Importance of Transportation

Importance of transportation: historical, social, political, economic, environmental. Core component of transport transaction = prices: be negotiated or price setting. Competitiveness of Transportation = investments. Private Sector seeks transport investments that promise economic returns and public is social and strategic reasons. Core attribute of transportation is distance. Euclidean: basic representation of a straight line between 2 locations. Transport: more complex rep. that accounts for existing structure of transport network. Logistical: encompasses all tasks required to move items. Order (degree) of a Node: (Reachability)  The number of its attached links and is a simple, but effective measure of nodal importance. The higher its value, the more a node is important in a graph as many links converge to it. 3 Types of Physical Spaces: clearly defined, vaguely defined, without definition. Network Structure: centralized, decentralized, distributed. 2 Major Types of Networks: point-to-point and hub-and-spoke. Landbridges: full, mini, micro, reverse. Flows: geographical, physical, transactional, distribution. Spatial organization of transportation: differentiation and interaction. One Hour Commuting Model: Walking is slowest way of navigating. (Ex. 5km/hour) Streetcar (15km/hour) Cycling (15km/hour) Automobile (30km/hour) Automobile with freeways (60km/hour). Centralized Global Production: produce in one country and distribute(transport costs lows), Regional Production: all regions produce and distribute within(regional accessibility NOT economies of scale, high transport costs), Regional Specialization: Each region specializes in the production of a specific good and imports from other regions what it requires. Any excess can be used to transport to other countries. Vertical Transnational Integration: Different stages of the production occur at locations offering the best comparative advantages. One country for design, another for manufacturing, another for assembly. Main types of Economies: economies of transportation(location), scale(lower cost per unit), scope(range of goods available), agglomeration economies(clustering, sharing expenses), economies of density(all 3 perspectives are close together).Revolutionary changes: new technology, rare but profound. Incremental changes: improvement of existing transport tech. ICT: information and communication technologies. Major Economic Sectors: Primary: mainly natural resources-related, Secondary: manufacturing-related,Tertiary: retail-oriented/related, Quaternary: service-related. Rail Transportation: physical infrastructure(tracks, stations), engines (locomotives), space (rail cars). Penetration lines: link port city to hinterland(freight, natural resources) Regional Networks: to connect highly densely populated areas. Transcontinental lines: connect objects to different countries. Pipeline: is inflexible to demand changes. Maritime transportation: best for economies of scale. Passenger vessels (ferries and cruises), bulk carriers (carry specific commodities), general cargo (replaced with container ships), roll on-roll off(RORO) (cars, trucks, and trains). Two Main Markets: Bulk(freight not packaged), Break-Bulk(cargo that has been packaged). Circum Equatorial: west side to east side of world North South Connectors: Connects countries relatively close but on opposite ends in terms of North and South. Transoceanic: Connect a series of ports along ranges of large oceanic masses.(transpacific, transindian, transatlantic). Transshipment: connect regional port systems to transoceanic and circum equatorial routes, hub-and-spoke services. Passenger planes: short range(connection, frequency), medium(destinations within continent), long  (high capacity, long distance).Air Transport: ideal for small, high value goods. (JIT production with low inventory). Air Freight Types: dedicated cargo operators(freight only), combination services(both with cargo in bellyhold), passenger operators(focus on passengers, cargo in bellyhold), air freight integrators(hub and spoke), specialized operators(niche markets). Different geographical markets, transport markets, levels of service. Modal Competition: cost, distance, quantities, value. Modal shift: one mode is advantageous over another on same route/market. Intermodal: use of 2 or more modes.(econ of scales, frequency, interchange. Multimodal vs. Intermodal: inter = integrated transport network (transshipment) multi- only 1 mode per shi

  • Boxcar: carry general goods. (b) Flat Car: wood, agricultural equipment, manufactured goods, containers, etc. Comes in different sizes and shapes so the shape can vary drastically.(c) Gondola: Because of low side walls, gondolas are used to carry either very dense material, such as steel plates or bulky items. d) Hopper: carry loose bulk commodities such as coal, ore, and grain. Side walls are usually tall and has a cap/lid e) reefer (refrigerated cars): carry fresh food (meat, fruit).(f) tank cars: carry liquid

Containerization: 20ft (TEU) 40ft (FEU, less common) Bigger = reduce loading/unloading time Advantages: Standard product, flexible, management (identification code), econ of scales (1.5%), speed (biggest advantage), warehouse (less risk), security. Joint Operations: justify capital costs, share maintenance costs, both freight and passengers: Disadvantages: different location of demand, frequency of demand, timing, traffic balance, reliability. Terminals: can be points of interchange, intermediary (same and different modes) (economical, share expenses.) 3 Attributes: location (serve population, outside central areas), accessibility (terminals & transport system), infrastructure (nominal capacity, current traffic, future trends) Utilization rate: 75 – 80% (avoid congestion) Capacity: Static (facility expansion, land) Dynamic (labor, tech) Functionality: connectivity, interface, buffer (different capacities/frequencies). Passenger Terminal: good design, scheduling of arrivals/departures. Airport terminals: most complex. Measurement: # of passengers, # of aircraft movements. Freight Terminal: differentiated functionally (mode, commodities) Measurement: difficult to compare bulk Vs general cargo (weight, value) Containers: # of lifts/hr. Breman Rule: weigh cargo in terms of labor costs/ton (1 ton general cargo = 3 tons dry bulk, 12 tons liquid) Terminal Costs: important for total transport cost, fixed cost (infrastructure, transshipment, administration) Road Terminals: accommodate drivers not freight. TL/depots: serves 1 client (doesn’t have to use full capacity, client will pay full) LTL: no terminals, multiple clients (not full capacity, time consuming). Price per unit is lower in TL than LTL. 3 Terminal Types: PUD (local area, handle freight), Break bulk (no customer contact intermediate for PUD), Relay (no freight touched, change drivers) Fixed: 10 – 30%, Variable: 70 – 90% Major costs: Driver wages & fuel Operating Ratio: (Operating expenses/Operating revenue) x 100 Lower = more profitable. Rail Terminals: freight yards, terminal areas Fixed cost: 20-50% Hump Yard: classifies railcars (terminal) Variable costs: Labor & fuel Issues: location, setting Airport Terminals: Major Players: government (federal-construction, local-maintenance), operators (rent, landing fees, etc.), users (airline tickets) Terminal Types: Linear (jet bridges, large size, low activity), Islet (low space, high activity), Transporter (smaller terminal/planes, longer boarding times) Maritime Terminals (Ports): loading/unloading & servicing (freight & ships) 4,600 ports (100 global). Monofunctional ports (limited, dry/liquid bulks), Polyfunctional ports (variety) International Trade: Maritime (90%, containers) & Air (high value) Road & Rail focus on “first & last mile” in global distribution. Economic Systems: Production & Consumption. Commodities: resources that can be consumed. Commod Chain: Bulk: Supplier (higher volume, lower frequency) LTL: Market (lower volume, higher frequency) Landed Costs: all costs incurred to produce (transportation) Cold Chain: temperature (food & pharma) Geographical Specialization: self-reliance (no transport link), regional trade (trade between regions), international trade (gateway, heavy reliance on transport) Cost (incurred) Vs Rate (charges) Distance vs Cost: length, time, energy {no effects (ttc, telecom, service zone), linear effects(step wise, fuel), non-linear effects(empty back hauls), intermodal transport (linehaul, loading)} Third Party Vs Own Party Transport 3PL:not owner, only takes and store products Pros: expand markets, low costs, core comp Cons: control, security Asset Based: own assets (greater visibility, accountability, availability, employees, internal bias) Non-Asset Based: (extra party, negotiates contracts, not restricted, more flexible) (lower accountability, lower visibility)

Smile curve: (concepts, process, markets) manufacturing: least value-added stage

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