1. Chapter 8
Transportation 1

2. PIPELINE
The first pipeline in US was built in This pipeline (6,5 km length) for oil transportation had used.
By increasing of production and consumption of natural gas and oil, pipeline systems building has been also increasing.
Transportation costs are lower than in the road and rail transport, but sea transport has lower costs (especially for petroleum products) than pipeline system.

3. PIPELINE
Only a few products can be transported by pipelines:petroleum products, gas, liquid chemicals
Pipeline has dual role: it is mean of transportation, and in the same time road.
In contrast to the other modes, only goods move – means stand.
Pipelines have very high fixed costs but very low variable costs.
Losses and damages are rare
Climatic conditions have minimal effect
Flow is monitored and controlled by computer
Not labor intensive

4. Bakü-Tiflis-Ceyhan Oil Pipeline-2006

5. Blue Stream Pipeline-from Russia through Black Sea

7. PERFORMANCE CHARACTERISTICS
Relative Rankings of Transportation Mode by Cost and Operating Performance Characteristics
PERFORMANCE CHARACTERISTICS
Delivery-Time Variability
Mode of Transportation
Costb
1=Highest
Average Delivery Timec
1= Fastest
Absolute 1=Least
Percent d
1= Least
Loss and Damage
Rail 3 4 5
Truck 2
Water
Pipe 1
Air
a Service is assumed to be available
b Cost per ton-mile
c Door-to-door speed
d Ratio of absolute variation in delivery time to average delivery time

8. INTERMODAL TRANSPORTATION
The carriage of goods by at least two different modes of transport in the same loading unit (an Intermodal Transport Unit-ITU) without stuffing or stripping operations when
changing modes.
Unit load: vital element of intermodal-consignment of freight into a swap body or in a container in order to save from transhipment or repacking time-cost-handling.
Intermodality enables economies of scale within a transportation system where modes are used in the most productive manner.

9. INTERMODAL TRANSPORTATION
Enables a systems approach to transport : MODE-INDEPENDENT DOOR-TO-DOOR CONNECTION
Safer transit for dangerous products
Reduced consumption of fossil fuels
Reduction in road traffic congestions
Lower transit costs
Faster delivery times
More efficient and cost-effective use of the transport system in an environmentally sustainable manner.

10. INTERMODAL SERVICES 1. Piggyback 2. Road Railers 3. Other Combinations
TRAILER-ON-FLATCAR (TOFC)
CONTAINER-ON-FLATCAR (COFC)
2. Road Railers
3. Other Combinations
Air-water,air-rail,rail-water

11. 1. PIGGYBACK
A motor carrier trailer or a container is placed on a rail flatcar and transported from one terminal to another.
Combines low cost of long haul rail and flexibility and convenience of truck.
Railroad carries freight on the long haul and trucking company picks up and delivers between customer and railroad.

12. TOFC
TOFC (trailer-on-flat-car) refers to transporting truck trailers (semi-trailers) on rail flatcars, usually over longer distances than truck normally haul

13. COFC
COFC (container-on-flat-car) refers to transporting standardized containers.
Container is transferable to all transportation modes with the exception of pipeline

16. 2. Roadrailers
An innovative intermodal concept was introduced in late 1970’s.
Roadrailers (trailertrains) combine motor and rail transport in a single piece of equipment.
Trailer has steel rail wheels and rubber truck tires-can go on highway as well as on railroad without the need of rail flatcars
Less switching time
Disadvanteges: added weight of rail wheels-higher costs and higher consumption of fuel.

17. Logistics Villages
The clusters in which various organisations provide all activities related with logistics.
With the beginning of 2012, there are 70 logistics villages registered to Europlatforms (i.e: in Germany, France, Italy, Greece, etc.)
In Turkey, there are 12 logistics villages to be planned by TCDD: İstanbul (Halkalı), İzmit (Köseköy), Balıkesir(Gökköy), Uşak, Eskişehir (Hasanbey),Samsun (Gelemen), Denizli (Kaklık),Mersin (Yenice), Kayseri (Boğazköprü),Konya (Kayacık), Erzurum (Palandöken) ve Bilecik (Bozöyük). :

19. Logistics Villages (Cont’d)
Istanbul Metropolitan Municipality has also planned 2 logistics villages: Hadımköy and Tuzla
Besides these, there are two more projects developed by public and private institutes:Tekirdağ/Çorlu and Manisa (MOSBAR)

20. Some activities provided in Logistics Villages
Warehouse
Distribution
Customs
Inventory Management
Packaging
Order Management
Materials Handling
Intermodal Transportation

21. Qatar Logistics Village Layout

22. Logistics Villages – Nuremberg (Germany)

23. CARRIER OPTIONS Third parties Small-package carriers Motor Rail Air7 4
CARRIER OPTIONS
Motor
Rail
Air
Water
Pipeline
Intermodal services
Third parties
Small-package carriers

24. -THIRD PARTIES
Similar to channel intermediaries that provide linkages between shippers and carriers
Often, third parties do not own transportation equipment
They partner with a number of carriers who provide the necessary equipment to transport their shipments

25. Types of Third Parties Transportation brokers7
Types of Third Parties 5
Transportation brokers
Freight forwarders (domestic and foreign)
Shippers’ associations
Intermodal marketing companies ( shippers’ agents)
Third-party logistics service providers
Fourth party logistics service providers
Small package carriers

26. 1.Transportation Brokers
They provide services to both shippers and carriers by arranging and coordinating the transportation of products.
They charge a fee to do so, which usually is taken as a percentage of the revenue collected by the broker from the shipper.
The broker partially replaces one of the firm’s own traffic department

27. 2. Freight Forwarders
Freight forwarders purchase transport services from various carriers, although in some instances they own the equipment themselves.
They consolidate small shipments from a number of shippers into large shipments moving into a certain region at a lower rate.
Domestic/international or surface/air
Because of consolidation efficiencies, these companies can offer shippers lower rates than the shippers could obtain directly by the carrier.

28. Differences Between a Freight Forwarder and a Transportation Broker
A forwarder is the shipper to a carrier and the carrier to a shipper.
A forwarder can arrange for transportation of freight or any mode.
A forwarder is primarily liable to a shipper for cargo loss and damage.
A broker is neither a shipper nor carrier, but an intermediary between the two.
A broker can arrange for freight transportation only by a motor carrier.
A broker is not usually liable for cargo loss and damage, although many do provide this coverage.

29. 3. Shippers’ Association
In their operations, shippers’ associations are much like freight forwarders, but they differ in terms of perception by regulatory authorities.
A shippers’ association can be defined as a nonprofit cooperative that consolidates small shipments into truckload freight for members’ companies.
They primarily use truck and rail carriers for transport-large blocks of rail wagons-use also TOFC(trailer on flat cars)

30. 4. Intermodal Marketing Companies (IMC or Shippers’ Agents)
They specialize in providing piggyback services to shippers and are an important intermodal link between shippers and carriers.
They purchase large quantities of TOFC/COFC services at a discount and resell them in small quantities.

31. 5. Third-Party Logistics Providers ( 3PLs)
Third party logistics providers typically specialize in integrated operation, warehousing and transportation services that can be customized to customer’s needs based on market conditions and the demands and delivery service requirements for their products and materials.
The companies known as ‘logistics’ companies in market.
Balnak Logistics, Elmas Logistics, Barsan Logistics...

32. 6. Fourth-Party Logistics Providers ( 4PLs)
The 4PL acts as a single point of interface with the client organization and provides the management of multiple service providers through a teaming partnership or an alliance.
4PL uses a 3PL to supply service to customers, owning only computer systems and intellectual capital.
To be successful, a 4PL leverages a full range of service providers (3PLs, IT providers, contractlogistics providers, call centres, etc.) along with the capabilities of the client and its supply chain partners.

33. 7. SMALL-PACKAGE CARRIERS
For companies such as electronic firms, catalog merchandisers, cosmetic companies, textbook distributers, small-package carriers can be important transportation options
Uses a combination of different modes, especially air.
FedEx, DHL

34. Legally Defined Forms of Transportation
Common Carriers: published rates, offering to general public, demand is uncertain
Contract Carriers: serve to a limited number of shippers under contractual agreements, demand is known, specified cost
Exempt Carriers: transport certain products like fish, newspapers,unprocessed agriculturals.
Private Carriers: a firm owns and transports primarily for its own products-leases equipments- flexibility-cost- service advantage

35. Cost-of-Service Pricing
...establishes transportation rates at levels that cover a carrier’s fixed and variable costs, plus allowances for some profit.
Value-of-Service Pricing
...is based on charging what the market will bear; and is based on the demand for transportation services and the competitive situation.

36. Incentive Pricing Arrangements
Quantity Discounts
Cumulative quantity discount
on the amount of purchases over some prescribed period of time
Non-cumulative quantity discount
*applied to each order
* larger shipments

37. Mode/Carrier Selection Process9 7
Mode/Carrier Selection Process
Problem recognition
Search process
Choice process
Post-choice evaluation

38. Constraints for Mode/Carrier Selection
Economic and resource constraints
Competitive pressures
Customer requirements

39. 1. Problem Recognition
Customer requirements, dissatisfaction with an existing mode, and changes in the distribution patterns of the firm affect this stage

40. 2. Search Process
Transportation executives scan a variety of information sources to aid them in making optimal mode/carrier decisions
Possible sources are:
Past experiences,
Carrier sales calls,
Company shipping records,
Customers of the firm

41. 3. Choice Process
...involves the selection of an option from the several modes and carriers available
the transportation executive determines which of the available options best meets the firm’s customer service requirements at an acceptable cost

42. 4. Post-choice Evaluation
Once management has made its choice of mode or carrier, it must institute some evluation procedure to determine the performance level of the mode/carrier
customer complaints,
cost studies, audits,
reviews of on-time pick-ups and delivery performance

43. Creating possible alternatives depend on: 1) Technological characteristics of the origin and destination points (Port,Road,Railway) 2) Characteristics of goods 3) Distance 4) Quantity of goods 5) Available time for transit 6) Customer service level required