Transportation Services in International Market

&
Different Transport Modes

Submitted by:
Bhupender
Dinker
Gopesh
Modes Of
Transportation
1. AIR
2. WATER
3. RAIL
4. TRUCK
5. PIPLINE
6. INTERMODAL
Factor effecting mode of
transportation
1. Accessibility
2. Transit Time
3. Reliability
4. Product safety
5. Cost
AIR CARRIERS
INDUSTRY OVERVIEW
Market Size:
Worldwide, Air cargo industry revenue is $594 billion

Market Size $ 594

billion

Total Air Carriers in Air cargo:

Federal Aviation: “88 Air carriers engaged in Air cargo”
22 Of which are considered major carriers
Major carriers: FedEx, UPS, Delta and United .
Total carriers in 88

Air cargo
Types of Air carriers
The following two primary carrier type dominate this mode:

1. COMBINATION CARRIERS:
Moves freight and passengers, often on the same trip, with cargo loaded in the belly of the
aircraft. Major U.S airlines that are Combination carriers are Delta, United, and American handle.

2. Air cargo carriers:

Focus exclusively on the movement of freight. Some carriers provide scheduled daily service
through a highly coordinated network, while others provide on-demand service for customers who
need more immediate, direct transportation service. Example FedEx and UPS.
Services provided Under Air
cargo Carriers
Integrated Carriers :
Provide door-to-door service, a consistent schedule of pickup and delivery windows and
standard expedited service through their hub-and-spoke Networks.

Nonintegrated Carriers:
Provide on-demand, air-only services from airport to airport. They rely on freight forwarders or
the customer to provide delivery service to and from the airport. The advantage of these carriers
are the speed and flexibility of unscheduled direct service and potential for same-day cargo
movement.
Types of aircrafts used:
1. Propeller plane
– Few thousand pounds, Moves letters and small packages from smaller market.

2. Jet plane (Boeing 747-400)

– Capacity of nearly 27,500 Cubic feet and 124 tons of freight, used for long range domestic
and international services.

3. Anatova 124
– can transport unique products of up to 150 tons with dimensions as large as 13 feet high by
19 feet wide.
Product Shipped by Air carrier
Primary product characteristics
-High value
-Finished goods
-Low volume
-Time sensitive

Example:

-Computers
-Pharmaceuticals
-B2C deliverers
Strengths And Limitations
Strengths
o Speed
oFreight protection
oFlexibility

Limitations
o Accessibility
oHigh Cost
oLow capacity
Obstacles to profitable growth:
Cost issues: Rising cost of kerosene-type jet fuel. For every $1 increase per barrel of oil,
world airline industry costs increase $1.6 billion.

Competition: Cutthroat competition among the international air carries for providing
services at a cheaper price.

Security challenges: Homeland Security fees, 100 percent cargo screening costs, training
and related security expenses are estimated to have an annual
impact of more than $4 billion on the industry
Motor Carrier

■ Motor carriers is the process or business of transporting goods using

motored, wheeled, nonrail vehicles majorly known as trucks.
■ It is most widely used mode of transportation in domestic supply of
goods.
■ The primary role of motor carriers is to move smaller shipments in
local, regional and national markets.
Types of motor carriers

■ Private: The private carrier provides service to the shipper that owns

or leases the vehicles, and thus does not charge a fee.
■ For-hire: A motor carrier that transports goods for other entities, as
opposed to transporting its own commodities exclusively and charge
fee for the services.
■ Common: Common carriers are required to serve the general public
whenever there is need to do so , at reasonable rates, and without
discrimination.
■ Contract: Serve specific shippers with whom the carriers have a
contract and are not available for carrying freight for the general
public.
Types of vehicles

■ Dry van. Standard trailer or straight truck with all sides closed, although the end of
the vehicle is accessible with one or two doors. These are the most common types
of vehicles.
■ Open top. Top of trailer is open to allow cargo to be lifted in and out of the vehicle
vertically.
■ Flatbed. Trailer with flatbed or no sides or top.
■ Tank trailer. Hauls liquids such as petroleum, liquid chemicals and waste material
in liquid form.
■ Refrigerated. Cargo units that provide controlled temperatures and environments.
■ Special. Special design to accommodate unique cargoes such as automobiles,
heavy lifts such as machinery, and certain types of gases under heavy pressure.
Motor Carrier

Strengths:
■ Accessibility

■ Speed or transit time

■ Flexibility

■ Frequency
Motor carrier

Limitations:
■ Small carrying capacity

■ Cost
 Primary Product Characteristics

■ Finished goods

■ Low volume

■ High value

■ Example- electronics, food, clothing and furniture.

Water carriers

■ The primary role of water carrier is to move large domestic shipments

via rivers and canals.

■ Move large shipments of international freight via oceans.

■ Water transportation is ideal for carrying very large loads in low cost.
It is by far the cheapest for the quantities shipped and distances
involved in international trade.
Types of ships(cargo)

■ General cargo ships: These are basic cargo ships; they can carry
loads, but they do not have space for the typical containers. These
ships have their own built-in cranes for loading and unloading
operations at ports.
■ Container ships: These boats are especially designed to transport
freight in containers. This kind of ship takes care of most international
dry-load transport. They are automated ships, and they load and
unload with gantry cranes.
■ Bulk carriers: These are the most suitable for transporting solid bulk
loads. They are designed for loading and unloading with spoon-shaped
cranes.
■ Oil tankers: Oil tankers are special ship tanks to transport raw oil. Certain technical
characteristics differ from cargo ships, such as the leak-tightness against the oil,
structural resistance and the pumping system for loading and unloading the fuel.
These ships are so large that they have to berth on the high seas.
■ Gas carriers: Often grouped into the same category as oil tankers, they have more
sophisticated technology to store liquid gas. Ships with chemical cargo, on the other
hand, have several tanks to keep from mixing the different substances they carry.
■ Reefer vessels: This kind of ship transports food and perishable goods that must be
kept in good condition during the trip, such as fruits and vegetables. This means the
freight that requires a special thermal treatment, specifically keeping a very low
temperature.
Water Carrier

Strengths:
■ Low cost
■ Larger Capacity
■ Flexible service
■ Safety
Water Carrier

Limitations:
■ Slow

■ Limited area of operations

■ Unsuitable for small business

 Primary Product Characteristics

■ Low value

■ Bulk commodities

■ Not time sensitive

■ Example: Crude oil, ores/minerals, clothing, toys and electronics.

Rail Transport

■ Amongst most commonly used mode of long distance transportation.

Indian Perspective USA Perspective

Run by state-owned Company – Indian Transport a significant volume of

railways transport around 5bn freight of nearly 1.9bn tons annually
passengers and over 350mn tonnes of
freight annualy

Rail traverses the length and width of Average shipment length is of around
the country covering a total length of 728 miles and is highest ton-mile
39,200 miles mode of transportation
Rail Transport

■ Require a large investment in terminals, equipment and trackage to

begin operations.

■ As output increases the average per unit production cost decreases

Rail Transport

Types:

 Linehaul freight carriers provide service between major markets

and customers within those markets. These carriers move freight in
container, carload, and unit train quantities.
 Shortline carriers serve smaller markets, handle local delivery
service, and facilitate the interline process-activities that the long-haul
carriers no longer find profitable
Rail Transport

Organization of equipment's and transportation :

 Manifest Trains contains a mixture of equipment and freight for multiple

customers, these mixed trains travel through different railyards where rail cars
can be added or removed from the train. Assembling might take up to 24 hours.
 Unit Trains move an entire block of rail cars carrying a single commodity from
origin to single destination, it uses one type of rail car and need to stop for time
consuming activities is excluded.
 Intermodal Trains focus on long distance movement of intermodal containers
and trailers.
Rail Transport

Strengths:

■ High Capacity

■ Low Costs
Rail Transport

Limitations:

■ Accessibility

■ Inconsistent Service

■ Damage Rate
Rail Transport

Primary Role:

■ Move large shipments of domestic freight for long distances.

Rail Transport

Primary Product Characteristics:

■ Low Value

■ Raw Materials

■ High Volume
Rail Transport

Products Transported

■ Coal/Coke

■ Grain

■ Chemicals
Rail Transport

Types:

■ Linehaul freight carriers

■ Shortline Carriers
Pipeline Transport

 Pipelines is a unique mode of transportation as the equipment is fixed in

place and the product moves through it in high volume.
 Pipelines effectively protect the product from contamination and also
provide a warehousing function.
 Pipelines provide the most economical form of transportation with the
lowest cost per ton of any mode
 First pipeline in India was laid down in 1962 between Assam and Noonmati
in Guwahati and later in 1964 it was extended to Barauni in Bihar and is
1167Km long.
 In USA it covers around 5.2% of total US Freight tonnage.
Pipeline Transport

 Pipeline costs are predominantly fixed. Pipeline operators must build

their own right-of-way, which is a rather expensive proposition.
 Variable costs in the industry are very low as little labour is required to
operate the pipelines and limited fuel is needed to run pumps.
 The construction of a pipeline becomes cost effective when product
flows continuously, allowing the fixed costs to be spread over a high
volume of goods.
Pipeline Transport

Types:
The oil system is made up of the following three primary types of pipelines:
 Gathering lines are very small pipelines, usually from 2 to 8 inches in
diameter. It is estimated that between 30,000 to 40,000 miles of gathering
lines exist in U.S.
 Trunk lines, measuring from 8 to 24 inches in diameter, bring crude oil
from extraction points to refineries. There are approximately 55,000 miles
of crude oil trunk lines in the United States.
 Refined product pipelines carry petroleum products-gasoline, jet fuel,
home heating oil, and diesel. These pipelines vary in size from relatively
small 8- to 12-inch diameter lines up to 42-inch diameter lines. The total
mileage nationwide of refined products pipelines is approximately 95,000
miles.
Pipeline Transport

Strengths:

■ In Transit Storage

■ Efficiency

■ Low Cost
Pipeline Transport

Limitations:

■ Slow

■ Limited Network
Pipeline Transport

Primary Role:

■ Move large volumes of domestic freight for long distances.

Pipeline Transport

Primary Product Characteristics:

■ Low Value

■ Liquid Commodities

■ Not time Sensitive

Pipeline Transport

Products Transported

■ Crude Oil

■ Petroleum

■ Gasoline

■ Natural Gas
Pipeline Transport

Types

■ Gathering Lines

■ Trunk Lines

■ Refined Product Pipelines

Intermodal Transport

 Intermodal transportation service refers to the use of two or more

carriers of different modes in the origin-to-destination movement of
freight.

 Shifting freight between modes may seem inefficient and time

consuming but the improved reach and combined service advantages
created by intermodal transportation offset these issues.
Intermodal Transport
Benefits:

■ Greater accessibility is created by linking the individual modes. The road

infrastructure allows trucks to reach locations that are inaccessible to other modes,
especially air transportation, water transportation, and pipelines and vice versa.
■ Overall cost efficiency can be achieved without sacrificing service quality
accessibility. In other words, intermodal transportation allows supply chains to
utilize the inherent capabilities of multiple modes to control cost and fulfil
customer requirements.
■ Intermodal transportation facilitates global trade. The capacity and efficiency of
Ocean transportation allow large-volume shipments to be transported between
continents at relatively low per-unit costs. The speed of air transportation allows
perishable goods to flow quickly between countries. The final domestic leg of the
delivery can take place via truck.
Intermodal Transport

Types:

 Containerized Freight is loaded into storage equipment at the

origin and delivered to the destination in or on that same piece of
equipment with no additional handling.
 Transload freight involves goods that are handled and transferred
between transportation equipment multiple times, primarily consists
of bulk oriented raw materials that must be scooped, pumped, lifted
or conveyed from one container to another when transferred from one
mode to another.
THANK YOU