SHIPPING GOODS, MARKETS & INSTRUCTIONS (VI)

Freight Transportation

Today, The Grandma has been revising her notes taken in her Logistics course in Sant Boi de Llobregat. She has been searching more information about shipping, a complex process that involves lots of information, places, protocols and instructions.

Working in Logistics is a team group. If a piece of the chain breaks, all the chain breaks and it is necessary to find the mistake and start again. It is very important to know who are your partners and whose works they are developing. This is the main reason because of The Grandma has played Who is Who, an amazing game of identification, and has revised her list of vocabulary about jobs.

More information: Who is Who I & II

The Grandma has been thinking about the importance of creating a shipping language, a code that allows the total identification of goods, transports, places, providers and customers. Language is an ancestral way of communication and every community or every economical sector has its own. Logistics has its own code created by acronyms.

The Grandma has read about the importance of learning languages talking about the example of Ramon Llull, the mathematician, polymath, philosopher, logician, Franciscan tertiary and writer from the Kingdom of Majorca. He is credited with writing the first major work of Catalan literature and also considered a pioneer of computation theory. Ramon Llull understood the importance of languages in communication and created his own codes and methods in a system named Ars Combinatoria.

The Grandma has searched more information about interesting languages used along the history like Navajo -Native American Language- and Silbo Gomero (Canary Islands) or codes like the Bell's Code -used by churches, sea transport and railway- and El Barallete a largely vanished argot which used to be employed by the traditional knife-sharpeners and umbrella-repairers (afiadores e paragüeiros) of the Galician province of Ourense.

She has also read about how Occitan poets and Gypsy people used poetry and Tarot cards, respectively, as a method to transfer information in a hidden way.

More information: Inbound Logistics

Freight transport is the physical process of transporting commodities and merchandise goods and cargo. The term shipping originally referred to transport by sea but in American English, it has been extended to refer to transport by land or air, in International English: carriage, as well. Logistics, a term borrowed from the military environment, is also used in the same sense.

Ricard is preparing a new shipping

Much freight transport is done by ships. An individual nation's fleet and the people that crew it are referred to as its merchant navy or merchant marine. Merchant shipping is the lifeblood of the world economy, carrying 90% of international trade with 102,194 commercial ships worldwide. On rivers and canals, barges are often used to carry bulk cargo.

Cargo is transported by air in specialized cargo aircraft and in the luggage compartments of passenger aircraft. Air freight is typically the fastest mode for long-distance freight transport, but it is also the most expensive.

Intermodal freight transport refers to shipments that involve more than one mode. More specifically it usually refers to the use of intermodal shipping containers that are easily transferred between ship, rail, plane and truck.

For example, a shipper works together with both ground and air transportation to ship an item overseas. Intermodal freight transport is used to plan the route and carry out the shipping service from the manufacturer to the door of the recipient.

More information: Freight Center

Common trading terms used in shipping goods internationally include:

-Free on Board (FOB)–the exporter delivers the goods at the specified location and on board the vessel. Costs paid by the exporter include load, lash, secure and stow the cargo, including securing cargo not to move in the ships hold, protecting the cargo from contact with the double bottom to prevent slipping, and protection against damage from condensation. For example, FOB JNPT means that the exporter delivers the goods to the Jawahar lal Nehru Port, India, and pays for the cargo to be loaded and secured on the ship. This term also declares where the responsibility of shipper ends and that of buyer starts. The exporter is bound to deliver the goods at his cost and expense. In this case, the freight and other expenses for outbound traffic are borne by the importer.

-Carriage and Freight, now known in the US as Cost and Freight, (C&F, CFR, CNF): Insurance is payable by the importer, and the exporter pays all expenses incurred in transporting the cargo from its place of origin to the port/airport and ocean freight/air freight to the port/airport of destination. For example, C&F Los Angeles, the exporter pays the ocean shipping/air freight costs to Los Angeles. Most of the governments ask their exporters to trade on these terms to promote their exports worldwide such as India and China. Many of the shipping carriers such as UPS, DHL, FedEx offer guarantees on their delivery times. These are known as GSR guarantees or guaranteed service refunds; if the parcels are not delivered on time, the customer is entitled to a refund.

Freight Transportation

-Carriage, Insurance and Freight, now known in the US as cost, insurance and freight (CIF): Insurance and Freight are all paid by the exporter to the specified location.

For example, at CIF Los Angeles, the exporter pays the ocean shipping/air freight costs to Los Angeles including the insurance of cargo. This also states that responsibility of the shipper ends at the Los Angeles port.

-The term best way generally implies that the shipper will choose the carrier who offers the lowest rate, to the shipper, for the shipment. In some cases, however, other factors, such as better insurance or faster transit time will cause the shipper to choose an option other than the lowest bidder.

-Door-to-door shipping is a service provided by many international shipping companies. The quoted price of this service includes all shipping, handling, import and customs duties, making it a hassle-free option for customers to import goods from one jurisdiction to another. This is compared to standard shipping, the price of which typically includes only the expenses incurred by the shipping company in transferring the object from one place to another. Customs fees, import taxes and other tariffs may contribute substantially to this base price before the item ever arrives.

More information: Science Direct

Freight is usually organized into various shipment categories before it is transported. An item's category is determined by:

-The type of item being carried. For example, a kettle could fit into the category 'household goods'.

-How large the shipment is, in terms of both item size and quantity.

-How long the item for delivery will be in transit.

Shipments are typically categorized as household goods, express, parcel, and freight shipments:

-Household Goods (HHG) include furniture, art and similar items.

-Express: Very small business or personal items like envelopes are considered overnight express or express letter shipments. These shipments are rarely over a few kilograms or pounds and almost always travel in the carrier's own packaging. Express shipments almost always travel some distance by air. An envelope may go coast to coast in the United States overnight or it may take several days, depending on the service options and prices chosen by the shipper.

-Parcel: Larger items like small boxes are considered parcels or ground shipments. These shipments are rarely over 50 kg, with no single piece of the shipment weighing more than about 70 kg. Parcel shipments are always boxed, sometimes in the shipper's packaging and sometimes in carrier-provided packaging. Service levels are again variable but most ground shipments will move about 800 to 1,100 km per day. Depending on the origin of the package, it can travel from coast to coast in the United States in about four days. Parcel shipments rarely travel by air and typically move via road and rail. Parcels represent the majority of Business-to-Consumer (B2C) shipments.

-Freight: Beyond HHG, express, and parcel shipments, movements are termed freight shipments.

More information: Shapiro

MARKETS

The international shipping industry can be divided into four closely related shipping markets, each trading in a different commodity: the freight market, the sale and purchase market, the newbuilding market and the demolition market. 

These four markets are linked by cash flow and push the market traders in the direction they want.

Freight Transportation

The freight market consists of shipowners, charterers and brokers. They use four types of contractual arrangements: the voyage charter, the contract of affreightment, the time charter and the bareboat charter.

Shipowners contract to carry cargo for an agreed price per tonne while the charter market hires out ships for a certain period. A charter is legally agreed upon in a charter-party in which the terms of the deal are clearly set out.

Freight derivatives, which includes Forward Freight Agreements (FFA), container freight swap agreements, container freight derivatives, physical-deliverable freight derivatives, and options based on these, are financial instruments for trading in future levels of freight rates, for dry bulk carriers, tankers and containerships.

These instruments are settled against various freight rate indices published by the Baltic Exchange (for Dry and most Wet contracts), Shanghai Shipping Exchange (International and domestic Dry Bulk, and International Containers), and Platt's (Asian Wet contracts), or physical delivered through Shanghai Shipping Freight Exchange.

More information: The Natural Academies Press

FFAs are often traded over-the-counter, through broker members of the Forward Freight Agreement Brokers Association (FFABA), such as Arrow Futures, Clarkson's Securities, Marex Spectron, SSY -Simpson Spence Young, Braemar Seascope LTD, Freight Investor Services, BGC Partners, GFI Group, ACM Shipping Ltd, BRS, Tradition-Platou and ICAP. However, screen-based trading is becoming more popular, through various screens.

Trades can be given up for clearing by the broker to one of the clearing houses that support such trades, or be executed in integrated electronic exchange. There are five clearing houses for freight: NOS Clearing/NASDAQ OMX, EEX, CME Clearport, ICE Futures Europe and SGX, and one electronic exchange: Shanghai Shipping Freight Exchange.

Freight derivatives are primarily used by shipowners and operators, oil companies, trading companies, and grain houses as tools for managing freight rate risk. Recently, with commodities standing at the forefront of international economics, the large financial trading houses, including banks and hedge funds, have entered the market.

Baltic Dry Index measures the cost for shipping goods such as iron ore and grains. The trading volume of dry freight derivatives, a market estimated to be worth about $200 billion in 2007, grew as those needing ships attempted to contain their risks and investment banks and hedge funds looked to make profits from speculating on price movements. At the close of the 2007 financial year, the number of traded lots on dry FFAs doubled the derived physical product.

Freight Transportation

Shanghai Shipping Freight Exchange is the first electronic shipping freight exchange in the world. It has three lines of businesses, including International Dry Bulk, Domestic Coastal Coal, and International Container.

The container freight derivatives were launched in 2011 and shortly became the most liquid container freight contracts. Based on the success and experience from container freight contracts, SSEFC launched coastal coal contracts in 2012. In 2014, in order to better achieve the risk shifting effect of shipping freight derivatives, SSEFC innovated and launched the world's first physical-deliverable shipping capacity contract.

In the sale and purchase market, second-hand ships are traded between shipowners. The administrative procedures used are roughly the same as in the real-estate business, using a standard contract. Trading ships is an important source of revenue for shipowners, as the prices are very volatile. The second hand value of ships depends on freight rates, age, inflation and expectations.

The newbuilding market deals with transactions between shipowners and shipbuilders. Contract negotiation can be very complex and extend beyond price. They also cover ship specifications, delivery date, stage payments and finance. The prices on the newbuilding market are very volatile and sometimes follow the prices on the sale and purchase market.

On the demolition market, ships are sold for scrap. The transactions happen between shipowners and demolition merchants, often with speculators acting as intermediaries.

More information: UK Essays

CONTAINER LOADING & GOODS

A Full Container Load (FCL) is an ISO standard container that is loaded and unloaded under the risk and account of one shipper and only one consignee.

In practice, it means that the whole container is intended for one consignee. FCL container shipment tends to have lower freight rates than an equivalent weight of cargo in bulk. FCL is intended to designate a container loaded to its allowable maximum weight or volume, but FCL in practice on ocean freight does not always mean a full payload or capacity -many companies will prefer to keep a 'mostly' full container as a single container load to simplify logistics and increase security compared to sharing a container with other goods.

Less-than-Container Load (LCL) is a shipment that is not large enough to fill a standard cargo container. The abbreviation LCL formerly applied to less than (railway) car load for quantities of material from different shippers or for delivery to different destinations carried in a single railway car for efficiency. LCL freight was often sorted and redistributed into different railway cars at intermediate railway terminals en route to the final destination.

LCL is a quantity of cargo less than that required for the application of a carload rate. A quantity of cargo less than that which fills the visible or rated capacity of an inter-modal container. It can also be defined as a consignment of cargo which is inefficient to fill a shipping container. It is grouped with other consignments for the same destination in a container at a container freight station.

After reading all this information about shipping goods, markets and instructions, The Grandma has explained For/Since prepositions and Imperative, the best tense to give instructions.

More information: For/Since-Imperative I & II

Download Verbs & Irregulars Verbs Cards

Every product you have ever loved was a compromise

from the ideal vision of its creators to the realities of shipping on time,

on budget, and on price point.

Anyone who has ever manufactured a physical product

that had to be on the shelves for Christmas shopping

knows how painful these choices can be.

Jay Samit

LOGISTICS, PLANNING & ARRANGING TRANSPORT (V)

The Grandma inside La Torre del Rellotge, Barcelona

Today, The Grandma is still participating in her Logistics course in Sant Boi de Llobregat. It is an interesting course full of information, data and bibliography and she is a little saturated but she knows it is the normal human reaction when you are learning lots of things at the same time.

She has decided to go out to relax and try to applicate her new knowledge to the day-by-day. She has visited the Port of Barcelona and she has paid attention to the Torre del Rellotge, a former lighthouse that also has its own little story: it has the honour of being one of the geodesic points where the scientist Pierre François André Méchain took the measurements he used as the basis of the metric system.

Measuring is an important aspect in Logistics, as important as the necessity of searching standard units to apply around the world. The Grandma is very interested in talking about containers measures.

More information: RMS Queen Mary, Sailing along the recent history

She has been practising with measurements, an important aspect of Logistics. Recorded systems of weights and measures originate in the 3rd or 4th millennium BC. Even the very earliest civilizations needed measurement for purposes of agriculture, construction, and trade. 

Early standard units might only have applied to a single community or small region, with every area developing its own standards for lengths, areas, volumes and masses. Often such systems were closely tied to one field of use, so that volume measures used, for example, for dry grains were unrelated to those for liquids, with neither bearing any particular relationship to units of length used for measuring cloth or land.

With development of manufacturing technologies, and the growing importance of trade between communities and ultimately across the Earth, standardized weights and measures became critical.

The Grandma has remembered the importance of Phi number in our lives, from a simple shell to the solar system.

More information: The Golden Number

Starting in the 18th century, modernized, simplified and uniform systems of weights and measures were developed, with the fundamental units defined by ever more precise methods in the science of metrology. The discovery and application of electricity was one factor motivating the development of standardized internationally applicable units.

Weights and measures have taken a great variety of forms over the course of history, from simple informal expectations in barter transactions to elaborate state and supranational systems that integrate measures of many different kinds.

The Golden Triangle

Weights and measures from the oldest societies can often be inferred at least in part from archaeological specimens, often preserved in museums. The comparison of the dimensions of buildings with the descriptions of contemporary writers is another source of information. An interesting example of this is the comparison of the dimensions of the Greek Parthenon with the description given by Plutarch from which a fairly accurate idea of the size of the Attic foot is obtained.

Because of the comparative volume of artifacts and documentation, we know much more about the state-sanctioned measures of large, advanced societies than we do about those of smaller societies or about the informal measures that often coexisted with official ones throughout history. In some cases, we have only plausible theories and we must sometimes select the interpretation to be given to the evidence.

By studying the evidence given by all available sources, and by correlating the relevant facts, we obtain some idea of the origin and development of the units. We find that they have changed more or less gradually with the passing of time in a complex manner because of a great variety of modifying influences.

It is possible to group official measurement systems for large societies into historical systems that are relatively stable over time, including: the Babylonian system, the Egyptian system, the Phileterian system of the Ptolemaic age, the Olympic system of Greece, the Roman system, the British system, and the metric system.

More information: Canva

Measurement is the assignment of a number to a characteristic of an object or event, which can be compared with other objects or events. The scope and application of measurement are dependent on the context and discipline.

In the natural sciences and engineering, measurements do not apply to nominal properties of objects or events, which is consistent with the guidelines of the International vocabulary of metrology published by the International Bureau of Weights and Measures. However, in other fields such as statistics as well as the social and behavioral sciences, measurements can have multiple levels, which would include nominal, ordinal, interval and ratio scales.

The earliest known uniform systems of weights and measures seem all to have been created at some time in the 4th and 3rd millennia BC among the ancient peoples of Egypt, Mesopotamia and the Indus Valley, and perhaps also Elam (in Iran) as well.

Margot measures the cargo

Early Babylonian and Egyptian records and the Hebrew Bible indicate that length was first measured with the forearm, hand, or finger and that time was measured by the periods of the sun, moon, and other heavenly bodies.

When it was necessary to compare the capacities of containers such as gourds or clay or metal vessels, they were filled with plant seeds which were then counted to measure the volumes.

When means for weighing were invented, seeds and stones served as standards. For instance, the carat, still used as a unit for gems, was derived from the carob seed. 

Measurement is a cornerstone of trade, science, technology, and quantitative research in many disciplines. Historically, many measurement systems existed for the varied fields of human existence to facilitate comparisons in these fields. Often these were achieved by local agreements between trading partners or collaborators.

Since the 18th century, developments progressed towards unifying, widely accepted standards that resulted in the modern International System of Units (SI). This system reduces all physical measurements to a mathematical combination of seven base units. The science of measurement is pursued in the field of metrology.

More information: Transcinco

The measurement of a property may be categorized by the following criteria: type, magnitude, unit, and uncertainty. They enable unambiguous comparisons between measurements.

-The level of measurement is a taxonomy for the methodological character of a comparison. For example, two states of a property may be compared by ratio, difference, or ordinal preference. The type is commonly not explicitly expressed, but implicit in the definition of a measurement procedure.

-The magnitude is the numerical value of the characterization, usually obtained with a suitably chosen measuring instrument.

-A unit assigns a mathematical weighting factor to the magnitude that is derived as a ratio to the property of an artifact used as standard or a natural physical quantity.

-An uncertainty represents the random and systemic errors of the measurement procedure; it indicates a confidence level in the measurement. Errors are evaluated by methodically repeating measurements and considering the accuracy and precision of the measuring instrument.

More information: IContainers

The International System of Units (abbreviated as SI from the French language name Système International d'Unités) is the modern revision of the metric system. It is the world's most widely used system of units, both in everyday commerce and in science.

The SI was developed in 1960 from the metre-kilogram-second (MKS) system, rather than the centimetre-gram-second (CGS) system, which, in turn, had many variants. During its development the SI also introduced several newly named units that were previously not a part of the metric system.

Margot measures the cargo

There are two types of SI units, base units and derived units.

Base units are the simple measurements for time, length, mass, temperature, amount of substance, electric current and light intensity.

Derived units are constructed from the base units, for example, the watt, i.e. the unit for power, is defined from the base units as m2·kg·s−3. Other physical properties may be measured in compound units, such as material density, measured in kg/m3.

ISO 10012:2003, Measurement management systems-Requirements for measurement processes and measuring equipment is the ISO standard that specifies generic requirements and provides guidance for the management of measurement processes and metrological confirmation of measuring equipment used to support and demonstrate compliance with metrological requirements. It specifies quality management requirements of a measurement management system that can be used by an organization performing measurements as part of the overall management system, and to ensure metrological requirements are met.

ISO 10012:2003 is not intended to be used as a requisite for demonstrating conformance with ISO 9001, ISO 14001 or any other standard. Interested parties can agree to use ISO 10012:2003 as an input for satisfying measurement management system requirements in certification activities.

Other standards and guides exist for particular elements affecting measurement results, e.g. details of measurement methods, competence of personnel, and interlaboratory comparisons.

ISO 10012:2003 is not intended as a substitute for, or as an addition to, the requirements of ISO/IEC 17025. 

More information: Bureau International des Poids et Mesures

Finally, The Grandma has reviewed some vocabulary. She has been studying the different kind of transports, the name of measurements in English and their conversion to the different measurement systems.

More information: Metric Conversions

Download Transports Vocabulary Card

Numbers are the product of counting.

Quantities are the product of measurement.

This means that numbers can conceivably be accurate

because there is a discontinuity between each integer and the next.

Gregory Bateson

MODES OF TRANSPORT & HANDLING EQUIPMENT (IV)

Joan prepares the order to be sent by road

Today, The Grandma has continued her Logistic course in Sant Boi. They have been talking about modes of transports and handling equipment. Transport is essential in Logistics. If you want to send something to somewhere you need a good transport and a quick and cheap route.

Since the beginning of the humanity, people have created routes to exchange products, to create commerce, to enjoy tourism or to escape from wars, prosecutions or natural disasters. These last routes are also known as the routes of exile.

The Grandma has been talking about some historical and interesting routes with the examples of the Gypsy community, the Cathars, the Black Madonnas and the Jews in Europe and the Gold Rush Rail Road and The Underground Railroad, The Route of Freedom in the USA.

These historical routes are the same routes that nowadays are used for commercial reasons and where we used GPS today, ancient cultures used maps -The Game of the Goose- or travelled following the stars.

More information: El Camí dels Bons Homes 

Download The Game of The Goose I & II

China is working in a new silk route that, probably, will change the future of transport, commerce and communications.

The Silk Road was a network of trade routes which connected the East and West, and was central to the economic, cultural, political, and religious interactions between these regions from the 2nd century BCE to the 18th century. The Silk Road primarily refers to the land routes connecting East Asia and Southeast Asia with South Asia, Persia, the Arabian Peninsula, East Africa and Southern Europe.

The Silk Road derives its name from the lucrative trade in silk carried out along its length, beginning in the Han dynasty in China (207 BCE–220 CE). The Han dynasty expanded the Central Asian section of the trade routes around 114 BCE through the missions and explorations of the Chinese imperial envoy Zhang Qian, as well as several military conquests. The Chinese took great interest in the security of their trade products, and extended the Great Wall of China to ensure the protection of the trade route.

The Silk Road trade played a significant role in the development of the civilizations of China, Korea, Japan, the Indian subcontinent, Iran, Europe, the Horn of Africa and Arabia, opening long-distance political and economic relations between the civilizations.

Though silk was the major trade item exported from China, many other goods and ideas were exchanged, including religions (especially Buddhism), syncretic philosophies, sciences, and technologies like paper and gunpowder. So in addition to economic trade, the Silk Road was a route for cultural trade among the civilizations along its network. Diseases, most notably plague, also spread along the Silk Road.

In June 2014, UNESCO designated the Chang'an-Tianshan corridor of the Silk Road as a World Heritage Site. The Indian portion is on the tentative site list.

More information: World Economic Forum

The mode of transportation is an important consideration when planning the shipment process. Besides the costs, the urgency of the shipment, the value of the goods being shipped as well as the size and weight of the goods need to be evaluated when determining the form of transportation. In this article, we want to help you determine, which mode is best to transport your cargo and freight!

OCEAN

Seaborne trade accounts for about 90% of the global trade, and as per UNCTAD, 1687 million tons (2015 estimate) were carried in around 177.6 million containers (2015 estimate) covering 998 billion ton-miles (2016 estimate).

Because of size or volume, there are several types of cargoes that cannot be or is economically unviable to move by other modes of transport than the sea.

Ocean freight

Ocean freight is a less expensive method of shipping goods, but the drawback is a longer transit time. Another benefit for ocean freight is while size and weight may be an issue for air; it is not for ocean freight.

Ocean freight is used quite extensively for the movement of bulk commodities such as agri-products (wheat, maize, soya, etc.), coal, iron ore or for wet bulk products such as crude oil and petroleum. Also, larger, odd-shaped items including engines and propellers may move via this mode as well, depending on how sensitive the delivery time is.

Ocean freight is also a preferred mode of transport for the movement of high volume and heavy cargo such as minerals, metals, ores, steel coils, etc. which would be impossible to move by air freight.

Additionally, businesses are placing more of an emphasis on the environmental impact on shipping. An air freight service emits a higher amount of polluting gases with less space capacity compared to sea freight services which are considered a much greener transportation mode with a higher carrying capacity.

Key benefits of ocean freight include:

-Suitable for wide range of products with long lead times

-Large volumes. A single, ultra-large container ship can carry +/-20,000 twenty-foot equivalent units (TEU)

-Most environmental friendly among all modes of transport

-Economical. Liner shipping is the most efficient mode of transport for goods

-Extensive coverage around the world

-Multiple carrier options for the shippers

More information: GS1

AIR

Over the next 15 years, as the world GDP grows, there will be a demand for higher value goods. As per Boeing's 2016-2017 world air cargo forecast, there will be a proportionate growth in the value per ton of total traded goods around the world.

To meet the demand for growth, world air cargo traffic is forecasted to grow an average 4.2 percent per year.

Air freight

Air freight is a critical mode of transport. It serves markets and supply chains that demand speed. 

One of greatest examples goes back to 1997 when Apple began innovating on the nitty-gritty details of supply-chain management. Almost immediately upon Steve Jobs’ return. At the time, most computer manufacturers transported products by sea, a far cheaper option than air freight. Steve Jobs took advantage of the benefit of air freight and used an innovative strategy. He paid $50 million to buy up all the available holiday air freight space to ensure that the company’s new, translucent blue iMacs would be widely available during Christmas season giving them a massive competitive advantage over their rivals. -It was an Oh s- moment, recalls former HP supply chain chief Mike Fawkes.

Other industries such as the automotive and retail industry also utilize air freight to achieve just-in-time (JIT) inventory replenishment. JIT option allows stores, production lines to place order fulfillment based on demand as, and when required. It provides greater flexibility and reduces inventory and storage costs.

Also, perishable goods such as foods, flowers, and some pharmaceuticals also take advantage of shorter transit time. Another positive for air freight is that there's less handling of cargo overall, so the likelihood of damage or theft is less likely when utilizing air.

But air freight also has its own disadvantages such as being one of the most expensive due to the requirement of speed and the fuel that is used.

It also has its size and weight limitations. Regulatory bodies limit what can and cannot be transported by air, and as such, oddly shaped or very large items may be more suitable for other modes of transport.

Key benefits of air freight include:

-Quick transit

-Less handling of cargo

-Less documentation

-Reliable arrival and departures

-Enhanced level of security for your cargo

More information: The Geography of Transport Systems

RAIL

Another mode of transport which is also considered a green option is rail. Trains burn less fuel per ton-mile than road vehicles and a train, which can have as many than 100 wagons, only needs one driver. There are, however, some additional costs which are incurred in a rail journey: at each end of the rail transit, a road delivery will be needed, and there will be a lift cost to transfer the container between the train and the road vehicle.

On average, longer journeys tend to be less expensive by rail, and shorter journeys are less costly by road. Where the point of cost neutrality comes is governed by many factors which are route and commodity specific, but in general, the point of cost neutrality can be expected to lie in the range of 130 to 150 miles.

Rail freight

In 2015, the first freight train carrying ISO freight containers from China arrived in the Port of Rotterdam in 18 days as against the normal 44 odd days by the sea.

This movement of containerized cargo by rail from China to logistics hubs in Europe such as in the Netherlands, UK is seen as a significant step in the development of trade between the two continents. It has encouraged multinationals such as Hewlett-Packard and Ricoh to use the route from Europe to China for their cargoes.

The Manager of European Transport at Ricoh notes that if one can set up an effective planning, rail is a relatively quick mode of transport taking only 20 days to China. In addition, the move by rail also has some advantages such as all containers being transported to the location in one go, while being environmentally friendly as a train releases far less CO2 than a plane.

Key benefits of rail freight include:

-Reliable transit times and schedules

-Railroads are the most efficient form of land transportation. One train can haul the equivalent of over 400 trucks

-Fast and cost-effective deliveries over long distances. Typically over 500 miles

-Traditionally, rail has a strong safety record

-Helps in alleviating road congestion, thus lowering emissions

More information: The Economic Times

ROAD

Road freight is one of the most common of all modes of transportation. It is widely used in continents such as Europe, Africa, and North America. The single customs document process provides a seamless movement of goods even across various states and countries.

Road freight provides several advantages over other modes of transportation such as:

-Cost-effectiveness

-Quick and scheduled delivery

-Local, over border, long or short haul deliveries even in rural areas

-Flexible service

-Saving in Packing Cost compared to other modes

-Track and trace of cargo and truck

-Complete door-to-door service and it is one of the more economical means of transport.

However, truck transport is limited somewhat as to what it can carry by the size of the vehicles used and by size and weight restrictions. Another limitation is that it is affected by weather, road conditions and traffic.

More information: The Geography of Transport Systems

MULTIMODAL

Another option to keep in mind is multimodal solutions -the utilization of more than one mode of transport.

Multimodal is a combination of different modes of transportation such as rail, road, and sea which allows the customer to cost-effectively manage shipments from start-to-end, ensuring optimum care and efficiency every step of the way.

Multimodal

One such example is the cross region rail network combined with truck. 

Providers including DHL, Geodis, UPS and DB Schenker are offering such a solution along China’s Silk Road network.

According to UPS, the service can offer savings of up to 65% versus air freight costs while providing transit times up to 40% faster than standard ocean movements.

Sea-Air is another example of multimodal transport. The service is considered less expensive than air and quicker than ocean service.

An alternate solution to pure air or ocean, Sea-Air provides the global transportation industry time and cost savings along with eco-friendliness.

Sometimes using this mode of transport helps to avoid demurrage fees.

Key benefits of multimodal transport include:

-Cargo can be moved to any part of the world using multiple modes of transport

-Reduces the distance for the goods between the manufacturer and consumer

-Customers can deal with one entity to handle all modes of transport under one document

-Efficient and cost-effective delivery options

More information: Europa

Conclusion. What mode of transportation should you use?

There are numerous options for transporting goods, and there may not be one solution for your transportation needs. Each mode of transport has its advantages and disadvantages. Prioritizing your needs, understanding your shipment and comparing costs is important when planning your shipment and choosing the best mode of transport.

More information: Bizfluent

When you have chosen your best transport, it is time to talk about which type of goods you want to send and which container type you are going to use. 

An intermodal container is a large standardized shipping container, designed and built for intermodal freight transport, meaning these containers can be used across different modes of transport -from ship to rail to truck- without unloading and reloading their cargo. Intermodal containers are primarily used to store and transport materials and products efficiently and securely in the global containerized intermodal freight transport system, but smaller numbers are in regional use as well.

These containers are known under a number of names, such as simply container, cargo or freight container, ISO container, shipping, sea or ocean container, sea van or (Conex) box, sea can or c can.

Intermodal containers exist in many types and a number of standardized sizes, but ninety percent of the global container fleet are so-called dry freight or general purpose containers, durable closed steel boxes, mostly of either 6.1 or 12.2 m standard length. The common heights are 2.6 m and 2.9 m -the latter are known as High Cube or Hi-Cube containers.

More information: Marine Insight & Multiboxx

Just like cardboard boxes and pallets, these containers are a means to bundle cargo and goods into larger, unitized loads, that can be easily handled, moved, and stacked, and that will pack tightly in a ship or yard.

Intermodal containers share a number of key construction features to withstand the stresses of intermodal shipping, to facilitate their handling and to allow stacking, as well as being identifiable through their individual, unique ISO 6346 reporting mark.

In 2012, there were about 20.5 million intermodal containers in the world of varying types to suit different cargoes. Containers have largely supplanted the traditional break bulk cargo -in 2010 containers accounted for 60% of the world's seaborne trade. The predominant alternative methods of transport carry bulk cargo -whether gaseous, liquid or solid- e.g. by bulk carrier or tank ship, tank car or truck. For air freight, the lighter weight IATA-defined unit load device is used.

More information: Port of Antwerp

Finally, The Grandma has explained how to make comparisons and how to avaluate which is the best transport or container using comparative and superlative adjectives.

More information: Comparative & Superlative

When we talk about 'smart transportation,'

it is more than moving cargo from A to B.

Digitization within transport and logistics means seamless

service to our customers, visibility in the supply chain,

and driving a more efficient business.

Soren Skou

LOGISTICS SERVICES, 3PL-THIRD PARTY LOGISTICS (II)

3PL, Third-Party Logistics

Today, The Grandma has continued her Logistics course in Sant Boi.

She has been talking about value-added services and 3PL (Third-Party Logistics), the integrated operations of warehousing and transportation services that can be scaled and customized to customers' needs.

Before talking about 3PL, The Grandma and her partners have revised Numbers and ABC in English, something very essential to work in Logistics with product ranges, calendars and Logistics acronyms. They have also worked how to create nouns from a verb (Gerunds), and prepositions of time.

More information: ABC, Numbers & Logistic Acronyms

More information: Gerunds & Prepositions of Time I & II

Third-party logistics (abbreviated as 3PL, or TPL) in logistics and supply chain management is an organization's use of third-party businesses to outsource elements of its distribution, warehousing, and fulfillment services.

Third-party logistics providers typically specialize in integrated operations of warehousing and transportation services that can be scaled and customized to customers' needs, based on market conditions, to meet the demands and delivery service requirements for their products.

Services often extend beyond logistics to include value-added services related to the production or procurement of goods, such as services that integrate parts of the supply chain. A provider of such integrated services is referenced as a third-party supply chain management provider (3PSCM), or as a supply chain management service provider (SCMSP).

3PL targets particular functions within supply management, such as warehousing, transportation, or raw material provision.

Fabio works under a 3PL system

The global 3PL market reached $75 billion in 2014, and grew to $157 billion in the US; demand growth for 3PL services in the US (7.4% YoY) outpaced the growth of the US economy in 2014. As of 2014, 80 percent of all Fortune 500 companies and 96 percent of Fortune 100 used some form of 3PL services.

Third-party logistics providers include freight forwarders, courier companies, and other companies integrating & offering subcontracted logistics and transportation services.

Hertz and Alfredsson (2003) describe four categories of 3PL providers:

-Standard 3PL Provider: this is the most basic form of a 3PL provider. They would perform activities such as, pick and pack, warehousing, and distribution (business) – the most basic functions of logistics. For a majority of these firms, the 3PL function is not their main activity.

-Service Developer: this type of 3PL provider will offer their customers advanced value-added services such as: tracking and tracing, cross-docking, specific packaging, or providing a unique security system. A solid IT foundation and a focus on economies of scale and scope will enable this type of 3PL provider to perform these types of tasks.

-The Customer Adapter: this type of 3PL provider comes in at the request of the customer and essentially takes over complete control of the company's logistics activities. The 3PL provider improves the logistics dramatically, but does not develop a new service. The customer base for this type of 3PL provider is typically quite small.

-The Customer Developer: this is the highest level that a 3PL provider can attain with respect to its processes and activities. This occurs when the 3PL provider integrates itself with the customer and takes over their entire logistics function. These providers will have few customers, but will perform extensive and detailed tasks for them.

More information: Shopify

 

Outsourcing may involve a subset of an operation's logistics, leaving some products or operating steps untouched because the in-house logistics is able to do the work better or cheaper than an external provider. Another important point is the customer orientation of the 3PL provider. The provider has to fit to the structures and the requirements of the company. This fit is more important than the pure cost savings, like a survey of 3PL providers shows clearly: The customer orientation in form of adaptability to changing customer needs, reliability and the flexibility of third-party logistics provider were mentioned as much more important than pure cost savings.

3PL providers without their own assets are called lead logistics providers. Lead logistics providers have the advantage that they have specialized industry expertise combined with low overhead costs, but lower negotiating power and fewer resources than a third-party provider has based on a normally big company size, a good customer base and established network systems. 3PL providers may sacrifice efficiency by preferring their own assets in order to maximize their own efficiency. Lead logistics providers may also be less bureaucratic with shorter decision-making cycles due to the smaller size of the company.

Pyramid of Actors & Services in Logistics

First party logistics providers (1PL) are single service providers in a specific geographic area that specialize in certain goods or shipping methods.

Examples are: carrying companies, port operators, depot companies. The logistics department of a producing firm can also be a first party logistics provider if they have own transport assets and warehouses.

Second-party logistics providers (2PL) are service providers which provide their specialized logistics services in a larger (national) geographical area than the 1PL do. Often there are frame contracts between the 2PL and the customer, which regulate the conditions for the transport duties that are mostly placed short term.

2PLs provide own and external logistics resources like trucks, forklifts, warehouses etc. for transport, handling of cargo or warehouse management activities. Second-party logistics arose in the course of the globalization and the uprising trend of lean management when the companies began to outsource their logistics activities to focus on their own core companies. Examples are courier, express and parcel services; ocean carriers, freight forwarders and transshipment providers.

The most significant difference between a second party logistics provider and a third-party logistics provider is the fact that a 3PL provider is always integrated into the customer's system. The 2PL is not integrated; in contrast to the 3PL, it is only an outsourced logistics provider with no system integration. A 2PL works often on call (e.g. express parcel services) whereas a 3PL is almost every time informed about the workload of the near future.

More information: Generix Group

As technology progresses, the methodology for notifying a 3PL of inbound workload usually falls on API integrations that connect, for example, an E-commerce store with a fulfilment center. Another point that differs 2 and 3PL is the specification and customizing of services. A 2PL normally only provides standardized services, whereas 3PLs often provide services that are customized and specialized to the needs of their customer. This is possible due to long term contracts that are usual in the third-party logistics market.

Cost-effectiveness of a third-party logistics provider is only given over long periods of time with stable contract and profits. In contrast to that second party logistics services can’t be customized, concerning to the fluctuating market with hard competition and a price battle on a low level. And there we have another distinguishing point between 2PL and 3PL: Durability of contracts. 3PL contracts are long term contracts, whereas 2PL contracts are of low durability so that the customer is flexible in responding to market and price changes.

With companies operating globally, the need to increase supply chain visibility and reduce risk, improve velocity and reduce costs -all at the same time- requires a common technological solution. Non-asset based providers perform functions such as consultation on packaging and transportation, freight quoting, financial settlement, auditing, tracking, customer service and issue resolution. 

3PL Providers

However, they do not employ any truck drivers or warehouse personnel, and they don’t own any physical freight distribution assets of their own –no trucks, no storage trailers, no pallets, and no warehousing.

A non-assets based provider consists of a team of domain experts with accumulated freight industry expertise and information technology assets. They fill a role similar to freight agents or brokers but maintain a significantly greater degree of hands-on involvement in the transportation of products. These providers are 4PL and 5PL services.

A fourth party logistics (4PL) provider has no owned transport assets or warehouse capacity. They have an allocative and integration function within a supply chain with the aim of increasing the efficiency of it. The idea of a fourth-party logistics provider was born in the seventies by the consulting company Accenture. Firms are outsourcing their selection of third-party logistics provider and the optimization process of the integration of these to a PL as an intermediary. That reduces costs and the 4PL have to have an overview of the whole logistics market to choose the ideal 3PL for all operative logistic activities.

For being able to provide such an ideal solution fourth-party logistics providers need a good knowledge of the logistics branch and a good IT infrastructure. A fourth party logistics provider selects the 3PL providers from the market which are most suitable for the logistical issues of their customer. Unlike the allocative function of a 4PL in the supply chain, the core competence of a 3PL provider is the operative logistics.

More information: Cerasis

Fifth party logistics providers (5PL) provide supply chain management and offer system-oriented consulting and supply chain management services to their customers. Advancements in technology and the associated increases in supply chain visibility and inter-company communications have given rise to a relatively new model for third-party logistics operations –the non-asset based logistics provider.

On-demand transportation is a relatively new term coined by 3PL providers to describe their brokerage, ad-hoc, and flyer service offerings. On-demand transportation has become a mandatory capability for today's successful 3PL providers in offering client specific solutions to supply chain needs.

These shipments do not usually move under the lowest rate wins scenario and can be very profitable to the 3PL that wins the business. The cost quoted to customers for on-demand services are based on specific circumstances and availability and can differ greatly from normal published rates.

On-demand transportation is a niche that continues to grow and evolve within the 3PL industry.

More information: Trade Gecko

Specific modes of transport that may be subject to the on-demand model include (but are not limited to) the following:

-FTL, or Full Truck Load

-LTL, or Less-than Truckload

-Hotshot (direct, exclusive courier)

-Next Flight Out, sometimes also referred to as Best Flight Out (commercial airline shipping)

-Expedited services: (direct, exclusive courier) Immediate delivery or just-in-time (JIT)

-International Expedited

Exhausting calendar

New brokers tend to use what has become known as smile and dial brokering that essentially work as telemarketing call centers. Brokers have no obligation to successfully ship all loads (as opposed to contract logistics providers) and almost all sales representatives are heavily (and 100%) commissioned, and much of the workers' day is spent cold-calling sales leads.

Smile-and-dial brokerages typically require a 15% gross profit margin (the difference between what the shipper pays the brokerage and what the brokerage pays the carrier), and the commission compensation scheme means that the turnover of personnel in the call centers approaches 100% per year.

For the occasional shipper, smile-and-dial brokerages can provide a convenient way to have goods shipped. But the lack of deep expertise due to constant turnover, combined with the 15% pricing margins, mean that a reasonably capable traffic professional can obtain transportation services much more economically and reliably, while a shipper needing delivery as soon as possible, from air freight, air charter, ground expedited, flatbed services, refrigerated, LTL or full truckload, liftgate, van or vehicle. With JIT delivery the price will be secondary to on-demand as soon as possible delivery.

ADVANTAGES

Cost and time savings

Logistics is the core competence of third-party logistics providers. Providers may have better related knowledge and greater expertise than the producing or selling company, and may also have more global networks enabling greater time and cost efficiencies.

The equipment and the IT systems of 3PL providers are constantly updated and adapted to match the requirements of their customers and their customer’s suppliers. Producing or selling companies often do not have the time, resources, or expertise to adapt their equipment and systems as quickly.
Low capital commitment

If most or all operative functions are outsourced to a 3PL provider, there is usually no need for the client to own its own warehouse or transport facilities, lowering the amount of capital required for the client's business. This is particularly beneficial if a company's warehouse has high variations in capacity utilization, leading to overpurchasing of warehouse capacity and reducing profitability.
Focus

Logistics outsourcing allows companies with limited logistics expertise to focus on their core business. Increasing complexity in business suggests that companies benefit from not devoting resources to areas in which they are not skilled.
Flexibility

Third-party logistics providers can provide higher flexibility for geographic distribution and may offer a larger variety of services than clients could provide for themselves. Postal services and private couriers typically factor in distance when they calculate the cost of shipping; many 3PL providers market the benefit of what is known as zone skipping to potential clients, because it shortens the distance between products to be shipped and customers, resulting in lower shipping costs. This also allows businesses to more predictably manage their resources including workforce size, and turn fixed costs into variable costs.

More information: Handshake

DISAVANTAGES

Loss of control

One disadvantage is the loss of control a client has by using third-party logistics. With outbound logistics, the 3PL provider usually assumes communication and interactions with a firm's customer or supplier. To mitigate this, some 3PL’s attempt to brand themselves as their clients, such as applying clients' logos on their assets and dressing their employees like their clients' employees.

IT

The IT systems of the provider and the client must be interoperable. Technology helps increase visibility for the client by way of continuous status updates via Dispatch Management Software and Electronic Data Interchange (EDI) which does involve a cost, but it can help avoid penalties for delays and subsequent financial losses such as from not unloading freight in time.

Reverse logistics

Numerous studies have shown that selling products online, rather than in a brick and retail environment, adds extra costs when it comes to handling returns (i.e, reverse logistics).

The reliance upon third-party logistics providers to handle aspects of the E-commerce supply chain such as warehousing and pick-and-pack also means these companies must be relied on to handle reverse logistics.

Artificially induced demand events such as Black Friday in the United States or Singles' Day in China come with an influx of returned products, which can slow down warehouse operations and in turn delay the issuing of refunds or other methods for mitigating dissatisfied customers. The additional layer of a third party to handle sensitive customer-facing issues such as returns is thus a heavily-debated topic within the realm of E-commerce.

More information: Ship My Orders

After talking about 3PL, The Grandma has explained the importance of nouns to discover the origin of things, people and places. Every noun hides a story and if we are able to discover it, we will understand better this name and its meaning. She has also talked about surnames and History explaining the story of Salvador de Samà i Torrents, Marquis of Samà, Marianao and Vilanova i la Geltrú, an illustrious man whose lands in Sant Boi are now a popular neighbourhood.

More information: Forebears & BBC I & II

More information: Palau Marianao, From Cuba to Sant Boi

From a logistical standpoint, I learned about when to peak,

when to push, when to recover throughout the season.

Nathan Chen