1. McGraw-Hill/Irwin Copyright © 2011 by The McGraw-Hill Companies, Inc., All Rights Reserved. Chapter 9 Delivery

2. 9 - 2 Transportation Industry Segments Air cargo Air passenger Motor freight (trucking) Railroad Marine Intermodal Pipeline

3. 9 - 3 Types of Carriers Common carriers Contract carriers Exempt carriers Private carriers

4. 9 - 4 Mode and Carrier Selection Criteria Required delivery time Reliability and service quality Available services Type of item being shipped Shipment size Possibility of damage Carrier financial situation Handling of claims

5. 9 - 5 Third-Party Logistics Suppliers Integration of services desirable transport and logistics Opportunity for logistics/transport companies to provide more value-added services under deregulation Outsourcing issue for manufacturers $200 billion global industry Growth market

6. 9 - 6 Third-Party Logistics Suppliers Facilitated by advances in information technology Logistics deals with the flow of goods and information TPL providers differentiated on the basis of: geographic scope industry specialization Potential economies of TPL economies of scale economies of scope specialized expertise

7. 9 - 7 The Selection of the FOB Point Determines Four Things 1. Who pays the carrier 2. When legal title to goods being shipped passes to the buyer 3. Who is responsible for preparing and pursuing claims with the carrier 4. Who routes the freight Since deregulation of the transport sector, purchasers are increasingly taking control of transport arrangements as a means of controlling costs

8. 9 - 8 Terms of Sale: Possible FOB Points

9. 9 - 9 Terms of Sale: Possible FOB Points (continued)

10. 9 - 10 Elements of a Transportation and Logistics Strategy Value analysis of alternatives Price analysis Opportunities for freight consolidation Analysis and evaluation of suppliers Reassessment of the possibilities of using different transport modes Development of a closer relationship with selected carriers Outsourcing, third-party logistics, contracting out Safety considerations Environmental factors