Operational Characteristics of Selected Road Market Segments

Question 1

What are the organization and main steps in the process of groupage transports?

Answer 1

Consolidation - Groupage depot - Terminal Break bulk - Distribution

Loading - Prehaul transport - Handling - Main haul transport - Handling - Post Haul - handling

Documents in groupage transports
1. Forwarding order form - order basis of the forwarder 5copies or sheets

2. Collection order - document needed from GA to the driver of pre-haul transport
3. Bordero - all orders of the Groupage forwarder which have to be shipped in long-haul transport. contains more specific information about shippers and consignees
4. Loading list: same with bordero except that it does not contain names of consignees
5. Consignment note: from GA to the carrier of long-haul transport
6. Unloading list: produced by BBA, documentation of correct unloading of goods
7. Delivery Run-sheet: for the drivers of subsequent transports, contains all relevant consignee data.

Order flow or steps in groupage transports:

1. Forwarding contract - consists of 5 sheets
2. Pick up order by GA for the driver
3. Contract of carriage and loading list for carrier
4. Production and transfer of Bordero
5. Pre-haul transport by GA or Co-loader
6. Consolidated transport by long-haul carrier
7. Subsequent transport to the final consignee by the breakbulk agent, receiving agent or sub-contractors

Question 2

Put yourself in the shoes of a forwarding agent of an LTL-network. What are the critical factors you would plan/observe intensively to make sure your network is operating well?

Answer 2

1. Motivation & Productivity of breakbulk and P&D personnel
2. Tracking and tracing technology
3. Time coordination
4. Network density in order to ensure consolidation

Question 3

If you would be responsible for the operation of an LTL depot – on which fields of improvement would you focus your efforts? Why?

Answer 3

Hub & Spoke System

1. Increasing capacity; buying vehicles, more depots, more drivers in order to be more efficient, effective, and flexible
2. Strategic alliances; partnering or cooperating with other industry players in order to gain more delivery access
3. Higher degree of automation for the purpose of tracking and tracing
4. Effective time management

Question 4

Why is the market segment of CEP one of the best examples of an “industrialized” logistics service?

Answer 4

Due to;
1. High degree of outsourcing

2. High degree of standardization
3. High degree of automation
4. Depots are highly mechanized
5. High investments of depot and infrastructure

Question 5

How would you measure productivity along the OTP-Process of a CEP provider? What could be KPIs for:
- Order entry?, 
Pick up?, 
Sorting?, 
Delivery?

Answer 5

1. Order received or order fulfilled per day
2. . Parcels delivered per day
3. Successful delivery per day
4. Order fill rate per day
5. Profit turnover rate per day

Question 6

Why is the business of FTL Transportation also often called “tramp traffic”?

Answer 6

In a tramp, the FTL is always looking for the next load. It deals with transporting goods and products between random ports without a fixed or regular schedule. The idea is to maximize the capacity efficiency

Question 7

What would you do to get a higher degree of “industrialization” in your FTL-business regarding:

• acquisition of new orders?
• increasing the chance of backloads?
• reduce operational costs?

Answer 7

1. Acquisition of new orders?
   - Strategic alliances; collaboration or cooperation in order to increase the chances of getting loads or orders
2. Increasing the chance of backloads
   - using software like TIMOCOM
   - high degree of predictability - regularity, consistent
3. Reduce operational costs
   - using telematic systems like fleetboard in order to improve the communication between the truck driver and the shipper
   - high degree of standardization; offering your customers standardized services
   - Maximization of truck vehicle utilization; like ability to decouple and use it for other purposes

Question 8

What are in your opinion prerequisites to reach that next level of “industrialization

Answer 8

• High degree of standardization

- High degree of automation

Question 9

What are the pros and cons of Hub & Spoke networks

Answer 9

Pros

1. Realization of EOS by the possibility to offer a higher service frequency with consolidated transports
2. Realization of EOS in the Hubs because of high consolidated shipment volume
3. Realization of economies of scope because of a high degree of equipment utilization

Cons

1. Time sensitivity of the whole system against interruptions of the standardized process
2. High fixed cost level
3. Additional transport movements because of fixed standard operational procedures with interrelated connections

Question 10

a. Which of the displayed logistics market segments do have a high/low degree of outsourcing?
b. What do these segments have in common?
c. In which segments would you invest? Why? What could be risks?

Answer 10

a. High degree of outsourcing - CEP, LTL/Groupage, Sea transport, Air Cargo
Low degree of outsourcing - Consumer and industrial Contract Logistics

b. CEP, LTL/Groupage, Sea transport, Air Cargo = Network-based, fixed costs intensive, high dependency on more volume- economies of scale
Contract Logistics = Service, knowledge, and competency-driven

c. There is no right or wrong answer - arguments based

In my opinion, it is best to invest in contract logistics because it is not cost-intensive and saturated compared to other segments. There is a low barrier for market entry, not dependent on EOS or high volume

Risks involved - longterm contract of 3-5 years - lock-in situation

• high risks in the calculation
• high level of competency required