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A Review of Transporaton by Sea Air Land and RailResearch Paper

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Transportation and the Supply Chain

Technology and globalization have had an enormous impact on the shipping and supply chain dynamics. The transportation industry is highly competitive as air, land, maritime, and rail companies battle for positioning. Which kind of transportation is the best when it comes to moving products around the globe?

There are issues that transcend what is the best method of transportation for a global enterprise, and at the top of the list is the impact on the planet vis-a-vis climate change. Companies and vendors and shipping interests are more and more being asked to -- and expected to -- limit their carbon footprint. Costs of doing business along with the demands of companies to receive products and merchandize in a timely manner both play into the big picture for transporters and the supply chains they serve throughout the world.

Introduction

This paper examines the benefits and drawbacks of each of the four principle forms of transportation -- air, land, rail and maritime. It also reviews the literature that reports on the how the logistics within each transportation method relates to the supply chain that is vitally important to a company manufacturing goods that are to be sold on a global basis. Of course international and domestic companies are always seeking the best service with the lowest cost, and when there is the possibility of increased profit through lower cost transportation services, any corporate manager worth his or her salt will do the research necessary to find those lower cost services.

Literature Review -- Industry Subsectors

When there is a "highly integrated supply chain network," like there is in the United States, all four forms of transportation may well become involved in delivering goods and materials (U.S. Department of Commerce) (USCD). Ensuring a coordinated series of movements is absolutely vital for a company for both inbound and outbound transportation management; what comes into play is "fleet management, warehousing, materials handling, order fulfillment, logistics network design, inventory management, supply and demand planning," along with quality logistics management by a third party and additional support services (USDC).

Clearly it is not just a simple matter of what logistics a company must prepare for and manage; it is a multi-level series of planning for the movement and receipt of goods. It requires good timing, smart managers, accurate projections and reliable suppliers that understand the importance of supply chain dynamics.

Literature Review -- Air Transport

The U.S. Department of Commerce references the value of express delivery services (EDS), which often include air freight services. Small parcels, documents and "time-sensitive" high value articles move quickly and efficiently through EDS; moreover, many smaller and medium-sized exporters that can't come up with the finances to operate their own supply chains benefit greatly through express delivery services (USDC).

A new form of air transportation -- derived and evolved from an old form or air transportation -- is about to enter the air cargo industry. It is an airship, formerly called a blimp or a zeppelin, and it is being produced as a way to move materials through the air less expensively than a big Airbus or Boeing 757. It is called an "Aeroscraft" and according to Igor Pasternak (interviewed by Patrick Burnson, Executive Editor of Logistics Management), the Aeroscraft will "accommodate shipping containers and cargo on pallets" (Burnson, 2016). The Aeroscraft's cargo bay will measure (LWH) 220' x 40' x 30' on the smaller 66-ton aircraft; that is much larger than the available loading space on a "fixed-wing fuselage" (Burnson, p. 2).

By using helium in order to stay in the air (utilizing "static lift"), these aircraft will reportedly use "less than one-third" of the fuel required by huge jet aircraft. Moreover, they will "empower" several industries: a) traditional energy; b) alternative energy; c) project engineering; d) mining; e) agriculture; f) manufacturing and "other global industries" (Burnson, p. 2). These airships will empower those entities because the "unique logistic challenges for speciality cargo" will be greatly reduced, Pasternak explains.

There are other advantages of moving cargo in an Aeroscraft; it will have enormous flexibility in terms of landing; it will be faster than ground transportation; it will help companies "overcome seasonal limitations" (for example, when icy conditions keep trucks off the road, the Aeroscraft can land safely, ice or dry land); and the Aeroscraft will reduce "on-site final assembly" and will retain "warrantee" (Burnson, p.2). In addition, the Aeroscraft will be able to serve ocean cargo carriers through its ability to move big containers directly to ports -- from remote places where there are no roads or rails -- and the Aeroscraft will be pivotal for use in developing nations where "major infrastructure investments" (i.e., international airports) are not yet developed (Burnson, p. 3).

Another article by Patrick Burnson points out that traditional air cargo services are gaining on ocean freight in terms of shippers' confidence. The latest edition of the Stifel Logistics Confidence Index shows that the total confidence index for air freight rose "0.5 points in March, 2016, raising its confidence rating to 48.6 (Burnson, 2016). Compared with sea freight, which declined by 1.0 point, ending up at 45.3 points, companies are showing more confidence in air freight than maritime services, Burnson explained.

Literature Review -- Maritime / Sea Transport

Adam Mohd Saifudin asked, "How prominent and how important is the maritime supply chain when it comes to logistics and the operations surrounding supply chains?" S.G. Deshmukh from the Indian Institute of Technology in Delhi replied that new opportunities and challenges are offered through maritime supply chains. There is the "material flow," the "information flow," and the "money flow," Deshmukh explains. When it comes to maritime supply chain dynamics, they require dependable support from sources of "fuel and spare parts," and the biggest challenge is "speed and response time" (researchgate.net).

Jesus Ezequiel Martinez Marin (with the Fundacio TencoCampus Matero-Maresme firm) asserts that "more than 90%" of the merchandise in the world moves on the high seas, hence, the logistics related to port facilities is among the highest of priorities in the global supply chain. "With the rise of the container" format for shipping on water, the supply chain is extended well beyond the port (even from door to door) and moreover maritime shipping is "the cheapest" if not the fastest method, Marin explained (researchgate.net).

Lay Leng TAN writes that because of globalizations -- and it is "here to stay" -- businesses in the transportation and logistics industries should embrace a "holistic view to stay competitive" (TAN, 2006). The writer supports the notion that maritime logistics comprise, "in a holistic approach," the following: a) liner shipping network optimization"; b) terminal management and optimization; c) warehousing management and optimization; and d) implementation of communication and information technologies (TAN, 50-51).

Why do Rotterdam and Singapore rank as the top ports in the world year after year? TAN explains that the Singapore Maritime and Port Authority (MPA) follow a holistic path because MPA invests money to local universities to "offer courses pertaining to the industry" and provides scholarships for students to engage in research and development vis-a-vis maritime supply chains and transportation that link supplier with consumer (TAN, 51).

Professor H.E. Haralambides of Erasmus University (Rotterdam's Center for Maritime Economics and Logistics), a logistics expert, believes that: a) air transportation is " ... limited to high value-added goods" and materials with "short lifecycle and perishables"; b) rail is a good mode of transport but it " ... involves public infrastructure and investment" and serves the public and the economy (but doesn't depend on profitability); and c) road transport is also an alternative to rail but has its limitations in a global economic context (TAN, 51).

Literature Review -- Rail Transport

While professor Haralambides seems to downplay the importance of rail transport as it relates to the supply chain, according to Trade Corridors, in the United States rail is a " ... critical part of the supply chain" since rail is in a unique position to "move a large volume of goods efficiently"; in fact rail transportation is "three times more fuel efficient than trucks" and is "less costly to build" (Trade Corridors).

Rail is an "ideal solution for economic development," including jobs and economic growth; and rail takes trucks "off the road, decreasing emissions, improving safety, and making U.S. communities more livable" (Trade Corridors). When the rail advocates say rail transportation has " ... little or no impact on the communities and consumers served," some would argue that rail transportation carrying dangerous cargoes can and does have negative impacts on communities and consumers.

In fact four trains carrying crude oil derailed in the U.S. and Canada in the first two months of 2015 (Lowy, 2015). Sarah Feinberg, acting administrator of the Federal Railroad Administration, said that recent incidents prove that "... derailments of trains carrying this product are dangerous and can be catastrophic" (Lowy, p. 1). A 109-car oil train ran off the tracks and caught fire near Mount Carbon, West Virginia in 2015; it leaked oil into… [END OF PREVIEW]

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