13-Feb-22

CHAPTER 5: TRANSPORTATION MANAGEMENT

Lecturer: M.A. Nguyen Le Dong Xuan
Faculty of Economics, HCMC University of Economics and Finance

Content
TRANSPORTATION MODES

INTERMODAL TRANSPORTATION

THIRD PARTIES FOR TRANSPORTATION

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LEARNING OUTCOMES

• To compare and contrast transportation infrastructure in several

countries
• To identify modes of transportation and learn about their respective
characteristics
• To discuss intermodal transportation
• To describe several types of transportation specialists
• To explain how different types of regulation impact transportation
• To identify the legal classification of transportation carriers

TRANSPORTATION MODES

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TRANSPORTATION DEFINITION

• Transportation: is responsible for the physical

movement of materials between points in the supply
chain.

The heart of
Transportation
logistics

TRANSPORTATION & LOGISTICS

Facilities location
Transportation influences
logistics activities

Inventory

Packaging

Materials Handling

Customer service

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5 MODES OF TRANSPORTATION

Air Road Pipeline Rail Water

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AIR TRANSPORT
Advantages:
- The highest speed
- Short transport times in the air
- Especially suited for long distances
Disadvantages:
- High transport costs
- Small transport capacities
- Low network density due to dependence on airport locations
- Depends on weather conditions

AIR TRANSPORT

Regular service Cargo + Passenger

3 types of
operation
Cargo service Cargo only

Charter A whole aircraft is hired

operations for a particular delivery

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GOODS ARE DELIVERED BY AIR TRANSPORT

Parcel Live animals Funeral

Valued items Himalayan Crocodile Brikin -

300.000 USD (> 7 tỷ VNĐ) Ecuador rose

ROAD TRANSPORT
• Door-to-door service
• Good network-forming possibilities
• Speediness in conjunction with a relatively low transport risk
• Utilization of vehicles specific to the volume of goods
• Cost optimization and environmental-impact optimization by means of the
piggy-back system with railway
• In long-haul transport abroad, road freight transport is often used for the first
and the last transport stages
• Relatively short standstill periods and latency
• High flexibility
• Complex competitive relationships

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PIPELINEPIPELINE
TRANSPORT
TRANSPORT
Advantages
• High mass-transport capacity
• High network-forming capability
• High reliability and thus plan ability
• Environmentally friendly by avoiding emissions
Disadvantages
• Limited products’ type (products under liquid form such as oil,
fuel,…)

PIPELINE RAIL TRANSPORT

TRANSPORT
RAIL TRANSPORT
Advantages
• Highly capacity
• Suitable for almost any kind of goods
• Speediness
• Timetables and rail-track allocation greatly ensure timely delivery.
• Safe transport handling
Disadvantages
• Low network density and thus limited possibilities for door-to-door transport
• Strict adherence to timetables and allocated train lengths
• Weak competition from foreign railroad competitors due to limited marketability
• Border delays due to varying technical requirements of country-specific
railroad systems
Đoàn tàu container đầu tiên chạy thẳng Việt Nam - Bỉ:
https://www.youtube.com/watch?v=94yOrfdEq1c

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PIGGYBACK SYSTEMS (ROAD AND RAIL)

Piggyback systems: https://www.youtube.com/watch?v=bNQh5IIzbGw

PIPELINE SEA TRANSPORT

TRANSPORT
RAIL TRANSPORT
Advantages
Transport of large volumes of goods possible or usual
Especially suited for long-haul and intercontinental transport
Suited for almost any type of goods
Relatively cheap relation between transport cost and capacity
Rather high safety during transport
Disadvantages
Relatively low transport speed (high time requirement)
Highly dependent on weather conditions

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INLAND
RAILWATERWAY
PIPELINE TRANSPORT
TRANSPORT
TRANSPORT

Advantages
High mass-transport capacity
24hr service
High reliability and transport safety
Environmentally friendly
Disadvantages
Low network density
Low transport speed
Dependent on weather conditions

6 ATTRIBUTES TO EVALUATE THE ATTRACTIVENESS

OF A PARTICULAR TRANSPORTATION MODE

No. Attributes Explaination

1 Cost Price that a carrier charges to transport a shipment

2 Speed Elapsed transit time from pickup to delivery

3 Reliability Consistency of delivery

4 Capability Amount of different types of product can be transported

5 Capacity Volume that can be carried at one time

6 Flexibility Ability to deliver the product to the customer

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GROUPWORK
Discuss with your partner to identify the level for every attributes
(scale from 1 being the best performance and 5 being the worst)
No. Attributes Rail Road Water Air Pipeline

1 Cost

2 Speed

3 Flexibility

Volume/
4
Weight limits

5 Accessibility

FACTORS INFLUENCING TRANSPORTATION COSTS

Factors affecting transportation costs

Factors related to goods Factors related to market

Product density: heavy Degree of competition

goods vs light goods
Geographical distance
Stowability: excellent
stowability vs bad State regulations
stowability
Balance of two-way
Ease and difficulty of transport
handling
Seasonality of product
movements
Liability: high-value goods,
perishable goods Product are
transported:
domestically or
internationally

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INTERMODAL TRANSPORTATION

MULTIMODAL TRANSPORTATION

MULTIMODAL INTERMODAL COMBINED

TRANSPORTATION TRANSPORTATION TRANSPORTATION
• Using at least 2 • Using at least 2 different • Is intermodal transport
different modes of modes of transport • With the trips beginning
transport • Use of several means of and ending by road
• Organized by 1 carrier transport • Include the following
(Multimodal Transport • Goods remain in the techniques
Operator – MTO) same loading unit • Piggyback systems (road
• Under 1 contract • Without intermediate and rail)
• With 1 freight document handling • Roll-on Roll-off systems
• Under 1 liability (road and waterway
• 1 price

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ADVANTAGES & LIMITATIONS OF MULTIMODAL TRANSPORT

 Minimize time loss at  Require synchronization on
transhipment points equipment, infrastructure of
 Provide faster transit of goods terminal need to meet standards.
 Reduce burden of  High investment costs to build
documentation & formalities intermodal transport transfer hubs
 Save costs to connect transport modes.
 Establish only once agency to  The interdependence between
deal with modes of transport
 Reduce costs of exports  The involvement between modes
and responsibility of multimodal
transport operators.
 Empty container shipping costs
increase if imbalance trade.

THIRD PARTIES FOR TRANSPORTATION

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THIRD PARTIES FOR TRANSPORTATION

• Are intermediaries that provide linkages between shippers and carriers.
• Do not own transportation equipment
• They partner with a number of carriers
• Third parties include:
• Transportation brokers
• Freight forwarders
• Shippers’ associations
• Shippers’ agents
• Third party logistics service providers

CHAPTER SUMMARY
• Transportation, the actual, physical movement of goods and people
between two points, is pivotal to the success of any logistics or
supply chain operation.
• Five modes of transportation are evaluated in terms of each mode’s
capability, capacity, cost, flexibility, reliability, and speed.
• This mode-by-mode discussion was followed by a look at
intermodal transportation, with a particular focus on
containerization.
• The roles that can be played by transportation specialists such as
freight forwarders, brokers, shipper’s association, shippers’ agents,
3PL Logistics providers.

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