Transportation Management Systems

Transportation management involves a wide variety of planning, execution, and administrative responsibilities. Firms are increasingly adopting Transportation Management Systems (TMS) as an integral part of their information technology strategy. The generalized functionality of a TMS can be described in terms of several capabilities.

Operational Management

From an operational perspective, key elements of a TMS are equipment scheduling and yard management, load planning, routing and advanced shipment notification (ASN), and movement administration.

Load Planning

How loads are planned directly impacts transportation efficiency. In the case of trucks, capacity is limited in terms of weight and cube. Planning the load sequence of a trailer must consider product physical characteristics and the size of individual shipments, as well as delivery sequence if multiple shipments are loaded on a single trailer.

Movement Administration

Traffic managers have the basic responsibility of administering the performance of for-hire and private transportation. Effective administration requires continuous carrier performance measurement and evaluation. The advent of information connectivity has significantly improved shipment reliability. The fact that most shippers have reduced the size of their carrier base has greatly simplified administration. Effective administration requires carrier selection, integration, and evaluation.

Consolidation

At several different points throughout this text the importance of freight consolidation is discussed. The fact that freight costs are directly related to size of shipment and length of haul places a premium upon freight consolidation. In terms made famous by the late President Truman, the buck stops here, meaning traffic management is the business function responsible for achieving freight consolidation. From an operational viewpoint, freight consolidation techniques are grouped as reactive and proactive. Each type of consolidation is important to achieving transportation efficiency.

Negotiation

For any given shipment, it is the responsibility of the traffic department to obtain the lowest possible rate consistent with service required. The prevailing tariff represents the starting point in transportation negotiation. The key to effective negotiation is to seek win-win agreements wherein both carriers and shippers share productivity gains.

Control

Other important responsibilities under the control of transportation management are tracing, expediting, and driver hours administration. Tracing is a procedure to locate lost or late shipments. Shipments committed across a transportation network are bound to be misplaced or delayed from time to time. Most large carriers maintain online tracing to aid shippers in locating a shipment.

Auditing and Claim Administration

When transportation service or charges are not performed as promised, shippers can make claims for restitution. Claims are typically classified as loss and damage or overcharge/undercharge. Loss and damage claims occur when a shipper demands the carrier pay for partial or total financial loss resulting from poor performance.

Knowledge of INCOTERM

EXW – Ex Works

The buyer arranges the pickup of the freight from the supplier's designated ship site, owns the in-transit freight, and is responsible for clearing the goods through Customs. The buyer is responsible for completing all the export documentation. Cost of goods sold transfers from the seller to the buyer.

FCA - Free Carrier

The seller delivers goods to a named airport, terminal, or other place where the carrier operates. Costs for transportation and risk of loss transfer to the buyer after delivery to the carrier. When used in trade terms, the word "free" means the seller has an obligation to deliver goods to a named place for transfer to a carrier. The risk of loss shifts from the seller to the buyer, and who pays the costs of freight and insurance.

 CPT – Carriage Paid To

The seller pays for carriage. Risk transfers to buyer upon handing goods over to the first carrier at place of shipment in the country of Export. Buyer fully responsible for arranging carrier payment of freight for same Export clearance in country of export and Import clearance in country of import. Not responsible for buying Insurance.

CIP – Carriage and Insurance Paid To 

The containerized transport/multimodal equivalent of CIF. Seller pays for carriage and insurance to the named destination point, but risk passes when the goods are handed over to the first carrier. CIP is used for intermodal deliveries & CIF is used for Sea Mode.

DAT – Delivered at Terminal

This term means that the seller covers all the costs of transport (export fees, carriage, insurance, and destination port charges) and assumes all risk until after the goods are import duty/taxes/customs costs.

DAP – Delivered at Place

Can be used for any transport mode, or where there is more than one transport mode. The seller is responsible for arranging carriage and for delivering the goods, ready for unloading from the arriving conveyance, at the named place. Duties are not paid by the seller.

DDP – Delivered Duty Paid

Seller is responsible for delivering the goods to the named place in the country of the buyer, and pays all costs in bringing the goods to the destination including import duties and taxes. The seller is not responsible for unloading. With the delivery at the named place of destination all the risks and responsibilities are transferred to the buyer and it is considered that the seller has completed his obligations

FAS – Free Alongside Ship

The seller delivers when the goods are placed alongside the buyer's vessel at the named port of shipment. This means that the buyer has to bear all costs and risks of loss of or damage to the goods from that moment. The FAS term requires the seller to clear the goods for export, which is a reversal from previous Incoterms versions that required the buyer to arrange for export clearance. This term can be used only for sea or inland waterway transport.

FOB – Free on Board

The seller must advance government tax in the country of origin as off commitment to load the goods on board a vessel designated by the buyer. Cost and risk are divided when the goods are actually on board of the vessel. The seller must clear the goods for export. The seller must instruct the buyer the details of the vessel and the port where the goods are to be loaded.

CFR – Cost and Freight

Seller must pay the costs and freight to bring the goods to the port of destination. However, risk is transferred to the buyer once the goods are loaded on the vessel. Insurance for the goods is NOT included. This term is formerly known as CNF(C&F, or C+F).

CIF – Cost, Insurance and Freight

Exactly the same as CFR except that the seller must in addition procure and pay for the insurance.

Terminal of Wallenius Wilhelmsen Logistics

Wallenius Wilhelmsen Logistics is company logistics that making business delivers innovative, sustainable global shipping and logistics solutions for manufacturers of cars, trucks, heavy equipment and specialized cargo. The company also specialized in handling complex project cargoes such as rail cars, power generators, mining equipment and yachts. WWL's advance supply chain management services ensure an efficient integration of ocean transportation, inland distribution, terminal handling and a large comprehensive range of specialized technical services. In terminal handling the company provide a variety service for customer such as terminal design expertise, wide range of terminal service, keeping track of customer cargo, and the terminal can reduce time and money.

Terminal designs expertise.

To ensure control over vital processes, WWL operates its own terminals at strategic locations throughout Europe, the United States and Asia. These terminals have been designed by our own logistics experts to provide flexibility in the processing, handling and storage of cargo as well as convenient links to road, rail and short-sea feeder connections.

Widely range of terminal services.

Customers can take advantage of a wide range of terminal services, which help optimized the movement of cargo through the port to its final destination. Depending on the terminal, these services can include customs clearance, pre-delivery inspection, storage, re-forwarding and inland transport. Some terminals also have vehicle processing centered that offer additional services such as upgrades, body and paint repair and accessory installation.

Track of customer cargo.

Communication and information systems within the terminals are linked to WWL’s customized information technology solutions. This means that we know the exact location of cargo while at our terminals or on board any of our vessels. This knowledge empowers customers with complete control of their cargo.

Reduce time and money.

By simplifying and reducing administration and handling costs, WWL helps customers save time, energy and money. We also focus on our customers’ changing needs and continually provide creative new services to add flexibility, reliability and efficiency to their businesses.

Pros and Cons of Information Technology

The information systems have significantly transformed the way business is conducted. In today’s society it would be pretty difficult to find an organization that does not use some form of technology, automation or information system to help run its operational and daily transaction processes. Most common types of information systems used in business organization are electronic and mobile commerce system and decision support system. Information systems are so important for business today because of its operational excellence, new product, services and business models.

The first advantage of information technology is about globalization, it has not only brought the world closer together, but it has allowed the world’s economy to become a single interdependent system. This means that we can not only share information quickly and efficiently but we can also bring down barrier of linguistic and geographic boundaries. The world has developed into a global village due to the help of information technology allowing countries like Chile and japan who are not only separated by distance but also by language to shares ideas and information with each other.

Second is communication with the help of information technology communication has also become cheaper, quicker and more efficient. We can now communicate with anyone around the globe by simple text messaging them or sending email for an almost instantaneous response. Now days the internet has also opened up face direct communication from different parts of the world thanks to the help of video conferencing.

After that the information system also can make the cost effectiveness. Information technology has helped to computerize the business process thus streamlining businesses to make them extremely cost effective money making machines. These in turn increase productivity which ultimately gives rise to profit that mean better pay and less strenuous working condition.

There also have some disadvantage of information technology the firstly is unemployment, while information technology may have streamlined the business process it has also created job redundancies, downsizing and outsourcing. This mean that a lot lower and middle jobs have been done away with causing more people to become unemployed.

Next is about privacy when we use information technology so it will be quicker, easier and more convenient, it also bought along privacy issue. From cell phone signal interceptions to email hacking, people are now worried about their once private information becoming public knowledge.

The lack of job security is also the issue of the disadvantage of information technology. Industries experts believe that the internet has made job security a big issue since technology keeps on changing with each day. This means that one has to be in constant learning mode, if he or she wishes for their job to be secure.       

Factors Effecting Price Decision

First of all the effecting of price decision is many competitors want to establish and maintain loyal customer, they often match their competitors’ prices. Some retailers will give an extra discount if you find the same product for less somewhere else. Similarly, if one company offers you free shipping, you might discover other companies to. With so many product sold online, customer can compare the prices of many merchants before making a purchase decision. Also the availability of substitute product affects a company’s pricing decision as well. If the customer can find as same shoes for 30 percent less at a second store, would you buy them? There a good chance you might.

Next is about the economy and government laws and regulation. The economy also has a tremendous effect in the economic pricing decision. We noted that factor in economic environment include interest rates and unemployed level. When the company is weak and many people are unemployed, companies often lower their prices. In international markets, currency exchange rates also affect pricing decision. Pricing decision is effected by federal and state regulation. The regulations are designed to protect consumer, promote competition and encourage ethical and fair behavior by business.

The intent of the act is to protect small business from larger business that try to extract special discounts and deals for themselves in order to eliminate their competitors. After that price fixing which occur when firms get together and agree to charge the same price, illegal. Usually, price fixing involves setting high prices so customer must pay a high price regardless of where they purchase a good or services.

Other than that the product cost also effecting the prices decision. The cost of product is including the amount spent on product development, testing and packaging required have to be taken into account when a pricing decision is made. So do the costs related to promotion and distribution. For example when a new offering is launched, its promotion cost can be very high because people need to be made aware that it exists.

 Thus, the offering’s stage in the product life cycle can affect its price. Keep in mind that a product may be in a different stage of its life cycle in other market. For example while sales of the iPhone remain fairly constant in united states, the Koreans left the phone was not as a good their current phones and was somewhat obsolete. Similarly, if a company has to open storefronts to distribute and sell the offering, this too will have to be built into the price the firms must charge for it.

The total costs include both fixed costs and variable costs. Fixed costs, or overhead expenses, are costs that a company must pay regardless of its level of production or level of sales. A company fixed cost includes items such as rent, leasing fees for equipment, contracted advertising costs, and insurance. The variable costs are costs that change with a company level of production and sales. Raw material, labor, and commission on unit sold are example of variable cost. They have too variable costs, such as the cost of gasoline for the car or your utility bills, which very depending on how much you use it. 

Market Structure

PERFECT COMPETITION

In perfect competition (sometimes called as pure competition) it describes that the participation of large number of sellers and buyers in the market and are not large enough in setting the price of homogeneous products. Every seller is said as the “price takers”. This means that the sellers cannot determine the price based on their own but must depends on the market situation, which strongly affected by the supply and demands. No entry and exit barriers make it extremely easy to enter or exit a perfectly competitive market. This is because perfect competition requires small investments to start the business.

mineral water

sugar

MONOPOLY (PERFECT MONOPOLISTIC)

A monopoly is a structure in which a single supplier produces and sells a given product. If there is a single seller in a certain industry and there are not any close competitors or substitutes for the product. They also called as price maker and profit maximize. Only the firm produce the product and decide the price for the service offered or the product to be sold. But, does so by determining the quantity in order to demand the price desired by the firm. To remain the situation, the seller must be able to restricted entry.

Astro

KTMB

OLIGOPOLY

Oligopoly is a market structure characterized by a small number of relatively large firms that dominate an industry. The market can be dominated by as few as two firms or as many as twenty, and still be considered oligopoly. Because an oligopoly firm is relatively large compared to the overall market, the price determination can be in 2 ways .the first is based on price leader and the other on is based on cartel. Based on price leader means that the competitors in a certain industry have to follow the price of the price leader (the company who dominant in the market in that industry). If the price is determined based on cartel, it is mean that the firm need to set the price of product or service based on the price stated on non-profit organization. A primary example of such a cartel is(Oil Producer Economic Country) which has a profound influence on the international price of oil.

Nestle

Nike

MONOPOLISTIC COMPETITION

Monopolistic competition is a market structure characterized by a large number of relatively small firms. While the goods produced by the firms in the industry are similar, slight differences often exist. As such, firms operating in monopolistic competition are extremely competitive but each has a small degree of market control. The four characteristics of monopolistic competition are:

(1) large number of small firms but not as large as Perfect Competition,

(2) similar, but not identical products,

(3) easy entry and exit the market, but not easy as Perfect Competition,

(4) extensive, but not perfect knowledge.

(5) the product can be differentiate either physically or psychologically, via branding and packaging.

Petron-Petronas-Shell

Air Asia and MAS Airlines

The Past, Present and Future of Maersk Sealand

Maersk Group has a past story, and they are proud of their long history as innovators and industry first-movers. But, Maersk Group is not a company that rests on its laurels or spends valuable time looking back.

At Maersk, the history is part of the platform for future success and thus intimately linked to their present activities and future goals. Ultimately, the Maersk Group’s history is the story of a company looking ahead.

The company was founded in Denmark in 1904, with just a single freighter. In 1928, Maersk Line was founded, and a route between Asia and the United States established. In the year of 1962, was the establishment of the DUC, paving the way for our oil & gas business. In 1972, Maersk Oil started producing oil in North Sea. Also in 1972, Maersk Drilling was founded and in 1975, they added their first container vessel to the fleet. Then, Maersk Oil initiated oil production in Qatar in 1994.

In 2013, Maersk Line will launch 20 Triple-E vessels, the world's largest and most energy efficient container ships. Maersk Line’s “Daily Maersk” service celebrates its first anniversary, with the 72-vessel service achieving an average reliability score of 98% and saving 13% in CO2 emissions per container moved against the industry average. Maersk Drilling is working to double its workforce to become a global powerhouse in offshore drilling services. APM Terminals enters Russia, acquiring 50% of the controlling stake in Global Ports, which operates key terminals in St. Petersburg, Russia’s far east, and the Baltics.

The group is focusing its investments on Maersk Line, Maersk Oil, APM Terminals and Maersk Drilling, each of which is to generate at least USD 1 billion in profit in the medium term.