Supply Chain the Rapid Growth

Supply Chain

The rapid growth of premium package services can be seen as the direct result of fairly basic economic forces at work in the supply chain and retail sector worldwide. Increasing self-service as technology progresses. Especially given the new technologies that allow for increased ordering form home and other more self-service oriented retail scenarios, retailer costs can be significantly reduced by encouraging such self-service. This reduces retailer costs, which both increases profits and reduces price to the consumers, and given the basic laws of supply and demand this creates a greater volume of sales (Regan 1960). at-home shopping depends on premium package services from a variety of international and domestic carriers, and as at-home self-service sales volume increases as a result of these economic forces, the use of such services necessarily increases as well.

2)

Motor carriers generally have higher revenue rates than rail carriers not because they have a larger share in the percentage of freight-ton miles -- the opposite is in fact the case -- but actually because they are generally less efficient at moving goods, especially in high volumes and over long distances (Lawyer 2006). Though there is greater energy and economic efficiency for small commodity levels traveling over shorter distances when shipped by motor carriers, it is still more expensive per freight-ton mile, and hugely more so for larger commodity levels over large distances (Lawyer 2006). This cost differential is the cause for higher revenues for motor carriers than for railroad transporters; motor carriers do not necessarily post higher profits, as a larger percentage of shipment cost goes directly to the carrier's own costs than they do for rail transporters, but revenues must be higher to meet motor carrier needs (Lawyer 2006).

3)

The primary difference between trailer-on-flatcar (TOFC) and container-on-flatcar (TOFC) intermodal transport is the level of modality that is available for each of these types of transport. Container on flatcar transport allows for standardized shipping containers used by marine and rail transport to be stacked directly onto railway flatcars, with up to four containers per standard flatcar if they are double stacked (Thompson 1996). Trailer on flatcar transport allowed for a similar configuration, though there are greater variations in trailer sizes and thus in the amount of freight that can be shipped using this method; the lessened standardization of these trailers and their ability to roll when not on these specialized flatcars makes them less able to be utilized on different modes of transport during the overall shipping process, and thus TOFC transport is becoming more obsolete (Thompson 1996). Double stacking cane be seen as a major innovation in intermodal shipping because it utilized the standardization of containers to double rail transport capacities.

4)

The value inherent to freight forwarding in the modern global supply chain can be stated both in terms of finances and efficiency, which ultimately has its own effect on finances and revenues, as well. These two value elements are largely intertwined in the supply chain itself as well -- freight forwarders are better equipped to locate available shipping space at the best possible price than are individual manufacturers or even distributors (Baluch 2005). Freight forwarders essentially offer a service to both shippers and manufacturers/those in need of shipping, creating greater value for both asset-based entities in the arrangement by creating greater efficiency in the system as a whole (Baluch 2005).

5)

The seven economic drivers of transportation costs can be easily illustrated with the example of a standard laptop computer. Distance for many of these units is considerable, often requiring transport from parts of Asia to Europe and North America, with prices commensurate with the miles and modes of travel required. Weight and density for most laptops is not a major factor of increasing the cost of transport, as individual units are relatively light (between one and four pounds) and are not especially dense for their size (though this varies considerably from model to model). Stowability is also a relatively minor factor in the transport costs of laptops, as the standard rectangular packaging these units are typically transported in are easily stacked and oriented in different ways, allowing for greater packing efficiency; handling and liability given the value and the ease of damaging laptops, however, drives transportation costs up. The market has one of the most complex relationships with transportation costs, but as technological consumption continues to rise in the world, shipping from manufacturing regions will likely remain relatively cheap as the shipping supply grows.