1. Level Two Supply Chain Management
Lecture 6: Fleet & Transport Management

2. Learning Objectives To recognise the various modes of transport
To understand what criteria should be used when selecting a mode of transport
To appreciate suitable modes of transport for differing products.

3. Question…….
What are the different transportation methods discussed in previous lectures?

4. Transport Modes
Road
Rail
Sea / Inland Waterway
Air
Pipeline

5. Characteristics - Road
Door to door collection and delivery
Fast, regular service
Reduces double handling and packaging
Can be used in combination with other modes (roll-on /roll-off)
Limited only by the road network – international implications
Options for full loads or consolidation of smaller consignments.

6. Characteristics - Rail
Ideal for bulky or heavy consignments
Railhead & track infrastructure can be limiting
Cheap, but often slow & inflexible service
Double handling & damage when shunting
Last mile has to be delivered by road

7. Characteristics - Water
Cost economies – ideal for bulk or low value goods
Flexibility – many liner services & ships
Availability – regular services & routes
Speed – slow journey time & turnaround at ports
Double handling is unavoidable & costly
Damage – caused by double handling
Delay problems – the weather can be a factor
Must have a port infrastructure to load & unload

8. Characteristics - Air Ideal for small, valuable & light consignments
Fast service over international distances
Delays can occur at airports – less packaging
Not door to door, last mile must be by road
‘Lead time economy’ due to speed, do not need buffer stocks
Uses empty cargo space in passenger aircrafts
Can be expensive, attracts a premium price

9. Characteristics - Pipe
Slow transit times
Constant flow of goods
Set up costs and time are high
Only suitable for small number of products
Single product use

10. Comparisons
12 ton road vehicle offers the highest useful load over short distances
Cargo vessel offers the highest density but is slow
Freight train has high capacity & high overheads
Cargo aircraft has highest productivity but low capacity

11. Considerations for Selection
Customer
Environmental
Product
Company

12. Customer Considerations
Geographical location
Delivery point features
Time restrictions
Size of order

13. Customer Considerations Cont.
Product knowledge
MHE (manual handling equipment) used
Service level requirements
Type of sale
After-sales service requirements

14. Environmental Considerations
Other road users
Infrastructure
Technology (vehicle and equipment)
Climate
Legal considerations
Political considerations
Road patterns

15. Product Characteristics
Weight
Size and shape
Fragile nature
Obsolescence
Danger
Risk

16. Company Characteristics
Service level policy
Sales territories
Warehouse locations
Manufacturing locations
Financial policies
Performance of competition
Choice of own service and/or 3PL and 4PLs

17. Considerations for Selection
Speed
Reliability
Cost

18. Dominant Transportation Modes

19. Fleet Vehicle Selection
Fit for purpose
Nature of use, ie annual mileage, climate
Characteristics of the goods to be carried
Specification of the vehicle

20. Routing and Scheduling
Demand – forecast of sales
Distance Factors
Vehicle Restrictions
Driver Restrictions

21. Transport Fleet Costs Economic primarily relating to cost
Acquisition method – Lease or Buy?
Fixed costs such as depreciation
Variable costs such as fuel and maintenance

22. Summary
The transportation mode is highly dependent on various internal and external factors
Customers, products, business, local environment and regulations all have to be considered

23. To Do Reading Refer to weekly reading list Online activity
Watch NHS logistics video
Discussions on the specific forum.

24. Reading List & Further Reading
CILT (2005) Careers in Logistics Management [online] available from [2 February 2014]
Rushton, R., Croucher, P., Baker, P. (2010) The Handbook of Logistics and Distribution Management. London: Kogan Page
Waters, D. (2009) Supply Chain Management: An Introduction to Logistics. London: Palgrave
Waters, D. (2010) Global Logistics. 6th edn. London: Kogan Page