4.7 Key Terms, References, and Accessibility Descriptions

Key Terms

Full Truckload (FTL) – A categorization of trucking transport when the entire truck is hired and delivered directly (Faramarzi & Drane, n.d.).

Less-than-truckload (LTL) – A categorization of trucking transport which generally includes using several orders to increase the utilization of the truck (Faramarzi & Drane, n.d.).

Garmentainers Container – A container which was made specifically for garments on hanger shipments created with a special system by using string or bar system (OOCL, 2022).

Intermodal Transport Unit (ITU) – A container for various transports that ship or move freight or good or products via intermodal transportation travel internationally or domestically.

International Transport Corridor (ITC) – A linear area such as highways, railways, roads determined by transportation modes and crossing countries or territories.

Chapter References

Chen, J., Notteboom, T., Liu, X., Yu, H., Nikitakos, N., & Chen, Y. (2019). The Nicaragua canal: Potential impact on international shipping and its attendant challenges. Maritime Economics & Logistics, 21(1), 79-98. http://dx.doi.org/10.1057/s41278-017-0095-3

Faramarzi, H., & Drane, M. (n.d.). Introduction to operations management. Seneca College Pressbooks Network. https://pressbooks.senecacollege.ca/operationsmanagementintro/chapter/supply-chain/

Jung, H., Kim, J., & Shin, K. (2019). Importance analysis of decision-making factors for selecting international freight transportation mode. The Asian Journal of Shipping and Logistics, 35(1), 55–62. https://www.sciencedirect.com/science/article/pii/S2092521219300082

Keltto, T., & Su-Han, W. (2020). Profitability of the northern sea route for liquid bulk shipping under post 2020 sulphur regulations. International Journal of Logistics Management, 31(2), 313-332. http://dx.doi.org/10.1108/IJLM-12-2018-0314

Khazheeva, M. A., & Bondarchuk, E. A. (2021). Economic connectivity of international transport corridor projects and the Trans-Siberian railway. Les Ulis: EDP Sciences. http://dx.doi.org/10.1051/shsconf/202111200031

Laake, J., & Zhang, A. (2016). Joint optimization of strategic fleet planning and contract analysis in tramp shipping. Applied Economics, 48(3), 203–211. https://doi.org/10.1080/00036846.2015.1076151

Leszek MINDUR. (2021). Combined/intermodal transport – the global trends. Transport Problems, 16(3), 65–75. https://doi.org/10.21307/tp-2021-042

Lun, V., & Marlow, P. (2011). The impact of capacity on firm performance: a study of the liner shipping industry. https://www.inderscienceonline.com/doi/pdf/10.1504/IJSTL.2011.037819

Mangan, J., & Lalwani, C. (2016). Global logistics and supply chain management (3rd ed.). Wiley.

Morash, E. A., & Clinton, S. R. (1997). The role of transportation capabilities in international supply chain management. Transportation Journal (American Society of Transportation & Logistics Inc), 36(3), 5–17.

OOCL (2022). Orient overseas container line. Container types. https://www.oocl.com/eng/ourservices/containers/containerspecifications/Pages/flatracks.aspx

Richmond, S., Bloom, G., Duca, M.D., Haywood, A., Kohn, M., Low, S., Masters, T., McCrohan, d., St. Lous.,R., & Vorhees, M. (2015). Trans-Siberian railway. Lonely Planet Publications Pty Ld. 5th ed., http://media.lonelyplanet.com/shop/pdfs/trans-siberian-railway-5-contents.pdf

Statista. (November 23, 2021). International seaborne trade carried by container ships from 1980 to 2020 (in billion tons loaded) [Graph]. In Statista. https://www.google.com/url?q=https://www.statista.com/statistics/253987/international-seaborne-trade-carried-by-containers/&sa=D&source=docs&ust=1643059680207677&usg=AOvVaw3cFnBq9OHQRDl088SkvnN-

Tapp, S. (2016). The role of transportation networks in moving Canadian trade. Policy Options. https://policyoptions.irpp.org/2016/02/29/the-role-of-transportation-networks-in-moving-canadian-trade/

Tarver, E. (2021). Value chain vs. supply chain: What’s the difference? Investopedia.
https://www.investopedia.com/ask/answers/043015/what-difference-between-value-chain-and-supply-chain.asp

UNCTAD. (November 18, 2021). Estimated containerized cargo flows on major container trade routes in 2021, by trade route (in million TEUs) [Graph]. In Statista. https://www.statista.com/statistics/253988/estimated-containerized-cargo-flows-on-major-container-trade-routes/

Image Descriptions

Fig 4.1: Trucking: Flexible (truck load vs less-than-truckload), drivers in demand, creates highway congestion.
Railroads: Ideal for bulkier products or containers, cost effective over distances, energy efficient.
Airfreight: Ideal for small & light products, prioritizes speed over cost, reliable, air pollutant.
Waterway: Ideal for low cost, heavy products, very common, inexpensive.
Pipeline: Used for crude oil, gas, petroleum, once built, very cost effective, land and water pollutant.
Multimodal: Uses a combination of modes through a carrier, products secured in containers, contractual with a single carrier. [Return to image].

Fig 4.3: Trade in billion tons loaded:
1980 = 0.1 billion; 1985 = 0.15 billion; 1990 = 0.2 billion; 1995 = 0.4 billion; 2000 = 0.6 billion; 2005 = 0.95 billion; 2010 = 1.2 billion; 2015 = 1.6 billion; 2016 = 1.7 billion; 2017 = 1.75 billion; 2018, 2019, & 2020 = 1.85 billion. [Return to image].

Fig 4.4: Trans-Pacific is 32.2 million TEUs.
Europe-Asia-Europe is 26.3 million TEUs.
Transatlantic is 8 million TEUs. [Return to image].

Fig 4.5: World map illustrating various trade routes. Air freight hubs are indicated with a blue airplane icon. Northern sea route is indicated with a purple dashed line which goes north of all continents through the arctic. Trans-Mongolian and Trans-Siberian rails are indicated with yellow and red dashed lines respectively and are located through Russia into China. Commercial maritime routes are indicated with a green solid line and are located throughout the globe except for the arctic which is where the Northern Sea Route is located. Major ports are indicated with red target icons with various TEU levels: >20 million, 10-20 million, and < 20 million TEUs. [Return to image].

Table 4.2: Types of containers: general purpose (2 sizes 20ft and 40ft); flatracks (3 sizes 20ft, 40ft, and 40×9’6″); garmentainers (2 sizes 20ft and 40ft); high cube (40ft and 45ft); open top (3 sizes 20ft, 40×8’6″, and 40×9’6″); refrigerated (2 sizes 20ft and 40ft); super rack (1 size 40ft) [Return to table].

Fig 4.6: Road: 66.8% with US, 21.5% non-US.
Marine: 6.5% US, 51.5% non-US.
Rail: 21.0% with US, 3.1% non-US.
Air: 5.8% with US, 23.9% non-US. [Return to image].

Fig 4.7: 2.1 average annual change in total trade growth. 0.2 average annual change in trade with US. 6.6 average annual change in trade with all other countries. [Return to image].

Fig 4:8: Road: 59.7% in 2002, 48.3% in 2012.
Marine: 14.8% in 2002, 24.9% in 2012.
Rail: 14.79% in 2002, 13.79% in 2012.
Air: 10.89% in 2002, 13.29% in 2012. [Return to image].

Alternative Text-Based Activities

Assessing What You Already Know (Text-Based)

Question 1:

Transportation is an essential and integral part of the Global Value Chain. Transportation is beneficial for society and helps in globalization of the world economy.

• True (Correct)
• False (Incorrect)

Feedback: Transportation is an essential and integral part of the Global Value Chain. Transportation is beneficial for society and helps in globalization of the world economy. That is why it plays a vital role in human life, companies, suppliers and distributors. This service should be effective, efficient and appropriately managed by an enterprise. Demand for transportation depends on a party wishing to move goods or freight efficiently and effectively from one point to another.

Question 2:

Does transportation add value in international supply chain management?

• Yes (Correct)
• No (Incorrect)

Feedback: Transportation adds value in international supply chain management by reducing transportation time and as a result supply chain costs and frees up time on other areas of the supply chain. Also, suppose delays happened in some areas of the supply chain. In that case, transportation can help to speed up their performance and reduce time more efficiently by choosing the fastest way of delivering goods to the customer.

Question 3:

Supply chain cost minimized by dint of transportation’ benefits such as ….. Check all that apply.

• reducing inventory cost (Correct)
• safety stocks (Correct)
• cycle stocks (Correct)
• inventory velocity (Correct)
• extend activities (Incorrect)
• minimum dwell-times (Correct)
• increase shelf life % for customers (Correct)
• operational planning (Correct)
• flexible time (Incorrect)

Feedback: Transportation can help organizations to reduce cycle stock and increase customer satisfaction because of frequency deliveries. Supply chain cost minimized by dint of transportation’ benefits such as reducing inventory cost, safety stocks, cycle stocks, inventory velocity, minimum dwell-times, increase shelf life % for customers, operational planning.

Question 4:

Transportation plays a vital role in supply chains which offer (_____) and (_____).

• Reliability and consistency (Correct)
• Freedom and fast (Incorrect)

Feedback: Transportation plays a vital role in supply chains which offer reliability and consistency; flexibility in terms of location, delivery, time, quantity, goods, cost; Just-in-Time delivery; customization by integration of supply chain; standardization by making activities predictable, reduction of total cost (Morash & Clinton, 1997) [Return to activity].

Check Your Understanding: Identify different modes of transportation and their characteristics (Text-based)

Question 1:

Choose criteria by which the mode of freight transportation will be chosen. Check all that apply.

• the distance (Correct)
• Value (Correct)
• availability of services (Correct)
• freight rates (Correct)
• characteristics of goods (Correct)
• Budget (Correct)
• Appearance (Incorrect)
• cost of transport (Correct)
• Reliability (Correct)
• safety (Correct)
• Urgency (Correct)
• carrier timing (Correct)
• none of the above (Incorrect)

Feedback: There are many criteria by which the mode of freight transportation will be chosen. It depends on the distance, value, availability of services, freight rates, characteristics of goods, budget, cost of transport, reliability, safety, urgency, carrier timing, etc. A critical decision for companies is to choose the suitable carrier to transport.

Question 2:

What are the five (5) modes of transportation? Write your response in the box below.

Feedback: Modes of transportation are classified into the following types – Road, Rail, Air, Water, Pipeline.

Question 3:

Drag and Drop the modes in correct Category

Feedback: It is important for companies to select the right mode of transportation. Transportation plays a vital role in supply chains which offer reliability and consistency; flexibility in terms of location, delivery, time, quantity, goods, cost; Just-in-Time delivery; customization by integration of supply chain; standardization by making activities predictable, reduction of total cost (Morash & Clinton, 1997)

Question 4:

Which mode of transportation is generally used when speed is more important than cost?

• Rail (Incorrect)
• Water (Incorrect)
• Air (Correct)
• Road (Incorrect)
• Pipeline (Incorrect)

Feedback: Urgent air shipping may be reasonable for expensive, small, and light goods. Air carriers charge by a combination of the weight and size of the shipment. This mode of transport is generally used when speed is more important than cost. In addition, shipping by air is very reliable. [Return to activity].

Check Your Understanding: Assess infrastructure and equipment types used in different modes of transportation

Question 1:

Why is intermodal transportation used? Write your response in the box below.

Feedback: Because intermodal transportation uses only one container along the entire route, often goods move intermodal by using several transport modes in a single container along the whole route. As a result, intermodal transportation has excellent advantages, such as reducing the time and the chance of freight damage, flexibility, and secure goods flow.

Question 2:

If the company needs to deliver cargo quickly to their destination and over a short distance, they prefer to choose intermodal transportation on the road.

• True (Correct)
• False (Incorrect)

Feedback: If the company needs to deliver cargo quickly to their destination and over a short distance, they prefer to choose intermodal transportation on the road. The freight will be delivered in the shortest time to their last destination.

Question 3:

How many types of containers exist?

• 8
• 7 (correct)
• 9
• 3
• 6
• 5

Feedback: 7. General purpose, flatracks, garmentainers, high cube, open top, refrigerated, super rack. There are many types and standardized sizes of intermodal transport unit (ITU)/containers; however, 90 % of all containers used worldwide are general-purpose containers.

Question 4:

What is the largest shipping zone of cargo volume, which has transported over 31.2 million of freight in 2021?

• Trans-Pacific Ocean (Correct)
• Europe-Asia -Europe
• Transatlantic

Feedback: Also, as globalization continues growing, the largest shipping zone of cargo volume is the Trans-Pacific Ocean, which transported over 31.2 million twenty-foot equivalent units [TEUs] of freight in 2021 (UNCTAD, November 18, 2021). This mode of transport is environmentally friendly and the most cost-effective way to transfer freight internationally. [Return to activity].

Check Your Understanding: Describe International Transport Network

Question 1:

The international Transport Networks consist of shipping routes worldwide and container ports connecting many countries and continents for moving freight.

• True (Correct)
• False(Incorrect)

Feedback: Now that you know the modes of transportation in detail, it would be beneficial to analyze international transport networks. The international Transport Networks consist of shipping routes worldwide and container ports connecting many countries and continents for moving freight.

Question 2:

Choose routes that exist now below? Check all that apply

• The Northern Sea Route (NSR)
• Trans-Siberian railway
• The Suez Canal/ Panama
• Trans-Mongolian Route
• Commercial Maritime Route
• All of the above (Correct)

Feedback: The Northern Sea Route (NSR), Trans-Siberian railway, The Suez Canal/ Panama, Trans-Mongolian Route, Commercial Maritime Route.

Question 3:

Which of the new two routes are planned and emerge globally? Check all that apply

• Nicaragua Canal (Correct)
• South Africa Canal
• Northern Sea Route (Correct)
• Ethiopia Sea Route
• Nairobi Sea Route

Feedback: New routes are planned and emerge globally, such as the Nicaragua Canal and the Northern Sea Route. Shipping channels can significantly impact global economic integration, export service, and world seaborne trade and help less economically developed regions stimulate foreign trade (Chen, Notteboom, Liu, Yu, Nikitakos, & Chen, 2019) [16]. The Nicaragua Canal will connect the Caribbean Sea with the Pacific Ocean to compete with the Panama Canal

Question 4:

What is the significant difference between routes? Check all that apply.

• Cost (Correct)
• Time (Correct)
• Flexibility
• Delivery speed
• Distance
• Risks
• Customer satisfaction

Feedback: The significant difference will be related to cost and time. The vital key role in deciding the freight shipment is the cost factor. [Return to activity].

Check Your Understanding: Explain how transportation adds value to the global value chain

Question 1:

Transportation adds value to the global value chain for many aspects such as reducing time delivery, efficiency, reliability, flexibility, increasing visibility, transparency, and enhancing customer satisfaction and service.

• True (Correct)
• False(Incorrect)

Feedback: Transportation adds value to the global value chain for many aspects such as reducing time delivery, efficiency, reliability, flexibility, increasing visibility, transparency, and enhancing customer satisfaction and service. In addition, various transportation networks can significantly impact global economic integration, export service, the connection between countries and continents, and help less economically developed regions stimulate foreign trade (Chen, Notteboom, Liu, Yu, Nikitakos, & Chen, 2019)

Question 2:

Global chain relies on (_____) and (_______) of transport; that is why many companies use intermodal modes. Choose two options.

• Efficiency (Correct)
• Reliance(Incorrect)
• Flexibility (Correct)
• Delivery time(Incorrect)

Feedback: The global chain relies on efficiency and flexibility of transport; that is why many companies use intermodal modes.

Question 3:

Which areas for improvement Jacques Roy (HEC Montréal, Professor of Logistics and Operations Management) identified? Check all that apply.

• roads: domestic congestion (Correct)
• rail: capacity constraints (Correct)
• road: cheap price (Incorrect)
• sea: container port competitiveness (Correct)
• air: the impact of weather conditions and conveyance (Incorrect)
• air: cargo capacity, competitiveness and airport landing fees (Correct)

Feedback: Jacques Roy (HEC Montréal, Professor of Logistics and Operations Management), examines the role of Canada’s transportation infrastructure in moving goods in and out of the country by four key transportation modes: road, rail, sea and air. Overall, he finds that Canada’s transportation and logistics networks perform reasonably well compared with other countries. But he identifies several areas for improvement, namely for:

• roads: domestic congestion;
• rail: capacity constraints;
• sea: container port competitiveness; and
• air: cargo capacity, competitiveness and airport landing fees.

(Tapp, 2016) [CC-BY-ND]

Question 4:

Minimizing inbound and outbound logistics and operations are keys to success for the competitive world’s business field.

• True (Incorrect)
• False (Correct)

Feedback: Maximizing inbound and outbound logistics and operations are keys to success for the competitive world’s business field. It’s self-evident that technical improvements help intermodal transportation be more efficient for connecting between modes of transport and the value chain. [Return to activity].