Chapter 3: Intern. Land Transportation Flashcards
How large is the European Transport Market in total (2014)?
What is the size of the German Transport Market (2014)?
- The logistics market for European transport is approx. 960 bill. €
- The logistics market for Germany is approx. 235 bill. €
What were the three largest logistics (transport) marketsegmentss in Europe in 2014?
- Contract logistics (394 bill. € or 41%)
- Warehousing and Terminal (106 bill. € or 11%)
- Ocean Cargo (86 bill. € or 9%)
In which transport market segments are the tendency for outsourcing the transport service to LSPs high, in which low? Reason your answers!
From the perspective of an industrial company, outsourcing of transport is mainly driven by cost advantages and the possibility to focus on core competencies.
- A high degree of outsourcing exists in market segments with high fixed costs investments for the transport infrastructure and at the same time small shipment sizes in relation to the full capacity of the transport mean
→ Ocean Cargo, CEP, Groupage, Air Freight - A low degree of outsourcing exists in market segments with complex value-adding logistics activities which need specialized knowledge, long-term business risks and/or limited resources
→ Contract Logistics or warehousing/terminal services
What are the three largest Logistics Service Providers in the world (2014)?
The three main LSPs worldwide were 2014:
- Deutsche Post DHL
- UPS
- FedEx
What are the main goals of the European transport concept of the EU commission?
The main goals are:
- Truck Transport: total liberalization of truck transport in entire Europe, no cabotage restrictions any more
- Train Transport: liberalization of train transport and investment in high-speed networks; improvement of multimodal transport
- Inland Waterway: Enlargement of existing infrastructure, adoption to the technical standard
- Deep Sea Shipping: Improvement of security, installation of a European register of shipping and a common European flag
- Air Cargo: liberalization of restrictions and usage of capacities
For what stands the abbreviation TEN-T in the context of the development of the European infrastructure?
TEN-T = Trans European Transport Network
What are the structural problems of the transport networks in Europe?
The core problems are:
- the transport network all over Europe is fragmentized
- there are more relations from North to South than East to West; E-W relations would be more important for goods flow across European states
- the road-/rail-connections have different technical standards and/or have different quality conditions. This reduces the reliability and interoperability of the different transport modes
What is the problem resulting out of the strong correlation between the economic growth of a country and the corresponding road freight output?
This strong correlation reduces the potential of an economy to grow. Today, in the most developed countries the capacity of traffic infrastructure reached its limit already.
Therefore, the decoupling of the economic growth on one side and the efficiency of existing traffic systems on the other side is an important prerequisite for social welfare and economic power in the future.
The cost structure in the European road freight transport depends very much on the volatility of fuel markets.
Do you know a tool/concept how LSPs are able to prevent themselves against this fuel price volatility? Explain the concept in brief!
The tool/concept is the so-called “Diesel Floater”.
The “Diesel Floater” is an upper price limit for the diesel price on the market fixed in the forwarding/carrier contract between the shipper and the LSP.
If the diesel price gets over the contracted level, the LSP is allowed to increase his transport tariffs accordingly.
Road freight (labor) in Europe is highly regulated. We discussed in this context the concept of ‘cabotage’.
What is cabotage and why are cabotage-rules important for the successful business of international Logistics Service Providers?
Cabotage is the ability of LSPs from outside one country to collect freight and deliver it within that country. In European road-freight transports, the cabotage is limited to a maximum of carrying three loads in seven days. After that, the LSP has to return to the home country.
The problem of cabotage is its impact on the competition and price building. Cabotage rules are protecting the home market (local LSPs) and reduce the possibility of foreign freight forwarders to gain backloads.
Explain the concept of the TIR - Carnet Customs Procedure!
For which context is the Carnet-TIR applicable?
- The Carnet-TIR transit procedure allows the export/import of third party commodities out/in (of) the EU using an easy, standardized customs clearance. This speeds up the import/export procedures enormously.
- Carnet-TIR is applicable only:
- for transport between EU and other “TIR”-countries (27 countries)
- if vehicles are marked at front and rear with “TIR”
- if the loading units can be sealed by the customs officials
- The Carnet, valid 60 days, is published by the IRU (International Road Union) and the BGL in Germany.
- For every single truck, trailer, and container a Carnet-TIR voucher is needed
- The customs office at the EU border regularly only checks the TIR carnet and the customs seals.
For which concept stands the abbreviation TERF-N?
TERF-N = Trans European Rail Freight Network
What is the difference between ‘Carrier Haulage’ and ‘Merchant Haulage’ in the container transport?
Carrier haulage
- Often shipping lines have the responsibility for carrying the goods into the hinterland (‘line-haul’).
- These costs are high in comparison with ocean movements over much longer distances.
- It is not unusual for shipping lines to have a stake in seaport terminals, which enables the lines to optimize the end-to-end supply chain.
- In addition, shipping lines have also taken stakes in inland terminals.
Merchant haulage
- In this case, it is the shippers, forwarders or LSPs that are responsible for carrying the goods (and restitution of empty containers) from the seaport terminal to the customer based in the hinterland (‘merch haul’).
- This is traditionally associated with forwarders who have specialized knowledge in intercontinental trade along with customs and administration skills.
We discussed the transport concept of “China Landbridge”.
What is the idea behind the concept?
For which products would you use the “China Landbridge!? Why?
The term ‘China Landbridge’ stands for the concept of a land-based container transport on rail from Asia to Europe. It’s one important part of the revitalized idea of the “New Silk Road” promoted intensively by the Chinese government.
The container transport by ‘China Landbridge’ is still more expansive than a conventional transport by sea. Therefore, the transported freight by ‘China Landbridge’ consists of time-sensitive products with a high value-to-weight-ratio. Examples are computer parts or finished laptops.
What are restrictions in realizing the ‘China Landbridge’ concept?
Technical restrictions:
- Different power supply in different countries – the changing of trains
- Different gauges and track geometries
- Restrictions in train length: 700 m in Europe, 1.000 m in Russia
- General infrastructural deficits in Russia and Mongolia
Administrative restrictions:
- Different administrative times and costs in crossing the borders
