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Modes of Transportation in

Supply Chain

Trey Lynn

Brigham Young University

BusM 361

Professor S. Tom Foster

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Agenda

Transportation defined

Brainstorming Modes of transportation

Strengths and weaknesses of each mode

Pricing

UPS example Exercise

Summary

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Transportation

means of conveyance or travel (of goods

and services) from one place to another

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Brainstorming

What types of products require

transportation in your organization?

How far are these products required to

travel?

How important is the speed of delivery forthese products?

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Modes of Transportation

Motor

Air

Rail

Water

Pipeline

Intermodal

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Motor (Trucking)

1970s economic deregulation of

interstate traffic

Lower costs

Accessibility

Small, frequent shipments

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Trucking

Disadvantages

Speed

Capacity

Range

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Air

Disadvantages

Price

Non-direct points

Add-on charges

Necessary?

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Rail

Lowest overall cost

per unit weight

Consistent time

schedule

Recommended with

most commodity types

Weather

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Rail

Disadvantages

Inflexibility

Potential damage of goods

Ineffective with small shipments

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Water (Ships)

Large volumes

Long distances

Slower than air travel

Limited access

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Pipeline

Transport of homogeneous

materials Lower transportation costs than

other modes

Higher initial costs

Unable to transport a variety of

materials

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Intermodal

Use of various transportation

modes

Containers

More popular due to

globalization

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Pricing

Handling characteristics

Distance freight is moved

Weight of freight

Costs inversely related to speed of service

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United Parcel Service

Small package shipper

Business built around transportation

Effective intermodal transportation

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UPS - Methods

Trucks

Small, frequent shipments

Deliver directly to homes and businesses

Air

Time sensitive shipments

Small packages (long distances)

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UPS - Methods

Rail

Transcontinental distances

Used primarily in intermodal transport

Sea

Door to door ocean shipping

Weekly departures between major ports

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UPS

Provides expertise as a resource to

businesses

http://www.ups-scs.com/transportation/

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Exercise

Take ideas from brainstorming and decide

which modes of transportation would bebest for your company.

List circumstances which would require

using alternate modes of transportation andconsequences your company would

encounter.

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Summary

Each mode of transportation has its own

strengths and weaknesses The effectiveness of each mode depends on

several factors including distance, price, andtimeliness

Services exist to help choose the best modesof transportation

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Bibliography

Cavinato, Joseph L, Ralph G Kauffman. The Purchasing

Handbook. The McGraw-Hill Companies, 2002, NewYork, NY.

Copacino, William C. and James F. Robeson. The LogisticsHandbook. The Free Press, 1994, New York, NY.

Taylor, David. Global Cases in Logistics and Supply Chain

Management. International Thomson Business Press,1997, London, UK.

http://www.ups-scs.com/transportation/