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Chapter 8 Intermodal And Special Carriers. Intermodal Transportation Involves the use of two or more modes of transportation in moving a shipment from.

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Presentation on theme: "Chapter 8 Intermodal And Special Carriers. Intermodal Transportation Involves the use of two or more modes of transportation in moving a shipment from."— Presentation transcript:

1 Chapter 8 Intermodal And Special Carriers

2 Intermodal Transportation Involves the use of two or more modes of transportation in moving a shipment from origin to destination, primarily through the use of the “container.” The development of a standard container that could be interchanged among all modes made modern intermodalism possible.

3 Intermodal Transportation Standardization of dimensions, hold down devices, and related items allowed the service providers to design ships, railcars, and highway chassis knowing the container or “box” would fit. The intermodal service combines the advantages (and disadvantages) of each mode used. Ex: Air  speed,expensive; motor  accessibility, cheaper but slower.

4 Intermodal Transportation The growth of intermodal transportation has been aided by the deregulation of U.S. transportation, the growth in global business, and the changes in the business environment. Substantial growth in global business, particularly in the off-shore sourcing of goods in the Pacific Rim countries by the U.S., led to the increased use of water- rail-truck intermodal service.

5 Intermodal Transportation Lastly, the economic reality of higher operating costs and driver shortages caused numerous motor carriers to divert long-haul traffic from all truck to piggyback in order to save costs and remain competitive. A mode common to most forms of intermodal transportation is the motor carrier because of the high degree of accessibility.

6 Piggyback Piggyback transportation includes the movement of motor-carrier trailers on flatcars (TOFC) plus containers in flatcars (COFC) A new innovation is the RoadRailer, which provides a railroad wit the ability to haul trailers on special wheel sets and avoid the use of flatcars.(Figure 8.2)

7 Piggyback RoadRailers are available in 48’ and 53’ lengths, and refrigeration units have been introduced. Increased use is being made of piggyback (COFC) for the domestic portion of product movements between the U.S. and foreign countries. In such moves, the container is commonly used because of its easy transferability from on mode to another and minimal additions to handling costs and total transit times.

8 Piggyback Nowadays, service providers, whether they are motor carriers, intermodal service companies, or railroads, can offer any type of service combination that the customer desires. Current offerings range from intermodal service offered through motor carriers to transporting shipper- owned trailers with the customer providing the highway portion of the service.

9 Containerization As noted above, the container, which is nothing more than a big box into which the freight is loaded, improves the efficiency of interchange among modes. The container also reduces the potential for damage and theft because the actual freight is not rehandled after it is loaded at the shipper’s facility.

10 Containerization Trailer comes in various sizes, ranging in length from 28 to 53 feet. Railroad flatcar is capable of handling various sizes of trailers, but longer trailers preclude loading two trailers on one flatcar, thereby increasing the cost per freight unit hauled. The trailer is loaded onto the flatcar by a variety of methods including driving, hoisting with a crane or lifting by means of a forklift- type device.

11 Containerization The most recent trend in rail-ocean transfer has been to load or unload the containers from the rail cars directly at shipside. The”on-dock” transfer saves both time and money by eliminating the drayage between the pier and the rail yard. The container used in intermodal air shipments is not the standard rectangular. Rather, it is smaller, narrower and typically rounded at the top to fit the contours of the aircraft.

12 Third-Party Transportation This trend towards the use of outside firms to provide logistics support grew out of many companies’ desire to concentrate their resources on what they do and leave other, non-income producing tasks to these specialists. Many of these third-party firms enjoy economies of scale that allow them to provide a manufacturer with logistics services for fewer costs than the firm could do themselves.

13 Third-Party Transportation GPS & tracking Another recent development has been for third-party firms to place their own personnel at the manufacturer’s plant or the consignee’s warehouse to handle the details of outsourced services. This frees the client’s staff to devote their attention to those areas which are beyond the day to day details.

14 Special Carrier Forms Surface freight Forwarders hold a unique place among carriers. A forwarder is a “person” that offers itself to the general public (other than a railroad, motor, or water carrier) to provide transportation of property for compensation in the ordinary course of its business.

15 Operations Historically, forwarders consolidated small shipments into truckloads or carloads. In most cases, the forwarder provided local pickup and delivery but historically used boxcars to provide linehaul service.

16 Air Freight Forwarders The air freight forwarder serves the shipping public with similar pickup, a single bill of lading and freight bill, one- firm tracing, and delivery service, as does the surface forwarder. The air freight forwarder, though, is generally used by shippers of goods having high-product-dollar value or time- sensitivity value, or both.

17 Characteristics These firms have concentrated upon offering door-to-door service from shipper to consignee. This service relieves a significant traffic arrangement burden from shippers and consignees. It also fills a void because airlines tend to emphasize terminal-to terminal services and have been involved only to a limited degree in surface pickup and delivery services.

18 Service Benefits Presents some major transportation service benefits For one, speed of service is vital for many movements such as spare parts, emergency replenishment goods, medical components, and business documents. Further, this industry represents a single- carrier, full door-to-door service. Its main disadvantage lies in its high rates, but these are usually considered by shippers in light of the service benefit received relative to the product’s value and time- sensitivity.

19 Air Forwarder Future In the international arena, air freight forwarders provide the shipping public with transportation movement and the handling and processing of many international documents. Thus, in this sector, the air forwarders provide a value-added service in addition to simple movement.

20 Freight Brokers The definition of a broker is as a “person” other than a motor carrier, and agent, or an employee that, as a principal or agent, sells, offers for sale, negotiates for, or holds itself out by solicitation,advertisement, or otherwise selling, providing, or arranging for transportation by motor carrier.

21 Freight Brokers Most truckload motor carriers cannot afford to maintain a nationwide sales force, but their trucks operate throughout the U.S. The broker normally represents the carrier and seeks freight on their behalf to avoid moving empty equipment. They may also represent the shipper and will provide trucks for loading. Brokers can provide intermodal services as well as other logistics offerings, such as warehousing and cross docking.

22 Freight Brokers Brokers do not have to file any price schedules with the federal government. A broker does not issue a bill of lading and they are not required to maintain cargo liability insurance since they are not considered to be a carrier. These two factors are the primary difference between a broker and a freight forwarder.

23 Roles Basic shipper services include the arrangement of service, the verification of the trucker’s insurance and safety rating, verification of equipment condition, and the negotiation of a freight transportation price. Brokers also are involved in LTL and warehouse consolidation for shippers, as well as insurance acquisition for truckers.

24 Shippers’ Agents and Consolidators Shippers’ agents are also referred to as intermodal marketing companies (IMC), as well as consolidators or agents. Agents play a cost-savings role for both the shipper and the railroad. Most IMCs have volume, wholesale contracts with the railroads. They can offer lower prices than most shippers could obtain on their own.

25 Characteristics A disadvantage associated with agents is in the area of liability. The shipper usually pays the freight agent who, in turn, pays the rail carrier. There is the possibility, and it has occurred occasionally, that the agent will retain the freight charges and cease operations, leaving the shippers with, in effect, a second freight bill. Therefore, before hiring any agent, the shipper should investigate the agent’s reputation and stature.

26 Owner-Operators The term owner-operator was traditionally applied to a person who owned or leased a truck and often a trailer and made his or her equipment and driving service available to for-hire carriers. Owner-operators were confined to serving regular for-hire carrier firms that needed the service on an overflow basis when carrier equipment and labor were not available

27 Owner-Operators They also commonly worked for special commodity carriers that did not have the equipment but booked freight and used owner- operators to carry it from origin to destination. Owner-operators are playing a key role for some newly evolving for-hire carriers. Some now carriers do not have employee drivers or company-owned equipment. That is, long-haul movement as well as regular pickup and delivery operations are often performed under an arrangement between the carrier and the terminals and owner-operators.

28 Express Services and Courier Services This carrier group started by offering fast service, usually door-to door, for small, high- value goods and documents. These package and express carriers provide both air and surface transportation and offer a variety of pricing and service plans designed to offer the customer a range of options. Express firms operate with large networks of terminals, pickup and delivery vehicles, and line-haul service. UPS is most notable in this regard.


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