Logistics management The process of planning, implementing, and controlling the efficient, effective flow and storage of goods, services, and related information from the point of origin to point of consumption for the purpose of conforming to customer requirements

Logistics systems analysis The science that studies how to convey items from production to consumption in a timely, cost-effective manner

1. Shippers and Carriers

Shipper: an organization that needs to move freight

e.g. retailors (Walmart), manufacturers (Intel)

Carrier: an organization that move freight for shippers

Public vs. Private Carriers

• Public carrier: offers service for sale to other companies
  • Spot market (eg. United Airlines, FedEx, Maersk), Contract
• Private carrier: provides internal service to a shipper
  • Walmart, Publix, Exxon-mobil have significant private carrier operations

3. Modes

Mode: refers to the type of transportation service Historical modes: Air freight, Trucking or motor freight, Railroad, Water freight, Pipeline Intermodal: refers to containerized transportation operated with multiple modes, including:

1. International ocean container intermodal (ocean plus railroad and/or truck)
2. Domestic container intermodal (railroad plus truck)
3. Air freight intermodal (air plus truck)

4. Freight Resources

Problems in freight transportation system design, planning, and control center on decisions about how to use resources to accomplish objectives

4.1 Mobile Resources

(1) Containers (ocean containers, trailers, ship holds, air containers, box cars…) Vessels into which freight is packed for movement

(2) Vehicles (tractors, locomotives, tugboats, ships, aircraft) Transportation motive power units, laden with containers

• Sometimes integrated with containers, sometimes separate
• May move with either or both of loaded or empty containers

(3) Operators Onboard humans that pilot vehicles (hardest to manage)

• Often most costly resource
• Often most constrained resource: safety regulations, work rules, limits on human performance…

4.2 Fixed Resources

Often physical infrastructure that owned, operated, maintained by others

(1) Terminals: Multi-function facilities (eg. sea port)

1. Enable freight transfer between containers and vehicles
2. Enable mode changes (eg. ocean to truck)
3. Consolidation and de-consolidation
4. Temporary storage of freight, containers, vehicles
5. Maintenance and operator base

(2) Right-of-way (ROW): Connecting infrastructure enabling vehicles to move between terminals and customers

• Public ROW includes roadways, airways, waterways in U.S. (have to pay usage fee, tax…); Private ROW includes railroads and pipelines

5. System Configurations: Direct vs. Consolidation

Consolidation: To take advantage of cost economies of scale, most freight transportation systems use some form of consolidation

5.1 Compare in Container-level

1. Direct: Customer provided complete container; Load at origin, unload at destination
   • Truckload trucking, ocean containerized shipping, rail carload services
2. Consolidation: Operator loads and unload shipments into containers as needed
   • LTL, package express

5.2 Compare in Vehicle-level

1. Direct: Vehicles integrated with containers, or each veh moves a single container
   • Truckload, unit trains
2. Consolidation: Multiple containers packed onto vehicles
   • General freight trains, pup trains, container ships