Business_Logistics_-_5_Outbound_Logistics
Business Logistics
Outbound Logistics
(Distribution / Transportation)
Dr. Juanling (Jenny) Huang
Week 5, 2011
Distribution
All modes of the transportation of goods throughout all parts of the supply chain.It includes:
-The supply of raw materials to a manufacturer -The distribution of consumer products to retailer or direct to the customer
-Services provided by the national post express and parcel carriers couriers
Physical Distribution Management
Organising the integrated movement and storage of materials.
The UK Distribution Industry
?Domestic and international transport services providers by
Road , Rail , Air , Water and Pipeline
?Suppliers of wholesaling , storage and warehousing ?supporting services provided by infrastructure providers such as port and airport operators ?The services of agents such as freight forwarders
(KeyNote -Distribution Industry, 2009)
The UK Freight Transport Market by Sector (2008)
Turnover (￡m)Share of Total (%)Road Freight Transport 27,71732.0Freight Forwarding
16,56219.1Other supporting transport activities (e.g. Warehouse, Storage, Terminal etc) 11,76013.6
Cargo handling and storage
11,13012.9Water transport (Inland, Coastal)8,79210.2Railway transport 6,6467.7Air transport 2,080 2.4National post
957 1.1Courier (other than the National post)
898 1.0Total
86,542
100.0
(KeyNote -Distribution Industry, 2009)
The UK Freight Transport Market by Sector (2008)Volume (m Tonnes)No.of Enterprise Road Freight Transport 2,018.134,170Freight Forwarding N/A 1,230Other supporting transport activities (e.g. Warehouse, Storage, Terminal etc) Cargo handling and storage
Water Transport (Inland, Coastal)570.6265Railway Transport 105.695Air Transport 1.1441,165Pipeline 14810National post and Courier 3,210
Total 2,843.4440,145
(KeyNote -Distribution Industry, 2009)
The UK Freight Transport Market by Sector (2008)Employment (,000)Share of
Total (%)Road Freight Transport 490.739.7Freight Forwarding 332.926.9Other supporting transport activities (e.g. Warehouse, Storage, Terminal etc) Cargo handling and storage
Water transport (Inland, Coastal)15.3 1.2Railway transport 51.4 4.2Air transport 89.67.2National post 257.320.8Courier (other than the National post)
Total 1,237.2100.0
Road Transport
Definition:
domestic and international road freight transport by road that is carried out by vehicles.
Around 37% of the total of all goods moved by UK domestic road transport (213,750 miles of roads)-Contract logistics specialists
-Dedicated ‘in house’ transport operation for their clients
Road Transport
?
Wincanton,
Salvesen Logistics
(Norbert Dentressangle)
?Exel Europe and Exel UK
?Deutsche Post World Net (DPWN)
?Tesco Distribution
The main players in this market are:Waterway Transport
Definition:
freight transport by sea and via rivers, canals, lakes and other inland waterways.
?Britain has 2,000 miles of inland waterways, rivers and 1,072 miles of coastline
?The UK-registered trading fleet of vessels : 7.2 million gross tonnes in 2007?The UK-owned fleet of vessels: 17.4 million gross tonnes in 2007
Waterway Transport
?The Maersk Company Ltd (Denmark)
?SK Shipping Europe PLC (South Korea)
?BP Shipping Ltd ?Evergreen Marine (UK)The largest UK-registered freight operators:Container Sizes
Type Size M 3Ft 3Load (Metric Tonnes)
?20' standard 20' x 8' x 8'6"331,17028.3?40' standard 40' x 8' x 8'6"672,39030.4?40' high 40' x 8' x 9'6"762,71430.4?45' high
45' x 8' x 9'6"
85
3,040
30.4
Type Size M 3Ft 3?45' high
45' x 8' x 9'6"
863,071Dry/steel (TEU: Twenty-Foot Equivalent Units )
Dry/aluminium Type Size M 3Ft 3?20' standard 20' x 8' x 8'6"28988?40' high 40' x 8' x 9'6"
63
2,250
Reefer/steel (Maintaining temperatures as low as -60°C/ -76°F)Shipping Terms
FCL Full Container Load LCL Loose Container Load CY Container Yard
CFS
Container Freight Station (C ustoms clearance)
CY/CY
Door-to-Door All inclusive, most expensive, least hassle
CY/CFS Door-to-Port You need to arrange move container from
port to your customer’s factory CFS/CY Port-to-Door You need to deliver container from your factory to port for shipping
CFS/CFS Port-to-Port
Cargo is delivered loose to the shipping port, packed into the container by the freight forwarder, and unpacked at the destination port
Bill of Lading (B/L)
Definition:
A document signed by a carrier (a transporter of goods) or the carrier's representative and issued to a consignor (the shipper of goods) that
evidences the receipt of goods for shipment to a specified designation and person.It is also a contract for their carriage and a document of title to them.
Rail Transport
Definition:
Domestic and international freight transport, including the international carriage of freight through the Channel Tunnel rail services and Eurotunnel.
Rail serves a number of different markets,
-Non-bulk sectors: parcels, foodstuffs and car components
-Bulk commodities: aggregates, coal and metals.-Long distances
Rail Transport
?DB Schenker Rail (UK) Ltd (formerly EWS)
?The Freightliner Ltd
?Network Rail ?Direct Rail Services
The main players in this market are:
Air Transport
Definition:
the transport of freight by air over regular routes and on regular schedules.
Most of this traffic is transported in passenger-carrying aircraft, but some is also handled by air freight charter flights.
There are also specialist cargo airlines, such as Air Atlantique and Global Supply Systems Ltd,
as well as integrated operators such as FedEx, DHL and UPS, which offer door-to-door services using their own aircraft.
Pipeline
Definition:
transports gases, liquids, slurry and other commodities through pipelines.
In the UK, the main role of pipelines is in the
transport and distribution of petroleum products from coastal refineries and storage facilities to inland population centres.
In this market, they currently lift larger tonnages than road and rail combined.
National post,
Courier and Express Services
Definition:
the pick-up, transport and delivery of mail and mail-type parcels and packages by the national postal service operator:
-Royal Mail and its subsidiary Parcelforce, -Private courier and express: DHL, FedEx, UPS This sector shares the role of provider of a
worldwide delivery system with the airlines and the maritime container operators.
E-fulfilment
Definition:
the process of delivering items that are purchased via the Internet
The consumer market for goods delivered as a result of orders made through -Mail order catalogues -Telephone
-Postal application
-E-Purchasing (estimated: ￡40bn in 2010)
Third Party Logistics (3PL) Provider
Definition:
Freight forwarders or courier agents that integrate the Operation, Warehousing and Transportation to support the distribution of products for companies, especially Small and Medium-sized Enterprises (SMEs).
Companies supplying worldwide markets are inevitably going to have to rely on transport services provided by 3PLs.
Benefits of using 3PLs
?Lower fixed costs : customers only paying for services they use
?Specialist suppliers who have expertise and use the best systems and practices ?
Suppliers can
combine work
from several customers to get economies of scale ?Guaranteed high levels of customer service
?Flexible capacity , dealing effectively with peaks and troughs in demand
?Lower exposure to risk from varying demand
?Increased geographical coverage and local knowledge
? A convenient way of entering new markets
Fourth Party Logistics (4PL) Provider
Definition:
A consulting firm specialised in Logistics,
transportation, and supply chain management. Typical 4PLs:
Summary
1.Physical Distribution Management Road, Rail, Air, Water and Pipeline Transportation Infrastructure
2.3PLs, 4PLs
3.International Trade
International Logistics vs. National Logistics Flow of materials, products, information, communication Next Week: Please read Slack, et al., 2010
pp. 97-100
Group Case Study Company
1.What is the market / geographic location for the company to buy / sell their materials / products?e.g. Locally? Nationally? Internationally?
2.What type of distribution does the company use?
e.g. Own logistics distribution? Using 3PL?3.What kind of distribution / transportation do they use?
By road, rail, water, air or pipeline?
4.How well can they manage their distribution?