

domestic terms of sale

When freight charges are paid for a particular domestic shipment

external audits

When work is performed by an independent third party to detect errors in freight bills (serves same purposes as internal audits)

weight groups

________ _______ are used to simplify shipment weight EX: ▪Less than 500 pounds (highest rate) ▪500-999 pounds ▪1000-1,999 pounds

-Detect current errors that result in overcharges -Correct these errors in the future

internal audits of freight bills are conducted to: (2 things)

weight x rate

transportation costs =

-Difficult to be aware of every possible carrier -Lack of agreement on the number of relevant factors

two challenges with carrier selection

1.Determine appropriate mode(s) 2. Select carrier(s) within the chosen mode(s)

two steps in modal carrier selection

-macro-environmental changes -economic deregulation

two types of changes that have allows for demands of higher levels of service quality and price/service competition:

transportation cost analysis

▪Especially valuable in the shipment consolidation decision ▪Facilitated by advances in information technology

freight-bill paying service

Automated service in attempt to pay carriers within a specific number of working days

performance scorecards

Can measure transportation performance through the use of:

-lower number -higher number

Commodity Classification Standards Board develops and maintains commodity freight classifications -Shippers prefer ________ classification number (lower rate) -Carriers prefer _______ classification number (higher rate) -Transportation managers can appeal a commodity's classification

bills of lading

DOCUMENTATION -Most important single transportation document -Functions as a delivery receipt when products are tendered to carriers

freight claims

DOCUMENTATION -Refers to a document that notifies a carrier of wrong or defective deliveries, delays, or other delivery shortcomings

freight bill

DOCUMENTATION Invoice submitted by the carrier requesting to be paid

rate basis numbers

Distances are simplified through ______ ______ ______ -Zip codes are replacing these

routing guide

Example of routing ▪Document that can provide a variety of shipment-related information

expediting

MAKING AND RECEIVING SHIPMENTS DUTIES Involves the need to rapidly move a shipment to its final destination

demurrage

MAKING AND RECEIVING SHIPMENTS DUTIES Penalty payment made to the railroad for keeping a railcar beyond the time when it should be released back to the carrier

routing

MAKING AND RECEIVING SHIPMENTS DUTIES Process of determining how a shipment will be moved between origin and destination

tracking

MAKING AND RECEIVING SHIPMENTS DUTIES Refers to determining a shipment's location during the course of its move

detention

MAKING AND RECEIVING SHIPMENTS DUTIES Same concept as demurrage except it usually refers to the trucking industry

consolidating shipments

MAKING AND RECEIVING SHIPMENTS DUTIES combining shipments more than 50 pounds and less than 500 pounds -To get a lower rate

commodity rate

One specific rate for every possible combination of product, weight, and distance

-Marketing -Manufacturing -Outbound shipping -Purchasing

Transportation managers also involved in other operations of the firm

-Product -Weight -Distance

Transportation rates based on three factors: