transportation final project

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INTRODUCTION
Transportation is the movement of products from one node in the distribution channel to another. By providing for the swift and uninterrupted flow of products back and forward through the distribution channel, transportation provides companies distinct markets on an equal footing. Transportation also permits wider and deeper penetration of new markets far from the point of production. In addition, by maximizing vehicle and materials handling capacities and cargo requirements, effective transportation permits distributors to leverage economies of scale by lowering the per unit cost of transporting the product. Efficient transportation enables distributors to reduce the selling price by holding costs down, thereby providing for more competitive product positioning. Finally, transportation provides other business function with essential information concerning products, market place and time utilities and transit costs, and capabilities necessary for effective enterprise planning and operational execution. The first step in the management process is to establish the cost effectiveness of private transportation fleets and the search for and selection of public carriers. The goal is to ensure the highest level of customer service at the lowest possible price. The selection of a carrier is normally a combination of the price of service, carrier financial stability, reliability and mode availability and subjective elements. The second step involves the ongoing choice of selected transport mode to meet daily shipment requirements. Modes should be chosen that will perform the service for the cost, satisfy any special shipping needs required by the customer, exceed the rates and services offered by competing carriers and minimize the likelihood of loss, damage or delivery delay. Once the mode and carrier has been selected, shippers as a third step must work with carriers to establish an effective schedule and the proper vehicle routing to ensure timely customer delivery. The fourth step of the process is the preparation and completion of the necessary shipping documentation. Finally, managers must be diligent in developing transportation performance measurements that will provide them with quantifiable data necessary for increased productivity and competitive advantage.

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Transportation functionality
Transportation is the most visible of all functions of logistics and high contributor to logistics cost. We can see trucks, containers and wagonloads of material being moved from place to place as an activity directly associated with trade and business. We should also appreciate that this is an activity that adds highest amount of cost to the activity of making inputs and outputs available to consumers. Transportation function moves the products to meet customer expectations at minimum cost.

Functions of Transportation

Product movement:What is moved? Raw Material, Semi Finished items, WIP, Finished goods, packaging material, rejected material - movement is required up or down the supply chain. How is this done? What Resources are used? Resources used by transportation: A. Temporal - product is locked up during transit, hence inaccessible. We have to spend a positive amount of time in transporting the material. Time is a resource [temporal resource] that is expended in transportation. During the time the product is locked up costs are incurred in proportion to the time B. Financial - several cost elements like administration costs, salaries, maintenance costs are expended. Loss on account of product loss and damage also needs to be accounted for. Fuel consumed is a big cost in transportation
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C. Environmental – this activity is a fuel guzzler, eats up natural fuels like oil, directly and indirectly. - 67% of all domestic fuel usage in the US is by transportation activity. Creates congestion, air pollution and noise pollution. Environmental cost is tangible and substantially intangible. As transportation utilizes temporal, financial and environmental resources items must be moved only when product value is enhanced

Product Storage:Temporary storage in stationary vehicles or Vehicles kept moving on a circuitous route - Product storage is expensive in a transport vehicle. But some times keeping overall cost in mind this is adopted. A. When unloading and loading is more expensive than storage B. When storage space is limited. [Situation when inventory levels are very high]

Principles of Transportation
There are two fundamental principles guiding transportation management and
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operations. They are economy of scale and economy of distance.

Economy of scale:It refers to the characteristic that transportation cost per unit of weight decreases when the size of the shipment increases. It is common knowledge that larger the capacity of the transport vehicle more goods can be transported at a time which will decrease the cost per unit of transport. If smaller is the capacity of the transport vehicle then to transport a large amount of goods, more trips will have to be made which will increase the cost per unit of transport. Example: Rail or water transport is less expensive in case of bulk transport than smaller capacity vehicles like motor or air. A transportation economy of scale exists because fixed expenses such as administrative costs, invoicing costs, equipment costs associated with moving goods and materials get spread over the entire weight of the load. This will help to decrease cost per unit of the goods transported. Example: Suppose the cost to administer a shipment is Rs. 10.00. Then for a 10 kgs. shipment the cost of transporting per unit of the product becomes Re.1.00, while for a 1,000 Kgs shipment the cost of transporting per unit of the product Re.0.01. Thus it can be said that an economy of scale exists for the 1000 kgs shipment.

Economy of distance:It refers to the characteristic that transportation cost per unit of distance decreases as distance increases. Transportation economy of distance is also referred to as a tapering principle since rates or charges taper (decrease) with distance. The rationale of economies of distance is similar to that for economies of scale. Longer distances allow the fixed expenses to be spread over more miles, resulting in lower overall per mile charge. These principles are important considerations when evaluating alternative transportation strategies or operating practices. The objective is to maximize the size of the load and the distance that is shipped while still meeting customer service
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expectations. Example: local trains in Mumbai are of three types’ fast locals, semi-fast locals and slow locals. Traveling through fast local saves times as it does not halt at every station, but in case of slow trains it halts at every station which consumes time more than the fast trains or the semi-fast trains.

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Participants in Transportation Decisions
Normal commercial transaction has limited number of parties to the business decision. They are seller, buyer and directly or indirectly government. But a transportation decision has number of parties to the decision. These parties have very important roles to play in transportation environment. Parties to a transportation decision are those who have a stake in the transportation. They are 1. Shipper: shipper is a party who wants to transport the goods to his customer in a business transaction 2. Consignee is the party to whom the goods are sent 3. Carrier is the service provider who carries the consignment from shipper to consignee. 4. Government has a role to play as they are keenly interested in transportation and have a stake in it. Transportation makes business happen which is fundamental to the economy of any society. Economic prosperity to the society is the objective of the government of the day. Government also collects tax on the transaction. Government represents general public whose interest they have to protect. 5. General public is another party who has a large stake in the transaction involving transportation. Public want goods produced at different parts of not only country but also world. Their demand cannot be met without transportation.

Roles and perspective of each party
Shipper and consigneeredictable and minimum transit time, minimum cost, minimum taxation, specified pick up and delivery times, zero loss and damage, timely exchange of information and invoicing. These are the needs of the above parties. They look at transportation from this angle. They are the basic elements of transportation. Business between them initiates the need for transportation

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Carrier:What do carrier wants? Revenue maximization and cost [labor, fuel and vehicle costs, taxation] minimization. Flexibility in pick up and delivery times to consolidate movement. Carrier facilitates the business between shipper and consignee. He gets paid for his service. He adds value to the supply chain by moving the material from supplier to the customer. Carriers’ strike in our country is a repetitive phenomenon to protest against role of government.

Government:Government while playing their role exercise control on all the players. They want the business to flourish, at the same time benefits to reach uniformly all over the country. They also have to provide the necessary infrastructure to support transportation. It is said that one of the causes that expedited the break up of Soviet Union was the weak infrastructure on account of which products could not be transported to far-flung parts of the country. Hunger deaths in India in spite of self-sufficiency in food production are examples to illustrate the interest of the government. Government controls carrier rates and licenses. Government owned carrier service is probably the cheapest option for transportation available to business. Government supports transportation by providing a network of roads, Airports and ATC, Ports and Harbors. Government wants taxes to support above activities in national interest. Ultimately the consumer, general public, has to bear the burden of tax.

Publicublic as consumers trigger transportation activity by demanding products and services of high quality from all over the world at minimum cost. They have concern for safety as accidents of various kind have been a bye product of transportation. Degradation of the environment is another threat about which public are concerned as transportation is at the root cause of many such concerns. Eg. Degradation of atmosphere and water, rise of noise levels, oil spills due tankers carrying cargo of crude oil. When these parties with separate and distinct interests interact transportation environment is created. Conflict of interests raises issues that interrupt smooth transport of goods in the country. Government as the main arbiter steps in to iron out these differences in the interests of business.

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Modes of Transport
Transportation modes are an essential component of transport systems since they are the means by which mobility is supported. Geographers consider a wide range of modes that may be grouped into three broad categories based on the medium they exploit: land, water and air. Each mode has its own requirements and features, and is adapted to serve the specific demands of freight and passenger traffic. This gives rise to marked differences in the ways the modes are deployed and utilized in different parts of the world. Recently, there is a trend towards integrating the modes through intermodality and linking the modes ever more closely into production and distribution activities. At the same time, however, passenger and freight activity is becoming increasingly separated across most modes.

Types of Transport
The basic modes of transportation are rail, highway, water, pipeline and air.

Rail:India has amongst the largest railway network in the world. Every city, town, village has a rail connection. Through railways very large volumes of goods can be transported economically over long distances to remote places in the country. But railways in general incur high fixed costs because of expensive equipment (i.e. railways must maintain their own rail track meant exclusively for them) switching yards and terminals. However the railways experience relatively low variable operating costs. Railways help to transport raw materials from extractive industries which are located at considerable distances. Besides this railways also transport massive amount of steel, automobiles, war equipment, across the country. Rail roads basically concentrate on the container traffic and are becoming more responsive of the customer needs, emphasizing bulk industries and heavy manufacturing. They have expanded their intermodal operations through alliances and motor carrier ownership. Railroads are even concentrating on development of special equipment. There are unit trains which are entire train carrying the same commodity, which are bulk products such as coal or grain. Unit trains are faster, less expensive to operate and quick as it can bypass rail yarts and go direct to the product's destination.

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There are also various different types, such. as articulated cars for extended Rail chassis, double stack railcars, have 2 levels of containers, thereby doubling the capacity of each car. It also reduces chances of damage because of their design. These technologies are being applied by railroads to reduce weight, increase carrying capacity, and facilitate interchange. The above examples show the attempts being made by the railways to retain and improve their share of overall transportation market.

Road Transport:Road transport forms an essential part of any transport activity, whether rail, sea or air. It is essential as a supplementary and complementary mode of transport to complete movement by other modes of transport. Eg. From one terminal i.e. the railway station the goods have to be carried to the destination like an area by road.

Motor Carriers:Motor carriers can be divided into categories according their legal status: ? Common carriers, who must serve all who ask their services (provided, of course, the carrier has the necessary equipment). ? Contract carriers, who haul freight for individual shippers under specific written agreements. ? freight they haul. Private carriers, who own the

? Exempt carriers, who haul farm products, fish or livestock, or who operate within the confines of a single city. Note that any carrier becomes exempt while hauling the named products. ? Brokers, who own and operate no equipment but bring together (as any broker does) those who wish to ship freight and those who wish to haul it. Highway transportation has increased rapidly since the end of World War II. This is because Motor carrier industry results from' door-to-door operating flexibility and

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speed of intercity movement. They are even flexible because they can operate on each and every kind of roadways. In comparison to railroads, motor carriers have relatively small fixed investments in terminal facilities and operate on publicly maintained highways. Although the cost of license fees, user fees, and tolls are considerable, these expenses are directly related to the number of over-the-road units and miles operated. The variable cost per mile for motor carriers is high because a separate power unit and driver are required for each trailer or combination of tandem trailers. Labor requirements are also high because of driver safety restrictions and the need for substantial dock labor. Motor carriers are best suited to handle small shipments moving short distances. The characteristics of motor carriers favor manufacturing and distributive trades, short distances, and high-value products. Motor carriers have made significant inroads into rail traffic for medium and light manufacturing. This is also because of delivery flexibility, that they have captured a major chunk of the market. In short, the prospect for maintaining a stable market share in highway transport remains bright. This industry even has a few problems, and one of the primary difficulties relate to increasing cost to replace equipment, maintenance, driver wages, and platform and dock wages. Although accelerating, labor rates influence all modes of transport; motor carriers are more labor-intensive, which causes higher wages to be a major concern. One more threat for hire-motor carrier industry is over-the-road transportation by shipper-owned trucks or by specialized carriers under contract to perform transport services for shippers. Since 1980, the industry segments have become more definitive since deregulation, and include truckload (TL), less than truckload (LTL), and specialty carriers. TL segment includes loads over 15,000 pounds that generally do not require intermediate stops for consolidation. LTL segment of the industry loads less than 15,000 pounds that generally requires stops at intermediate terminals for consolidation. Because of terminal costs and relatively higher marketing expenses, LTL experiences a higher percentage of fixed costs then TL.

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These characteristics have caused extensive industry consolidation, since deregulation has resulted in small number of relatively large carriers worldwide. Specialty carriers include package haulers such as Federal Express and United Parcel Service. These firms focus on specific requirements of the market or product. It is quite apparent that highway transportation will continue to function as the backbone of logistical operations for the foreseeable future. In short Road transport offers certain advantages like Door to door service customers which neither rail nor neither sea nor air transport can offer.
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to

? On per unit basis, the cost of making a road is 1/6th that of laying a railway line. Capital investment in case of railways is much less then railways designed to carry equivalent quantum of traffic.
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? Road transport provides employment to six million persons (two million direct and four million indirect) Road transport faces a number of problems. This is evident from the following facts: ? of diesel fuel in the country. There is an occasional storage

? Vehicle availability in the country has been problematic. With the recent entry of a number of manufacturers, the situation has improved to some extent. ? The cost of components and accessories, such as tyres and batteries, has escalated tremendously. ? The Octroi and police check posts are to many, resulting in heavy detention to road vehicles. ? The present Motor Vehicle Act regulating the issue of licenses and permits and movement of vehicles is very restrictive. It was decades ago to control and regulate traffic. The current requirements of traffic are for development. There are persistent demands from various transport associations for suitable amendments of the Motor Vehicle act. But they do not seem to receive due attention.
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? Conditions on Indian road are very bad and hazardous. They tend to reduce speed of vehicles, which leads to wastage of natural transport capacity. ? Roadside maintenance service facilities have not developed though found necessary.
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and

The system of national, zonal and state permits restricts free growth of road transport but the system has to be followed.

Water _

transport:

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One of the oldest modes of transportation is water. In terms of time factor, they may be slow. But, they can carry more shipment, at reduced cost over longer distance. Water transport could be of inland type or oceanic transport. Inland water transport Inland water transport is used mainly for transport; within a country. In our country Inland water transport through rivers and canals is quite popular because of the low cost and bulk transport. But here, the inland water transport system heavily depends upon the rain and in many places on the tides. So, in our country, we cannot guarantee the functioning of inland water throughout the year at the same efficiency. Oceanic Transport Oceans act as huge waterways for transport of goods form one country to another. Oceanic transportation includes import and export of crude and bulky commodities like materials which are removed from mines, cement, chemical, crude oil, iron ore, coal, chemicals like sulphur, crude petroleum, and selected agricultural products, etc. The main advantages of transport by water are the cost and capability of the operation. The capability of water to carry large tonnage at low variable costs -makes it in demand. When a company desire low freight rates and the speed and the time of transport are secondary, it has the option of selecting water as a mode of transport. The main disadvantage of water transport is the limited range of operation and
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speed. Unless the origin and destination are adjacent; supplement haul by rail or truck is required. Water transport isn't all that flexible. Labour restrictions on loading and unloading at docks create operational problems and tend to reduce the potential range of available traffic. Also, a highly competitive situation has developed between railroads and inland water carriers in areas where parallel routes exist.

Pipelinesrimarily, pipeline is used for the transport of crude petroleum, refined petroleum and natural gas. Pipelines are also used for the transportation of certain types of chemicals, Pulverized dry bulk materials such as cement and flour via hydraulic suspension system, and sewage and water in cities. A significant fixed cost is incurred while setting up the pipeline and related infrastructures. Thus, given the nature of costs, pipelines are the best suited when relatively large and stable flows of materials are required. E.g.: pipeline may be best suited to transport crude petroleum from the port to the refinery. But, to transport refined petrol to a gas station does not justify the use of a pipeline and this is better done by a truck. There is a talk going on between India, Iran and Pakistan regarding the transportation of crude oil from Iran to India with the help of a pipeline which will pass through Pakistan. This will reduce the cost of transporting crude oil from Iran to India. In comparison with the other modes of transport, pipelines operate on a 24 hour basis, seven days a week. They stop functioning due to change in the commodity to be transported, or due to maintenance. Unlike other modes of transport, pipeline does not have any empty containers or vehicles which are to be returned to the origins. A high fixed cost for pipelines normally results from the right of way constructions and requirements at the control stations and pumping capacity. Another-disadvantage of pipeline is that they are not flexible. Once the route of a pipeline is fixed, it is not changeable. Again pipelines are restricted with respect to the types of commodities which can be transported through them. Only products in the form of gas, liquid slurry can be handled by the pipelines. One advantage of pipelines is that, once they have been constructed, they are not labour intensive for operational purposes as other modes of transport. So, their variable operating cost is low.
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Air Transport:Air transport though new as compared to other modes of transportation, has gained large popularity in transporting various commodities. The basic advantage of Air transport is its high speed. By air, the time required may be just a few hours, which may be days by other modes of transport. However this being a major advantage, Air transport also has various disadvantages. These are: ? Air transport is a costly affair. ? Air transport is limited by 'lift capacity' i.e. goods upto certain load (weight) can be transported by aircrafts. ? Air freight variable cost is very high due to fuel, maintenance and labour intensity of both in flight and ground crew. The fixed cost of air transport is low as compared to rails, water and pipeline. In fact, air transport ranks second only to highway with respect to low fixed cost. Airways and airports are maintained by public funds and terminals 'are by local communities. The fixed costs of airfreight are associated with aircraft purchase and the requirement for specialized handling systems and cargo containers. But the air freight variable cost is extremely high as a result of fuel, maintenance, and labour intensity of both in-flight and ground crews. Even though it has all these disadvantages, high speed of air transport often helps in compensating its other disadvantages. No particular commodity dominates the freight carried by air transport. E.g. big courier companies such as DHL, Fed Ex have their own air crafts to transport couriers between different countries within a short time.

Other Modes of Transport:Other nodes of transportation includes the freight forwarder who accepts small shipments and charge less carload (or less truck load or plane load) rates and consolidates the small shipments into carload truckload, or planeload tots, which are then sent by the lower quantity rates. Frequently, the freight forwarder acts as a traffic department for small companies, which usually ship in less carload lots. Shippers' cooperatives offer much the same services as the forwarder in consolidating small shipments into larger ones, except that the profits of the business are returned to the members of the cooperative. Small packages can also be sent via speed post, and can use some of the, expedited delivery services the Indian Post System now offers.
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Transport Costing
Following are the essential elements of transportation to be taken into account:

Transport Mode:The most critical decision is the "selection of appropriate mode of transport. This fixes two basic elements of distribution function:a) Transit time or time lapse between production and sale; b) Level of transportation costs. There is an inverse relationship between transit time and transport cost; the lower the transit time, the higher the transport cost. However, a decision that takes into account only one cost factor cannot be justified. An evaluation of the effect of transit time on other costs must also be considered. Unsold production represents a high cost, and the longer the transit time, the higher the level of unsold production.

Inventory Costs:A first class service to clients often requires immediate delivery and, hence a higher level of inventory at the market centre. Economy, on the other hand, calls for minimum inventory. The level of output held in stock is dictated by:a) Transit time: If the time lapse between production and sale is longer, the level of inventory becomes higher. b) Sales pattern: If the pattern of sales is unpredictable, higher inventory levels are caused. c) Production pattern: If the production pattern is erratic (unpredictable), higher (inventory levels have to be maintained to prevent stock outs. Assuming that the sales and production patterns are largely fixed, the important variable, which can influence stock, levels in transit time. As transit time is reduced, the level of static (Non moving) stock can be reduced with accompanying stock
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reduction.

Transit Capital:Capital can be released by changing the proportion" of the total output in transit. This can be done by adjusting the transit time. As transit time is reduced, the quantity of goods in transit can be decreased with an associated reduction in transit inventory costs. By realizing the capital cost of transit inventory and goods in transit, capital commitments can be reduced, and more capital can be available for other purposes.

Obsolescence:When a slow or erratic mode of transport is employed, a higher level of inventory is necessary to ensure continuous, prompt delivery to 'the customer. However, when designs change rapidly, obsolescence reduces the market value of the products in store. Rapid advances in technology bring about swifter technical obsolescence. Any goods in the pipeline realize a lower figure when new models are introduced by a company or its competitors. Air distribution can overcome this problem, and the effect of such obsolescence can be minimized.

Packaging:The nature of packaging of a products often determined by the mode of its transport. E.g. Because of the dry conditions of carriage, short transit times and minimum handling, air cargo generally requires much less packaging than other forms of long distance transport. Goods dispatched by air may require only a dust cover or even no cover at all. In some cases, savings on the packaging of sophisticated products may more than pay for the actual transport charges. Less packaging may lead to other advantages too. These include lower unpacking costs and lower chargeable weight for freight.

Insurance:Insurance risks are based on transit time as well as the possibility of damages enroute. With faster transit times, skillful handling, substantial reduction in damage and greater security in transit, insurance premiums tend to fall substantially.

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Cost of breakages is an important factor in any cost benefit analysis. Therefore, only that mode of transport must be selected which substantially reduces real damage in transit. This calls for a selection of the routes which are more direct and which avoid transshipment, Handling equipment must also be more sophisticated. Containers can be used by shippers for door-to-door transportation, thereby avoiding all handling of goods by the carrier.

Pilferage:Many expensive administrative problems associated with breakages also pilferage. apply to

Deterioration:In many surface, cargos Deterioration may be avoided only by complicated and expensive packing to counteract mechanical shock, exposure to weather or unfavorable temperature etc. Some cannot be stored at all, except at great expense and others deteriorate slowly. Deterioration can be costly in terms of packing stock losses and expensive conditioning in store. It can only shut the door on many distant markets. A high speed of transport and the frequency of services can overcome many of these problems.

Transport Costs:Transport can be divided into 3 phases: (i) Delivery to docks airport or railway station. (ii) Transport from one terminal to another. (iii) Delivery from the terminal to the consignee's place.

Miscellaneous costs:Local taxes, octroi, toll taxes etc during transport.

Customer Service Costs:Shortage of product when demanded by the customer leads to customer dissatisfaction and thereby loss of sale for the company. So customer service should be raised to be able to meet customer expectations. When we try to raise customer service level costs are incurred conventionally, companies stockpile to raise service level But the current thinking is to reduce response time to customer need rather than
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increase the stock as costs of inventory are well understood.

Freight rate structure

Freight rates are transportation rates charged by carriers for shipping the goods to the consignee’s premises. These rates are structured round some principles. Some of the principles are commercial nature and some of them are structured by the state.

Principle of freight rates
Should cover actual cost of transportation:Fundamental principle is that the rate should cover the cost without fail. Factors influencing cost of transportation A. Fixed costs: • Interest on capital invested in the fleet • Depreciation • Insurance premium • Administrative overheads and expenses on fixed facilities B. Semi fixed costs: • Salaries of the staff • Miscellaneous maintenance expenses directly related to running of the transport vehicle. C. Variable costs: • Cost of fuel and lubricants • Maintenance directly attributable to a particular trip. Damage to the vehicle and also the cargo. E.g. Hilly roads, bad roads, war effected sea routes

Vehicle utilization:Carrier likes to gain maximum mileage out of his vehicle. If vehicle is idle it is a big loss to the carrier organization. Hence the carrier would like to run his vehicle at top

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speed to cover max. Distance at min time. While structuring the rates carrier would like to charge more if opportunity for maximum utilization is limited. Quote higher rates if following are not conducive to the above ? Hence vehicle can not be driven fast. Road conditions are bad.

? Terminal detentions [congestion, formalities, for loading unloading (handling) etc.]: a delay at the terminal brings down vehicle utilization as the vehicle is idling. If the destination is known for this kind of delays carrier would charge higher rates. Obtaining a return load [market factors]. If the destination does not offer opportunity for a return load carrier asks for a higher rate as would not be able to utilize his vehicle during return trip. Normally if the destination is a production center one would always find return trip to consumption center. But the other way round probability of return load is very low.
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Nature of goods, hazardous, corrosive [liability, insurance]. Such goods are detrimental to the safety of the transport vehicle and operating staff. Hence rates are high when such goods are shipped.
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Density, consignment light by weight: when the consignment is light by weight the truck becomes full without full load being loaded. Hence the carrier doesn’t get paid for the full load. So he hikes his rates when the consignment is light.
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Storability, shape and size of the product. When the load has an odd shape speed of the vehicle is reduced to accommodate the center of gravity. This brings down the utilization apart from being risky.
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Traffic Bearing Capacity:-

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transportation adds value by making the product available to the customer. But the cost incurred by the shipper while transporting should not outweigh the value added. The carrier structures rates keeping this principle in mind.

Public use:state introduces the principle that the transportation of essential commodities should be done at a lower rate.

Government Policy:freight rates are controlled by the state for promotion of certain type of trade and development of certain type of industry as per the industrial policy prevalent at that time. Freight rates are hiked or depressed by state the to meet the objectives of the policy.

Profit:Freight rate should cover costs of operation, capital investment and margin for reasonable return on investment. It should also compensate entrepreneurial time and efforts. Business should generate enough funds to provide for future development of business. The freight is expected to generate enough money to cover all these requirements.

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Transport infrastructure
Infrastructure is the main facilitator for any activity to take place. For transportation to take place a strong infrastructure is primary. If this infrastructure is inadequate transportation gets slowed down resulting into a major obstacle in the growth of trade and business in that area.

Elements of transportation infrastructure

• • • •

Terminal facilities - well maintained loading unloading facilities, Vehicles- trucks, ships or wagons depending on the mode. Their size, Right of way- passage to move on. Rails, roads, airways, limitations on Prime movers – the powerhouses moving the vehicle of transport

space for movement of vehicles, platforms, railway yards

shape & speed

speed, weight, height etc. If we use this particular passage.

shortage of which seriously affect transportation. Shortage of good locomotives impairs the utility of railway as a mode of transport.
•

Carrier organizations – are the transportation service providers in
business. Transportation is their core business. Good service provides a vital fillip to business and trade. Railways, roadways, airlines, shipping lines are service providers.

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Measuring Relative Importance Of Each Mode
We measure relative importance of each mode as of now or over a specific time span by measuring the modal characteristics. Importance is the popularity or wide spread usage of this mode in business. Modal characteristics are System mileage, Traffic volume, nature of traffic composition and revenue.

System mileage:Mileage covered by the modal net work. Like total length of roads in the road network in miles or kilometers is System mileage for road as a mode. This measure explains to what extent road is being used or how popular in business as a mode of transport today.

Traffic volume:Traffic volume is the amount of ton kilometers moved by a mode. This is a better measure as this indicates the tonnage shipped by this mode as well.

Revenue:Revenue is the amount of transportation business in rupees or dollars transacted by a mode. In simple terms how many rupees worth material is shipped in this mode.

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Nature of traffic composition:What variety of goods is moved by this mode is a measure to indicate the spectrum of goods handled. This speaks of the flexibility of the mode.

Multimodal Transport/Intermodal Transport
Multimodal/intermodal transportation is the use of more than one mode of transport for the movement of shipment from the origin to its destinations. In this system intermodal operators use multiple modes of transport to take the advantage of the inherent economies of each & thus provide integrated service at the lowest total cost. Multimodalism is all about coordination 1. Coordination of the different modes of transport. 2. Coordination of the documentation. 3. Coordination of the commercial & physical aspects of the commercial transaction between the buyer & the seller.

Intermodal transport chain

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Four major functions define an intermodal transport chain:
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Composition:-

The

process of assembling and consolidating freight at a terminal that offers an intermodal interface between a local / regional distribution system and a national / international distribution system. Ideally, loads of freight coming from different suppliers are assembled at distribution centers so they can be forwarded to high capacity modes such as rail and maritime shipping. The dominant mode for such a process tends to be trucking as it offers flexibility and door-to-door services. Activities such as packaging and warehousing are also included in the composition process, which is closely linked with the function of production.
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Connection:- Involves a

consolidated modal flow, such as a freight train or a containership (or even fleets of trucks), between at least two terminals, which happens on the realm of national or international freight distribution systems. The efficiency of a connection mainly derives from economies of scale, such as doublestacking or post-panamax containerships.
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Interchange:-

The

major intermodal function takes place at terminals whose purpose is to provide an efficient continuity within a transport chain. Those terminals are dominantly
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within the realm of national or international freight distribution systems, with ports being the most notable example.
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Decomposition:- Once

a load of freight has reached a terminal close to its destination it has to be fragmented and transferred to the local / regional freight distribution system. This function, which is linked with the function of consumption, dominantly occurs within metropolitan areas and involves unique distribution problems also known as urban logistics.

Piggyback /Trailor-on-flat-car (TOFC)/Container - in-flatcar (COFC)
1.

The intermodal transportation is achieved by coordination of railway &

roadways 2. Goods in trailor/container etc are loaded on truck, which will be further loaded to Rail Detaching the trailor/container from rail & reattaching to truck. 3. It is widely used & accounting for maximum freight cargo movements in recent years.

Piggyback and double stack Train Cars
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One of the first attempts at piggybacking dates back to 1872 when the Barnum & Bailey Circus used its own special train of flat railroad cars to tour cities in the United States. It took 3 to 5 hours and considerable effort to unload and load trailers, but the concept remained and piggybacking started to be adopted by railroad operators. Containerization changed piggybacking to stacking and then to double stacking where possible. Double stacking of containers (Container on Flat Car; COFC) saves much more convoy space than the piggyback method (Trailer on Flat Car; TOFC) with the added advantage of not to have to carry a trailer. However, several rail lines are not compatible with double stacking because of the required height clearance for bridges and tunnels (5.5 meters). Converting a rail line to double stacking can be a costly undertaking, especially on the much older European rail system where bridge clearances tend to be lower, and such investments are done over high priority corridors.

Fishyback
1. The intermodal transportation is achieved by coordination of water mode &

roadways 2. Goods containing boxes are loaded on truck which will be further loaded to ship. At the destination it will be unloaded from the ship & reloaded on truck. 3. It is widely used in export import freight cargo.

Trans-ship
1. The intermodal transportation is achieved by coordination of water mode &

railways 2. Goods containing boxes are loaded on rail, which will be further loaded to ship, at the destination it will be unloaded from. The ship & reloaded on rail trucks are used in this mode. 3. It is used for bulk movement of freight cargo.

Birdyback/Airtruck
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----------------------------------------------------------------------------------Transportation---------1. The intermodal transportation is achieved by coordination of airways &

roadways. 2. Goods containing boxes are loaded on truck, which will be further loaded to aircrafts, at the destination it will be unloaded from the aircrafts & reloaded on truck. 3. It is used for speedy delivery.

Multimode Transportation through Combination
RAIL COMMON PIGGY BACK

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ROAD

COMMON, CONTRACT, EXEMPT, PRIVATE

FISHY BACK

WATER

COMMON, CONTRACT, EXEMPT, PRIVATE

TRAIN SHIP

AIR

COMMON, CONTRACT, EXEMPT, PRIVATE

AIR TRUCK [BIRDYBACK]

WATER OR AIR

LAND BRIDGE
LAND [RAIL OR ROAD]

WATER OR AIR

Some Important concepts of Transportation
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1. A four-wheeled, usually horse-drawn vehicle with a large rectangular body, used for transporting loads. 2. a. A light automotive transport or delivery vehicle. b. A station wagon. c. A police patrol wagon. 3. A child's low, four-wheeled cart hauled by a long handle that governs the direction of the front wheels. 4. A small table or tray on wheels used for serving drinks or food: a dessert wagon. 5. Wagon The Big Dipper 6. An open railway freight car.

Types of Wagons:• • • • • • • • • • • • • • •

Buckboard Carriage Cart Conestoga wagon Go-cart Golf cart Horse-drawn vehicles Lorry (horse-drawn) Ox-wagon Stagecoach Surrey Trolley (horse-drawn) Twenty mule team Wagon-wheel effect Wheel chair

Palletisation

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The Fred Olsen line's distribution system. The pallet is taken as a through module from factory to customer.
?

Meaning:-

Palletisation refers to the packing of goods onto small wooden platforms, or pallets, for ease of handling in shipment. ? Methodology:-

The palletisation methods adopted as complementary to containers use the basic pallet as the module to move through the system. The product is loaded at the factory on either the firm's own pallet or one from the shipping line. These are then loaded onto vehicles by means of lift trucks. They are then transported to the docks in the usual manner. At the quayside they are loaded onto specially designed ships. This is achieved through side ports with lift trucks operating within the vessel. Thus the entire operation from factory to storage on board is based on one module. The same applies at the point of destination. Considering the diagram it will be noted that the major differences between palletisation and the use of containers are, firstly, that the basic module is smaller, requires no great investment on the part of the operator or customer and once assembled the pallet gives a more reasonable through module for the smaller manufacturer, 2.5 tons compared to the container. Secondly, the basic equipment required by the customer for handling is most likely already in operation within his factory for other reasons and in any case is not too expensive. Thirdly, the operator does not require extensive dockside facilities such as are needed for containers. The most important advantage from the customer's point of view is that he can get a fast door to door service with a module likely to be commonly used by his customers.
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The main disadvantages are that, firstly, there is a wide range of goods not suitable to paIletisation because of the difficulty which may be experienced in protecting the product from the elements. Nor can there be easy humidity / temperature control, except in cases where the entire hold is brought into action, which may not be convenient. There is little doubt that for certain products pre-palletisation is the best form of movement. This is especially the case (to state the obvious) where fully developed container services are not available. There is hardly a port in the world where lift trucks are not in service. The smaller operator not willing to get involved in containerization will most Likely find palletisatiori very attractive. But yet, there is obviously a great deal to be done by Palletisation.

Unitisation:-

?

Meaning:

Grouping together of items for transport into transport units (e.g. in containers or on pallets),in the above picture it can be noticed that pallets that are appropriately dimensioned for transportation by truck n grouping of them one above the another is called unitization.

Containerization:Containers were introduced in US during 1955 and in India during 1960 Features of a container:

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1. Robust but still light to ensure several handlings during unbroken transport of goods by several modes 2. Equipped with fittings to facilitate safe and easy handling 3. Easily be stuffed or unstuffed in a short time 4. Water tight and air tight outer shell 5. Internal lining that doesn’t buckle under temperature and can be easily cleaned 6. Watertight flooring, air tight door seals and locks 7. Insulation to protect refrigerated cargo. Interior washable to required hygienic standard 8. Construction to allow circulation of air around cargo. Potential areas for containerization are food stuff Universal advantages of container as a packaging unit 1. Reduction in loss, pilferage and damage of goods 2. Reduction in paper work 3. Expedites door to door pick up and delivery 4. Eliminates multiple handling of contents as this is shipped as a single unit 5. Consolidation of movement of small lots 6. Standardization of handling methods and equipment 7. Reduction in packaging cost as container itself acts like a package 8. Optimizes the services of various modes. Container can easily be transshipped. Benefits of owning containers by product owners 1. Ensures supply of containers 2. Product specific internal fittings can be provided 3. Reduction in transportation costs if the traffic is two way 4. Control of internal cleanliness as per product need 5. It can be used for delivery after arrival 6. Good storage system Major benefits of containerization to business 1. Integration of various modes of transport 2. Reduction in handling time and thereby turn around time of vehicles 3. Standardized size of containers reduces reduce capital as well as operational costs 4. Reduction in packaging cost as container itself is a robust packaging 5. Need for enclosed warehouses redundant 6. Regularity and reliability of transport service Infrastructure of containerization
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1. Deep water ports 2. Mechanized handling equipment

Roll On/Roll Off [RORO]:High cost of lifting a container from the truck and loading on to a ship made logisticians look for a new idea. Concept of RORO is driving the truck loaded with the container directly on to the deck of a ship and driving off the deck on reaching the destination. Truck loaded with container uses the ship as a mobile bridge! You may have seen passenger buses rolling on to ferries and rolling off after crossing the river.

LASH [Lighters aboard a Ship]:All ports are not accessible to deep water vessels. The deep water ships stand a long way off on sea. Cargo from shallow ports is loaded on the barges, the barges are towed to the ship. The huge crane of the ship lifts the entire barge and places it on the deck. After reaching the destination barge is placed on shallow waters to reach the port. Inland container depots

Inland Container Depots [I C Ds] :ICDs are dry ports. Dry ports at a distance far away from the shoreline handle all the import export formalities. ICDs act like deep-water ports installed inland or interior where the natural benefit of shoreline is non-existing. This a large warehouse where containerized cargo is accepted for export. The exporter books his cargo at an ICD and completes all export formalities. Thereon ICD moves the containers by movement consolidation to natural port. Cargo crosses the dock and goes into the waiting ship. Connect major ports [able to handle container ships] to hinterland. Hinterland is deprived of natural deep water ports because of geography. This hinders exports. Congestion gets created at natural deep water ports when export cargo arrives from hinterland. Deep water ports being limited in number suffer congestion as deep water ships carrying export cargo dock only at deep water ports.
?

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Facilitate customs clearance, export import formalities. ICDs ensure that businessperson does not have to go to the deep water ports with his cargo for clearing import/export formalities.
?

? ICD to be located after ascertaining export import potential and good road network. One of the objectives of creating ICDs is to facilitate harnessing export potential of hinterland. Hence this location analysis is essential. ? Serve as consolidation facility and should have handling equipment. Facility to group small consignments and create container loads needs handling equipment.

Container Corporation of India Limited
The Company:--------------------------------------------------34---------------------Logistics Management----------

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CONCOR was profitably satisfy needs for higheffective logistics

set up in 1988, to Indian customer's Quality, costservices.

Mission of the Company:CONCOR's mission is to provide efficient and reliable multi-modal logistics support for the country's exim and domestic trade and commerce. To ensure enhanced customer satisfaction, growing shareholder value, high growth and consolidation of status as market leader.

Core Business in Transportation:-

CONCOR's core business is characterised by distinct activities in which one of the activities carrier transportation.

Carrier:As the sole-provider of containerized rail transport in India, CONCOR benefits from a close relationship with the Indian Railways. Several of its terminals are situated on leased Railway-land. Many of its key operating personnel are on secondment from Indian Railways or have previously been employed by the Indian Railways. Wagons and operational support from Indian Railways have always been available to the
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company. As rail is price-competitive over long distances, the price advantage can be passed on to clients, thus allowing for flexible and competitive pricing. The rail link also plays a major role in decongesting our ports and the road corridors that lead to these ports.

Facilities and Services:A network of more than 40 terminals, offering scheduled and on demand rapid rail and road services between the hinderland and ports, and between major metros.

Hence from the above example it can be understood that container corporation of India limited place a vital role in the logistics systems of an India.

Indian Transportation Sector
India’s transport sector is large and diverse; it caters to the needs of 1.1 billion people. In 1997, the sector contributed 4.4 percent to the nation’s GDP, with road transportation contributing the lion’s share.
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Good physical connectivity in the urban and rural areas is essential for economic growth. Since the early 1990s, India's growing economy has witnessed a rise in demand for transport infrastructure and services by around 10 percent a year. However, the sector has not been able to keep pace with rising demand and is proving to be a drag on the economy. Major improvements in the sector are therefore required to support the country's continued economic growth and to reduce poverty.

Railways:Indian Railways is the largest railway in Asia and the fourth most heavily used system in the world. It carries some 14 million passengers a day and is one of the world’s largest employers. Till recently, the railways played a leading role in carrying passengers and cargo across India’s vast territory. However, with tariff policies that overcharge freight to subsidize passenger travel, the movement of freight is increasingly shifting from railways to roads.

Roads:Roads are the dominant mode of transportation in India today. They carry almost 90 percent of the country’s passenger traffic and 65 percent of its freight. The density of India’s highway network -- at 0.66 km of highway per square kilometer of land -- is similar to that of the United States (0.65). It is also much greater than that of China (0.16) or Brazil (0.20). However, most highways in India are narrow and congested and have poor surface quality.

Ports:India has 12 major and 140 minor ports along its vast coastline. These ports serve the country’s growing foreign trade in petroleum products, iron ore, and coal, as well as the increasing movement of containers. Inland water transportation remains largely undeveloped despite India's 14,000 kilometers of navigable rivers and canals.
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Aviation:India has 60 airports, including 11 international airports. The dramatic increase in air traffic for both passengers and cargo in recent years has placed a heavy strain on the country's four major airports. Transport infrastructure in India is better developed in the southern and southwestern parts of the country.

Challenges:The major challenges facing the sector are: India’s roads are congested and of poor quality. Lane capacity is low - most national highways are two lanes or less. A quarter of all India's highways are congested, reducing truck and bus speeds to 30-40 kmph. Most roads are of poor quality. Road maintenance remains significantly under-funded - only around one-third of maintenance needs are met. This leads to the deterioration of roads and high transport costs for users.
? ?

R

ural areas have poor access. Roads are significant for the development of the rural areas - home to almost 70 percent of India's population. Although the rural road network is extensive, some 40 percent of India’s villages do not have access to all-weather roads and remain cut off during the monsoon season. The problem is more acute in India's northern and northeastern states which are poorly linked to the country’s major economic centers. The railways are facing severe capacity constraints. All the country’s high-density rail corridors face severe capacity constraints. Also, freight transportation costs by rail are much higher than in most countries as freight tariffs in India have been kept high to subsidize passenger traffic.
?

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Urban centres are severely congested. In Mumbai and other metropolitan centers, roads are often severly congested during the rush hours. The dramatic growth in vehicle ownership – at some 15 percent a year during the past decade - has reduced rush hour speeds to 5-10 km an hour in the central areas of major cities. Ports are congested and inefficient. Port traffic has more than doubled during the 1990s, touching 385 million tons in 2001-02. This is expected to grow further to about 900 million tons by 2011-12. India's ports need to significantly ramp up their capacity and efficiency to meet this surging demand.
?

Airport infrastructure is strained. Air traffic has been growing at over 15 percent a year leading to severe strain on infrastructure at major airports, especially in the Delhi and Mumbai airports which account for around 50 percent of nation’s air traffic.
?

Key Government Strategies:According to India’s Tenth Five Year Plan, the Government aims to modernize, expand, and integrate the country's transport services. It also seeks to mobilize resources for this purpose and to gradually shift the role of government from that of a producer to an enabler. In recent years, the Government has made substantial efforts to tackle the sector’s shortcomings and to reform its transport institutions. These include:
?

Increasing public funding

for transportation in its Five Year Plans. Improving the major road corridors by launching the National Highway Development Program between Delhi, Mumbai, Chennai and Kolkata, popularly called the Golden Quadrilateral.
?

Financing the development and maintenance of roads by creating a Central Road Fund (CRF) through an earmarked tax on diesel and petrol.
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Operationalising the National Highway Authority to act as an infrastructure procurer and not just provider.
?

Amending the National Highway Act to expedite land acquisition, permit private financing and allow tolling.
?

Improving rural access by launching the Pradhan Mantri Gram Sadak Yojana (Prime Minister’s Rural Roads Program).
?

Reducing the congestion on rail corridors along the Golden Quadrilateral and improving port connectivity by launching the National Rail Vikas Yojana (National Railway Development Program).
?

Upgrading infrastructure and connectivity in the country's twelve major ports by initiating the National Maritime Development Program.
?

Regulating tariffs in the port sector by establishing a Tariff Authority for Major Ports (TAMP).
?

Initiating the process of privatization and expansion of the Mumbai and New Delhi Airports.
?

World Bank Support:The World Bank has been a major investor in the transport sector in India. Till 2005, it has provided 16 loans for improving the national and state highways and rural roads, as well as urban transportation in Mumbai. It has also provided 18 loans for the railways. At present, World Bank’s total loan commitments for the transport sector in India are US$4.8 billion. The main activities include:
?

N

ational Highway Development Project: The
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World Bank is financing highway construction on the Agra-Dhanbad and Lucknow-Muzaffarpur corridors. It is also involved in other sector activities such as improving road transport efficiency, upgrading road safety, including private sector participation, and improving asset management. Rural Roads Program: The program provides for the provision of all weather roads to villages in four states – Uttar Pradesh, Jharkhand, Rajasthan and Himachal Pradesh.
?

State Roads Projects: State Highways are being upgraded in the states of Gujarat, Karnataka, Kerala, Mizoram, Uttar Pradesh, and Tamil Nadu.
?

Mumbai Urban Transport Project: The project aims to improve transportation in the Mumbai Metropolitan Region by fostering the development of an efficient and sustainable urban transport system - suburban rail, bus and link roads - and building effective institutions.
?

While the Bank will continue to support the upgrading and development of roads and highways in the country, it plans to scale up its involvement in urban transportation, railways and ports. INDIA: Transport Sector Key Statistics Units As of 2004 Length of Roads Km. 3,315,231 Main Roads Km. 665,231 Paved Roads % 50 Access to All-Season- % 60 Roads Road Density km/1,000 768 sq. km. Rail Track Length Km. 63,122 No. of Ports 152 Turnaround time Days 3 Airports 60 International 11
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Conclusion
Finally after looking every aspect of transportation it can be understood that transportation is critical to logistics and supply chain effectiveness. It impacts throughout the key issue of logistics effectiveness and the global supply chain. To meet the dynamic requirements in the logistics systems anyone must have dynamic strategies. As in simple words logistics means moment of good at right time & at right place, transportation is a key factor in these system which links supplier to the manufacturer and manufacturer to the customers.

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