UNIT 5

Transportation Management
 Overview
• Transport Functionality
• Participants in transportation decision
• Economic factors
• Cost Structures
• Pricing Strategies
• Rating
• Transport Documentation
• Department Responsibility
• Transport Modals
• Transportation Format
 Functionality
• Product Movement
– Product in the form of materials, components, assemblies,
work in process or finished goods, transportation is
necessary to move it to the next stage of the
manufacturing process or physically closer to the ultimate
customer.
• Product Storage
– When warehouse space is limited,utilising transportation
vehicle may be a viable option.
• Method 1: Involves loading product on the vehicle and then having
it take a circuitous or indirect route to its destination.

• Method 2: To achieve temporary product storage is diversion.This

occurs when an original shipment destination is changed while the
delivery is in transit.
Participants in Transportation Decision

Public

Government

Shipper Carrier Consignee

(Receiver)

Goods flow
Information
Flow
 Economic Factors
• Distance
• Volume
• Density
• Stowability
– Factors refers to product dimensions and how they
affect vehicle space utilization.
• Handling
• Liability
• Market factors.
 Cost structures
• Variable Cost
• Fixed Cost
• Joint Cost
• Common cost
• Factors Influencing Transport decision
• Transportation cost
• Inventory Cost
• Facility Cost
• Processing Cost
 Pricing strategies
• Cost of service
• Value of service
• Combination strategy
• Net rate pricing
 Rating
• The price paid to move the unit weight of a
product between location is termed as rate.
• Class Rates
– All products legally transported in interstate
commerce can be shipped via class rates.
• Commodity rate
• Exception Rate
• Special Rate and Services.
 Special Rate and Services.

• COD
• Inside Delivery
• Marking or Tagging
• Notify before delivery
• Reconsignment of delivery
• Redelivery
• Residential delivery
• Sorting and segregation
• Storage
 Documentation
• Bill of Lading
• Frieght Bill
• Shipping Manifest
 Department Responsibility
• Auditing and Claim administration
• Equipment Scheduling
• Rate negotiation
• Research
• Tracking and expediting
 Mode of Transportation.
• Airlines
• Road Transport
– Regular Freight
– Package carrier
• Railways
• Water
– Domestic
• Coastal
• Inland
– Overseas
• Pipeline
• Ropeways
• Multimodal/Intermodal
 Transportation Format
• Vehicle registration plates of India.pdf
• LOG-2-3-PROCUREMENT-SAMPLE-Transport
Contract-WV.pdf
• dtr_part_ii_app_v_1.pdf
• transportation-logistics.pdf
 Questions
• What are the functionality of transportation?
• Different types documents involved in transportation.
• What are the responsibilities of a traffic department?
• What is meant by tracking and expediting?
• What are the economic factors influence transport decision?
• Who are the participants in the transportation process?
• Explain in detail about the different modes of transport?
• Explain about the transportation format in India?
• Write short notes on:
– Joint Cost
– Facility Cost
– Common Cost
– Class rate
– Commodity rate
– Exception rate
– Special rates and services