Transportation Management Motor Carriers Industry

[Virtual Presenter] Transportation Management Motor Carriers Industry.

[Virtual Presenter] Transportation Management Types Of Carriers.

[Virtual Presenter] For-hire Provides services to the public & charges a fee for the service Local against Intercity Operators Local carriers pick up & deliver freight within the commercial zone of a city Intercity carriers operate between specifically defined commercial zones..

[Virtual Presenter] Transportation Management Private Carriers Provides a service to the industry or a company that owns or leases the vehicles, but does not charge a fee. May transport commodities for-hire In this capacity, the private carrier is really an exempt for-hire carrier..

[Virtual Presenter] Exempt Carriers Specifically exempt from economic regulation Gains this status by Type of commodity hauled (I.e., agricultural commodities) Nature of its operations (incidental to air transportation).

[Audio] Common Carriers Required to serve the general public upon demand, at reasonable rates, & without discrimination. Contract Carriers Service specific shippers with whom the carriers have a continuing contract. Thus, typically not available for public use.

[Audio] A secondary distinction of the motor carrier industry is between the Truck Load and Less-Than-Truck Load carriers. Truckload (T-L---) Carriers Provide service to shippers who tender sufficient volume to meet the minimum weights required for a full truckload shipment and TL rate (or who will pay the required amount)..

[Audio] Less-than-Truckload (L-T-L--) Carriers Provide service to shippers who tender shipments lower than minimum truckload quantities, such as 50 to 10000 pounds..

[Audio] Less-than-Truckload (L-T-L--) Carriers Consolidate numerous smaller shipments into TL quantities for Intercity transport Disaggregate TL shipments at destination for delivery in smaller quantities..

[Audio] Number Of Carriers. Transportation Management.

[Audio] The motor carrier industry consists of a large number of small carriers, particularly the TL (truckload) segment of the industry. The large number of small carriers is due to the limited capital needed to enter the TL industry. A motor carrier can be formed with as little as US$5000 to $10000.

[Audio] and the balance can be financed with the vehicle serving as collateral for the loan. However the, L-T-L carriers have terminals that increase the capital requirements and thus add a constraint to entry..

[Audio] Terminals. Transportation Management. TERMINALS.

[Audio] Pickup and Delivery (P-U-D--) Terminals Freight is collected from shippers and brought to the P-U-D terminal where it is consolidated with other loads going in the same direction or to the same destination. Consolidated shipments loaded onto a line-hauler for transport to the.

[Audio] Pickup and Delivery (P-U-D--) Terminals destination terminal. At the destination terminal, line-hauler is emptied, and the combined shipments are separated and reloaded unto city trucks. City trucks then deliver the shipments to the ultimate consignee..

[Audio] Pickup and Delivery (P-U-D--) Terminals puds are also used for Sales, billing, and claim handling Limited vehicle maintenance Change freight from one carrier to another puds are also called end-of-line terminals..

[Audio] Break-Bulk Terminals Basic function is the separation of combined shipments Freight is unloaded from consolidated truckloads, sorted by destination, and reloaded for dispatch to destination..

[Audio] Break-Bulk Terminals Generally, break-bulk terminals are centrally located within the carrier’s operating scope and at the junction of major east-west and north-south highways. Provides greater efficiency..

[Audio] Relay Terminals Unlike puds and Break-Bulk terminals, the freight is never touched at a relay terminal. Necessitated by the maximum hours-of-service regulation that is imposed on drivers. 10 hours maximum driving after 8 consecutive hours off-duty..

[Audio] Relay Terminals At the relay terminal, one driver substitutes for another (the term slip seat is used for relay terminals) Relay terminals are normally located within a maximum of 10 hours driving time from the point of origin. Alternative to the relay terminal is the sleeper team – 2 drivers..

[Audio] market STRUCTURE (commodities hauled). Transportation Management.

[Audio] When discussing the carrier industry, consideration must be given to the commodities hauled. Motor carrier vehicles, both for-hire and private, primarily transport manufactured, high-value products..

[Audio] These vehicles carry more than a majority of the various manufactured commodities categories. These commodity list includes food products and manufacturing products, consumer goods, and industrial goods..

[Audio] Motor carriers transport less of commodities such as grain, primary nonferrous metal products, et cetera, as they are generally moved in large volume over long distance. Therefore based on its capacity, motor carriers mainly move low volume, high-value manufactured goods..

[Audio] Competition. Transportation Management. COMPETITION.

[Audio] Motor carriers compete vigorously with one another for freight. With the large number of for-hire motor carriers, rivalry between firms can be intense The most severe competition for for-hire carriers often comes from the private carrier..

[Audio] The motor carrier industry offers few capital constraints to entry, with a relatively small investment, an individual can start a motor carrier business and compete with existing carrier. On a whole, the motor carrier industry, especially for contract carriers, has been market oriented..

[Audio] Meeting customer requirements has been a common trait of the motor carrier and the small size of the majority of for-hire carriers allows them to give individualized attention to customers. The motor carriers compete with themselves for low volume high-value manufactured or finished goods..

[Audio] General Service Characteristics. Transportation Management.

[Audio] Offers highest Accessibility of any mode Can serve virtually any location Not constrained by waterways, rail tracks, or airport locations Almost every shipping & receiving locations is accessible via highways.

[Audio] Speed For loads traveling less than 500 miles, usually can deliver in less time than any other mode Even over 500 miles, can be, in the right situation, faster than air.

[Audio] Speed For example, shipment traveling 600 miles Truck = 12 hours (600 miles @ 50 miles per hour) Air could take up to 24 hours Flight time = 1 ½ hours 3 hours needed for pickup and another 3 for delivery If only 1 flight per day is scheduled, shipment might have to wait 24 hours before it lifts off..

[Audio] Cargo-Carrying Capacity Though smaller than many other modes, shippers can enjoy the TL rate (volume discount) with a lower volume. Most TL minimums set at 20000 – 30000 pounds Rail carload minimums are often set at 40000 – 60000 pounds. Barge (water) minimums are set in terms of hundreds of tons.

[Audio] Cargo-Carrying Capacity Smaller shipping size provides buyers and sellers with Lower inventory levels Lower inventory-carry costs More frequent services.

[Audio] Smoothness of Transport Given the suspension system and pneumatic tires used on trucks, motor carriers offer smoother rides than rail or water Results in less damage to the cargo (though some does occur) Less damage results in reduced packaging requirements and thus packaging costs.

[Audio] Customer Focus By it’s very nature, the industry tends to be more customer or marketing-oriented Due in large part to the small size of most carriers (must offer higher service to compete).

[Audio] Types Of Trucks. Transportation Management.

[Audio] Line-Haul Trucks Tractor-trailer combination of 3 or more axles Capacity depends on size (length) and state maximum weight limits Most states now allow tractor-trailer combos with 5 axles that can haul a maximum of 80000 pounds gross weight (110000 in Michigan) Most vehicles weigh (empty) 30000 pounds, leaving a maximum net payload of 50000 pounds or 25 tons. Anything over 5 axles generally requires a special permit.

[Audio] Line-Haul Trucks Capacity is also affected by the density of the freight A 53’ x 8’ x 8’ trailer has 3392 cubic feet of space If the commodity hauled has a density of 10 pounds per cubic foot, the maximum payload for the vehicle would be 33920 (3392 cubic feet x 10 pounds./cubic foot).

[Audio] City Trucks Normally smaller than line-haulers and are single units Typically 20 to 25 feet long with a cargo unit 15 to 20 feet long. There is growing use of small trailers that are 20 to 28 feet long..

[Audio] Special Vehicles Dry Van Standard trailer or straight truck with all sides enclosed Open Top Trailer top is open to permit loading of odd-sized freight through the top Flatbed Trailer has no top or sides; used extensively to haul steel, lumber, et cetera.

[Audio] Special Vehicles Tank Trailer Cylinder trailer used to haul liquids and gases Refrigerated Trailers (Reefers) Cargo unit with controlled temperatures High Cube Trailer Cargo unit has drop-frame design or is higher than normal to increase cubic capacity.

Transportation Management. [image] Source:.

[Audio] Cost Structure. Transportation Management.

[Audio] Cost structure Approximately 70 to 90 % of motor carrier costs are variable. Allows the carrier to increase/decrease the number of vehicles used in short periods of time and in small increments of capacity..

[Audio] Cost structure Low fixed costs due to Public financing of the highway system Terminals are less expensive than those used by other modes Bulk of the carrier’s cost is associated with daily operating costs – fuel, wages, & maintenance In 1995, average total cost to operate a tractor-trailer was 130.2 cents per mile (70% of which was variable costs.

Transportation Management. [image] (Cents Per Mile) 2.9 Interest on & Trailer Vohitte Depretiätlon 10.0 Insurence 16,0 Management & oveiheod •1.6 Depreciation & Intereston Other tterv, 19.2 Furl 6.7 •2.7 fires Source: Scri:e, fruit 89B 373 Driver 15.4 Maintennce License.

[Audio] Labour Accounts for 29% of total costs per vehicle mile Usually absorb about 50% of a carrier’s revenue dollar. Local drivers paid by the hour Driving Time Regulations (U-S-D-O-T) 15 hours on-duty after 8 hours off-duty 10 hours driving after 8 hours off-duty Cannot accumulate more than 60 hours on-duty in 7 consecutive days, or 70 in 8..

[Audio] operating ratio Measure of operating efficiency used by motor carriers. Function of operating expenses and operating revenues Operating expenses are those expenses directly associated with the transportation of freight, excluding non-transportation expenses and interest costs..

[Audio] operating ratio Operating revenues are the total operating revenues generated from freight transportation services. The closer the ratio is to 100, the more indicative of the possible need to raise rates to increase total revenues. For example, an operation ratio of 94 means that 94 cents of every operating.