Logistics, Inter modal and transport Costs

A Research Project Presented to MR.WOODROW ROY C. TUMULAK ED.D. (CAR) Faculty University of Cebu Lapu Lapu and Mandaue Cebu

In Partial Fulfillment of the Requirements for the course English 2M (Writing in the Discipline)

Submitted by: Gilbert Allaa Jan Michael Caete Ray Martin Dimpas

Second Semester, 2012-13

APPROVAL SHEET

This Research Project entitled Logistics, Intermodal and Transport Costs is prepared and submitted by Group___in partial fulfillment of the requirements in English 2M (Writing in the Discipline) has been examined, accepted and approved.

MR.WOODROW ROY C. TUMULAK ED.D. (CAR) Instructor

Date: 21 March 2012

ACKNOWLEDGEMENT

Foremost, we would like to express my sincere gratitude to my Instructor Mr.Woodrow Roy C. Tumulak for the continuous support of our research study, for his patience, motivation, enthusiasm, and immense knowledge. His guidance helped me in all the time of research and writing of this thesis. I could not have imagined having a better advisor and mentor for my research study.

To the light, our god, who guided us through the way, And Mr.Woodrow Roy C. Tumulak, for his great efforts of supervising and leading us, to accomplish this fine work.To our friends and families, they were a great source of support and encouragement, we thank them all and wish them all the best in their lives.To our mothers and fathers, for their warm, kind encourage, and love.To every person gave us something to light our pathway, we thank them for believing in us.Keep your dreams alive. Understand to achieve anything requires faith and belief in yourself, vision, hard work, determination, and dedication. Remember all things are possible for those who believe.

And to my group mates who helped to finish this work as possible as they can.

DEDICATION
This Research Paper is lovingly dedicated to our respective parents who have been our constant source of inspiration. They have given us the discipline to tackle any task with enthusiasm and determination. Without their love and support this project would not have been made possible.

TABLE OF CONTENTS
CHAPTER I INTRODUCTION A. RATIONALE OF THE STUDY B. SIGNIFICANCE OF THE STUDY PAGES 1-3 4

CHAPTER II CONTENT OF THE STUDY A. FACTS & FIGURE B. ILLUSTRATIONS 5-10 11

CHAPTER III SUMMARY,RECOMMENDATION & CONCLUSION A. SUMMARY B. RECOMMENDATION C. CONCLUSION 12 13 14-15

CHAPTER IV BIBLIOGRAPHY

16

CHAPTER V CURRICULUM VITAE

17-19

CHAPTER I THE PROBLEM AND ITS SCOPE Logistics, Inter modal and transport Costs Introdution A.Rationale of the study Fierce competition in todays market has forced business enterprises to invest in and focus on supply chains. The growth in telecommunication and transportation technologies has led to further growth of the supply chain. The supply chain, also known as the logistics network, consists of suppliers, manufacturing centers, warehouses, distribution centers and retail outlets, as well as raw materials, work-in-process inventory and finished products that flow between the facilities. The location of factories, warehouses and supply points in general, to serve customers distributed over a network of cities is often influenced by transports costs.If transport cost are uniform and linear with respect to distance, the total transport cost is proportional to the sum of the distances from the supply points to the cities served, each weighted by the volume of shipments. Intermodal transport reflects the combination of at least two modes of transport in a single transport chain, without a change of container for the goods, with most of the route traveled by rail, inland waterways or ocean-going vessel, and with the shortest possible initial and final journeys by road. Operational Research has focused mostly on transport problems of uni-modal transport modes. We argue that intermodal freight transportation research is emerging as a new transportation research application field, that it still is in a pre-paradigmatic phase, and that it needs a different type of model

than those applicated to uni-modal transport. In this paper a review is given of the operational research models that are currently used in this emerging field and the modeling problems, which need to be addressed. people looking to ship goods (or move people) are likely to realize that it doesn't always make sense to stick to just one mode of transportation. For example, cargo may be offloaded from a ship onto a truck, which transfers it to a railyard, from which it will be moved across the country by train. Intermodal transportation may be more efficient and cheaper; in some cases, however, it does have pronounced disadvantages in terms of speed and reliability.They are too slow to operate at peak efficiency, intermodal transportation must also reduce the amount of time spent waiting in depots for a new carrier to arrive or for cargo to be unloaded. The lack of reliability, Because of its reliance on more than one mode of transit, intermodal transportation is also subject to lower overall reliability; as the chain of different modes grows, the possibility of any link in the chain breaking down also increases. This is particularly problematic when one of the modes of transport is rail; railroads are more susceptible to delays introduced by bad weather or equipment failure. For this reason, as well as concerns over speed, shippers that require reliable, high-speed transportation are less likely to consider intermodal systems. The other reason is the damage, Whenever cargo has to be shuffled around, shippers risk the possibility of damage as the freight is transferred from one method of transportation to another. Fortunately, this danger can be mitigated, but doing so

generally involves overpacking by adding more bracing and protective material than would normally be deemed sufficient. This added weight and expense partially counteracts the advantages intermodal transportation has in terms of energy efficiency and cost.The High infrastructure Costs of Intermodal freight transportation also suffers from comparatively high infrastructure costs. Containerization has lowered the cost and difficulty of transporting goods by standardizing their form; shippers can easily move the same container from a ship to a train to a truck. Handling these containers, however, requires that shippers have the heavy-duty cranes and equipment necessary to manipulate large containers; this infrastructure may not exist in all places, particularly in developing countries. The reasons why we conduct this study is to know the advantages and disadvantages of logistics and how to make a strategies for the safe and fatest delivery of the cargo to the consumer.and the reason of how to improve the delay of the products and the reasons that products are being delayed due to the calamities.

B.Significance Of The Study This study is significance because logistics and intermodal services play important roles in transportation. Logistics refers to a company's program for efficiently delivering goods to the customer. Intermodal pertains to the use of more than one type of transportation to ship the goods. It takes specialized skills, education and experience to work in the various logistics and intermodal transportation careers. Logistics is the one important function in business today. No marketing, manufacturing or project execution can succeed without logistics support. For companies, 10 per cent to 35 per cent of gross sales are logistics cost, depending on business, geography and weight/value ratio. Logistics is comparatively a new term, but not the operation. Logistics has existed since the beginning of civilisation. Raw material and finished products had always to be moved, though on a small scale. Things began changing with the advance in transportation. Population began moving from rural to urban areas and to business centres. No longer did people live near production centres, nor did production take place near residence centres. The geographical distance between the production point and consumption point increased. And logistics gained importance. Another factor has come into play recently. Since the early 1990's, the business scene has changed. The globalization, the free market and the competition has required that the customer gets the right material, at the right time, at the right point and in the right condition at the lowest cost.

CHAPTER II CONTENT OF THE STUDY A. FACT AND FIGURES

Intermodal transport Intermodal transport is a particular type of multimodal transport, wherein the goods are moved in one and the same loading unit, for example: containers. Intermodal transport uses more than one mode of transport, however, since the loading unit remains the same, the goods being transported, are themselves not handled each time there is a change of mode.Development of intermodal transport specifically requires growth of loading units which are usable across multiple modes. Containers are the most commonly known examples. Lately, more innovative methods are being used.Roll-on/Roll-off: This mode combines different means of transportation (sea and road), and is used most often with new automobiles, which are shipped by sea and them simply driven off the vessel to the importers warehouse. Heavy and over-dimensional cargo is also suitable for Ro-Ro transport.Lighter Aboard Ship: LASH transport is the combination of deep sea and inland waterway transportation. Barges operating on inland waterways can be loaded onto a LASH and carried across sea to the destination port. Subsequently, the unloaded barge can carry cargo further to the hinterland.It must be noted that LASH vessels are expensive. Furthermore, it is necessary to check on the availability of the special handling facilities necessary in the ports of origin and destination.Piggyback / Trailer train: This is a system of unitised multimodal land transportation, a combination of transport by road and rail. It combines the speed and reliability of rail on long hauls with the door-to-door flexibility of road transport for collection and delivery. The goods are packed in trailers and hauled by tractors to the railway station. At the station, the trailers are moved onto railway flat cars and the transport tractors, which stay behind, are then disconnected. At destination, tractors again haul the trailers to the warehouses of the consignee.The system has undergone

refinements and sophistication by the introduction of the so-called "trailer train" which uses the same trailer as a vehicle on the road and a rail vehicle on the rail. In other words, the trailer moves on its wheels as a truck on the road but the wheels can be retracted by an air suspension system and connected to a rail bogie for movement by rail. At the end of the rail journey, the conversion back to being road vehicle is effected for delivery of the goods to the customers. Sea train: This is another innovation in the multimodal transport system involving the use of rail and ocean transport. It is similar to the Ro-Ro system except that in the place of the Ro-Ro vehicle a rail car is used so that geographically separated rail systems can be connected by the use of an ocean carrier. Typically these vessels are long and thin and consist of one main deck running the length of the ship. They are quicker at loading trains than general cargo vessels since the trains carriages do not need to be detached from one another.

The Principal Issues For developing an efficient intermodal/multimodal transport system, the need of the hour is to look into the three principal issues infrastructure development, regulatory / policy reforms and investment in technology.

1.Infrastructure development: Intermodal/Multimodal transport builds on the operational efficiencies of the transport system. Without adequate infrastructure, the incremental benefits of intermodal transport will be negligible.Necessary infrastructure development to provide for compatibility between modes, less friction costs, low dwell times, less pilferage and increase in containerization is basic to growth of intermodal transport.

2.Regulatory reforms: Intermodal/Multimodal transport operations need to be appropriately regulated with an objective of controlled development of the sector, driving growth while mitigating possible risks. Generally, controls may be placed on licensing, pricing, contracting and service standards. For the growth of international intermodal transport, necessary changes may be required in the customs procedures and export-import procedures among others. For domestic transport, changes in Cabotage laws, octroi levies, privatization of railways and such moves.

3. Investment in technology: An Intermodal/Multimodal operator enters into a single contract with the shipper, but multiple contracts with transporters, customs agents, ports / airports, railways, warehouse operators and other related entities. The voluminous documentation requirements and need to coordinate with a number of parties creates a need for appropriate information technology support. Additionally, the transport and warehousing technology must itself be up-to-date to facilitate accurate tracking of shipments and reduce logistics cost and time.

Service Highlights Door-to-door, door-to-ramp, ramp-to-door, and ramp-to-ramp services. Exclusive access to APLs growing pool of Ocean53 containers and related equipment for domestic shipments. Long-term contracts with all U.S. Class 1 railroads. Established relationships with experienced and reliable drayage partners. Seamless rail integration at APLs global ocean gateways in Los Angeles, Oakland and Seattle. Leader in the U.S./Mexico cross-border intermodal transportation market. Broad pool of container types and sizes, including 20, 40, 45, 48 and 53. Large, growing investment in domestic 53-foot containers and related Equipment. Domestic and cross-border transportation management solutions. Consolidated invoicing. Standard and Expedited truckload services. Refrigerated/temperature controlled options. Dedicated asset solutions.

Customer-Focused Service Experienced customer service teams provide local expertise and business Relationships. Door-to-door management of shipments throughout the NAFTA region. Close coordination with all parties involved including shipper, consignee, forwarder, customs broker, railroad and motor carrier. Regular analysis of the intermodal market and your transportation needs to ensure the most competitive services and pricing available. Box Car management, including consolidation, tracking, cross-dock and Delivery. Benefits to Your Business Reduced carbon footprint when moving via intermodal stack versus longhaul truck service. Seamless integration of your global transportation and logistics programs. Route optimization ensures the most time and cost-effective solution moving from point A to B. Advanced technology provides end-to-end product visibility from origin to Destination. Outsourced convenience with single source accountability. Proven excellence from an established leader in logistics services . Cost advantages over traditional truck transportation.

TABLE 1 SUMMARY OF TRUCK WAITING COST

Hourly Rate

Opportunity cost of hourly

Hourly truck rate Waiting time (min) Number of lanes Holding pen size (trucks) One truck waiting cost (72 min) 40 trucks waiting cost/hour Weekly cost of the 72 min waiting time Annual waiting cost of friday Annual cost of 72 mins of waiting Annual cost of 8 hour of waiting

26.55 72 3 40 31.86 1,274 6,372 66,269 331,344 2,548,000

50.00 72 3 40 60 2,400 12,000 124,800 624,000 4,800,00

B. ILLUSTRATIONS

CHAPTER III SUMMARY, RECOMMENDATION & CONCLUSION A.SUMMARY In order to meet the market demand for new, commercial transport and logistics solutions, which at the same time can meet the increasing political demands to the transport and the logistics sector, e.g. concerning environment and utilization of capacity it is important to focus more on the concept of transport and logistics centres. There should therefore be more focus on Logistics Centres facilities to support supply chain development and efficiency. The performance of supply chains / transport corridors can be improved through co-operation and communication between Logistics Centres. The more open structure the Logistics Centre has, the better opportunity there is of increasing the use of Transport and Logistics Centres in the supply chains, because more companies have the opportunities of utilising the facilities of the different Logistics Centres. Intermodal transport reflects the combination of at least two modes of transport in a single transport chain, without a change of container for the goods, with most of the route traveled by rail, inland waterways or ocean-going vessel, and with the shortest possible initial and final journeys by road. Operational Research has focused mostly on transport problems of uni-modal transport modes. We argue that intermodal freight transportation research is emerging as a new transportation research application field, that it still is in a pre-paradigmatic phase, and that it needs a different type of model than those applicated to uni-modal transport. In this paper a review is given of the operational research models that are currently used in this emerging field and the modeling problems, which need to be addressed.

B. RECOMMENDATION

The companies will try a effective intermodal transport so that there goods will never delayed. And the shipping company will be resposible for the safety of the cargoes.

C. CONCLUSION The exploratory results suggest that in the specific case under investigation initial investment in a full-service intermodal transportation and logistics facility would not be well received and would be difficult to justify from a short-term financial and economic return standpoint. Rather, an approach focused on initial provision of specific transportation services seems to make more sense. Provision of intermodal services that link motor carriage, rail, and air transportation would present a focused marketing strategy centering on services that could more readily be sold to a broader market. Additionally, freight terminal facilities that provide opportunities for consolidating inbound and outbound freight and interlining with local cartage and drayage and short-line rail service also seem to fit the profile of a measured approach to service roll-out. Warehousing and information services that facilitate international shipping may also find a profitable market niche.

Public and private investors and service providers pursuing regional market entry should identify the firms that comprise the "favorable" segment. Based upon the interviews conducted for this study, one or more high image finns in the target area that would be receptive to using a handful of focused services available at a regional facility may provide the volume for economies of scale in the early going. As the facility proves its value to well-known customers, it might then be feasible to expand capabilities to include more of the integrated service offerings. Growth could come from expanding revenues from existing customers as well as by

attracting new customers encouraged by the successes of established relationships. The respondents indicated, however, that optimism must be accompanied by a pragmatic realization that changes in shipping and supply chain patterns are slow in coming. Success ultimately depends upon service providers' ability to implement quality service offerings that provide real value: improving customer service levels at competitive cost.

CHAPTER IV BIBLIOGRAPHY WEBSITES: http://en.wikipedia.org/wiki/Logistic_function http://www.englandlogistics.com/intermodal-transportation http://www.apllogistics.com/wps/portal/apll?WCM_GLOBAL_CONTEXT=/APLL_ContentLib/APL L/APLL_SA_Home/SA-SupplyChainServices/SA-GlobalFreightManagement/APLL-SALandTransportServices/APLL_SA_IntermodalTransportation http://www.trglogistics.com/ http://www.bnsf.com/intermodal/intermodal-for-logistics-providers.html http://www.oceancareers.com/2.0/view_program.php?program_id=48 http://www.sciencedirect.com/science/article/pii/S1366554503000723 http://www.ehow.com/info_8018455_logistics-intermodal-transportation-careers.html http://www.roarlogistics.com/ http://www.globaltrade.net/f/market-research/text/Mexico/Transportation-and-StorageLogistics-and-Intermodal-Transportation-Sectors-in-Mexico.html

CURRICULUM VITAE

Ray Martin Dimpas Address: Consolacion, Cebu Contact #: 09234115187

PERSONAL BACKGROUND Age: Sex: Birth Date: Birth Place: Religion: Height: Weight: EDUCATION BACKGROUND TERTIARY School Name: Course: Year: SECONDARY School Name: Year: PRIMARY School Name: Year:

CURRICULUM VITAE

Gilbert Allaa Address: Consolacion, Cebu Contact #: 09234115187

PERSONAL BACKGROUND Age: Sex: Birth Date: Birth Place: Religion: Height: Weight: EDUCATION BACKGROUND TERTIARY School Name: Course: Year: SECONDARY School Name: Year: PRIMARY School Name: Year:

CURRICULUM VITAE

Jan Michael Caete Address: Lilo-an, Cebu Contact #: 09232324790

PERSONAL BACKGROUND Age: 18 Sex: male Birth Date: March 26, 1994 Birth Place: cebu Religion: Roman Catholic Height: 54 Weight: 56 Lbs EDUCATION BACKGROUND TERTIARY School Name: UCLM Course: BSMT Year: 2012-2013 SECONDARY School Name: La Consolacion College Year: 2011-2012 PRIMARY School Name: Our Lady Of Carmel Children Learning Center Year: 2007-2008