1. Strategic Channel Intermediaries: Ports
Port selection is a very important part of the international logistics strategy.
Different ports often specialize in different types of shipments.
Selecting the wrong port can add miles, time, and therefore cost to a shipment not appropriately routed.
Overall door-to-door transit time and variability are important factors.

2. Customer Service
Providing the customer with what they need in a way that provides value to them
Make them happy!!!!
Who is your customer?

3. Elements of customer service
Dependability
Time
Convenience
Communications
Honesty
Knowledge of who they are and what they do!!!

4. Resource allocation
The difficulty comes in tailoring each country’s customer service mix
Cost vs. service

5. Barriers to Customer Service
Controllable factors
Short term decisions vs. long term benefits
Uncontrollable factors
Customers/employees/service providers, etc.

6. Customer Service Performance
Always learning, always improving
Know what your customers value and monitor the system you have in place to deliver it!
“If you do not measure it you cannot manage it”

7. “Make it easy for them to shop in your store” What are the customer service variables that must be addressed?

8. Global Transportation
The mode of transportation decided upon after evaluating the trade-offs must fit with the system
Speed/Reliability/Flexibility/Cost/Security
Profit Contribution

9. The Transportation System
The Role of Transportation
Move the product
Provide advantage— “on time low cost ??”
Add value—Time and place
Supply Chain management
Logistics
Transportation

10. “Logistics managers are finding that they need to do much more in terms of conceptualizing, designing, and implementing logistics initiatives that may be effective globally” IT IS A SYSTEM!!!!
John Coyle

11. Modes of Transportation
Water—Vessels, Barge
Motor -- Trucks
Rail
Air
Pipeline

12. Rail-Air-Road-Water-Pipeline
Cost vs. Speed
Packaging vs. risk of damage
Flexibility vs. dependability
Product vs. mode

13. Domestic Water Carriers
Relatively low cost mode; do not own the rights-of-way; easy entry and exit.
Typically a long distance mover of low value, bulk-type mineral, agricultural and forest products
Low rates but long transit times
Low accessibility but high capability

14. Domestic Water Internal water carriers- rivers Great Lakes carriers
Coastal carriers
Intercoastal carriers
Long Distance – Low Value – High Density

15. Rail One can move a great deal of product vs. road or air
Is it timely enough for your needs?
Limited access points

16. Long distance- high volume
Rail
Advantages
Low rates
Safety
Reliability
Disadvantage
Accessibility
Transit time
Long distance- high volume

17. Intermodal Transportation
Refers to use of two or more modes of transportation cooperating on the movement of shipment by publishing a through rate.
Logistics managers are looking for the best way to move shipments and these often attempt to take advantage of multiple modes of transportation, each of which has certain
useful characteristics.

18. Intermodal Transportation
Cultural bias towards using only one mode and this makes change more difficult.
Is this still true today???
Certain types have been fairly well developed, such as rail/water, motor/water, rail/motor, and motor/air.

19. Intermodal Transportation: Containerization
“Land bridge” concept may apply for international shipments where oceans are separated by a large land mass.
For example, containers moving from Japan to Europe may dock at Long Beach, CA, transfer the containers to a railroad, and reload the containers onboard another ship in Norfolk, VA., continuing on to a European port.

20. Intermodal Transportation: Piggyback
Trailer-on-Flat-Car (TOFC)
Over the road trailers ride in special rail cars.
Takes advantage of motor flexibility and rail’s long haul economic advantage.
Multiple service plans for shippers.
Some railroads provide varying levels of service, differentially priced.

21. Intermodal Transportation: RoadRailers
Newest concept referred to as a “RoadRailer”
Essentially a trailer that has been reinforced to ride on a rail bogey and be coupled together directly without first being placed on a rail flat car
Saves weight and locomotive power and thus fuel for the railroad
Special lower rates
Motor competitive transit times

22. Pipelines Advantages Disadvantages Low cost Not disrupted by weather
Capabilities
Accessibilities
Security???

23. Motor Carriers Advantages Disadvantages Accessibilities Transit times
Reliability
Safe
Disadvantages
High cost
Quantity?
Shipment size/transit time vs. carrying cost

24. Air Advantage Disadvantage Transit time Cost Accessibility
Product must have a high weight to value ratio

25. Carrier Selection Determinants
Transport cost
Transit time
Reliability
Accessibility
Capabilities
Security/Safety
Tasks performed
System constraints
The cheapest freight does not necessarily mean the least landed cost

26. Water
Advantages
Low cost
Reliability
Disadvantages
Slow
Accessibility

27. Types of Service Liner ships
Operate on a pre-established schedule with determined ports of call
Tramp ships
Operate wherever the market dictates

28. Size of Vessels Dead-weight tonnage Definition
The maximum weight that a ship can carry
Since the ship also carries bunker and stores, the maximum weight that a ship can actually carry is lower than its dead-weight tonnage.
Total capacity of ship expressed in long tons (2,240 pounds), or metric tons (2,204.6 pounds).
The fuel that a ship carries on board and that it needs to travel is called bunkers

29. Size of Vessels Gross and Net Tonnage Gross Tonnage Net Tonnage
The total volume of a ship’s carrying capacity, measured as the space available below deck, and expressed in hundreds of cubic feet.
The Gross Tonnage is the basis upon which ships pay taxes or pay fees to transit through a canal.
Only measures capacity below deck.
Net Tonnage
Obtained by subtracting the volume occupied by the engine room and the spaces necessary for the operation of the ship (crew quarters, bridge) from the gross registered tonnage.

30. Size of Vessels Displacement Displacement tonnage Light tonnage
The total weight of the ship, when fully loaded, measured by using the weight of the water being displaced.
Light tonnage
The total weight of the ship, when empty, measured by using the weight of the water being displaced.

31. Vessel Sizes (BULK) Handy: 20,000 - 35,000 tons.
Handymax: 35, ,000 tons.
Panamax: 50, ,000 tons.
Suezmax: 75, ,000 tons.
Cape: 100, ,000 tons.
Very Large BC: 150, ,000 tons.
Ultra Large BC: 300, ,000 tons.

32. Ocean Going Vessels
Types-- General Cargo, Bulk, Tanker, Container, RO-RO
Size-Handy,Handymax, Panamax
Capesize

33. Non-Vessel-Operating Common Carriers
Shipping companies that do not own ships
An NVOCC purchases space on a ship and re-sells part of that space to companies needing to ship cargo.
Shipping line is paid for space and weight whether or not the NVOCC resells the space (at a higher rate).
NVOCC acts as a freight consolidator and aggregates Less-than-Containerload (LCL) freight into a full container.

34. PNW versus SC Australia to EGYPT
Columbia River / Egypt:
10,045 miles via Panama Canal
30 days + 2 days canal transit
Total 32 days.
Adelaide, Australia / Alexandria, Egypt:
7,675 miles via Suez Canal
23 days + 2 days canal transit
Total 25 days.

35. Major Canals
Suez
Panama

36. PNW versus SC Australia to EGYPT at Market Average
Difference: 2,370 miles or 7 days 1 hour 17 minutes.
Panamax: days x $10,000/day = $70,535.
Fuel: 29 tons x $200/ton x days = $40,910.
Total $111,445 / 60,000 tons = $1.86 per ton, 5 cents/bu.

37. PNW versus SC Australia to EGYPT at Market Highs
Difference: 2,370 miles or 7 days 1 hour 17 minutes.
Panamax: days x $50,000/day = $352,675.
Fuel: 29 tons x $200/ton x days = $40,910.
Total $393,585 / 60,000 tons = $6.56 per ton, 17 cents/bu.

38. Delivered Cost Counts!

39. Interesting Facts
Bulkers typically run at 14 knots/hour, 336 miles/day.
Burnes about 29 tons/day of fuel.
7,685 gallons per day.

40. Historical Earnings Handymax
Today, we are going to address an important issue. It is difficult to find a grain buyer that does not deal with freight in some way.
Handymax