QUESTION FIVE

Operational Processes in transport industry (Professional Stage)

You have instructed by the CEO of the company to setting up a new haulage office at Changlun Kedah Kedah. Your task is to secure the haulage market at the BKH's Industrial zone, Alor Setar and Kangar. Explain to the CEO on significant matters related to procedure in setting up an entire haulage office from initial planning until the effect of its operations. Use diagram or drawing to illustrate the understanding of the whole concept and related transportation processes. The details are as follows;

a. Elaborate the TEN (10) steps in setting up a haulage company

b. In the first assignment, you have received a request form customer to haul one (1) forty-footer laden container from Changlun to Pasir Gudang Port Johor. The same vehicle with laden container will be transported back to Changlun (round trip). Calculate the haulage rates and you are required to send a quotation to the respective customer and CEO as soon as possible (Table 1 and 2).

ii.Calculate the rate with own calculation(basic calculation)

iii.Compare the rate between government and your basic calculation.

Which one of the rate shall benefited to your company and why

Table 1; The details of assignment

PO LONG HAULAGEAND TRUCKING SERVICES SDN BHD

No

The Details

Remarks

1

Load (two ways) full load containers

40 footer's

2

Distance(one way) to Tampoi

920 km

3

Fuel target km/liter

2.5

4

Diesel price (liter) - RM

1.80

5

Toll price (km) - RM

0.08

6

Insurancecargo (one way)cargo - RM 250 ,000

0.03%

7

Vehicle insurance,road tax ,licensing, permit

5000

8

Terminal charges - export (one time)- P.Gudang Port

40

9

Loading unloading at client premises (stuff/un-stuffing)

40

10

Duration of movement- 2 days

48 hours

11

Two driver (salary and allowance) /day

40

12

Driver incentives (per/person)/day

100

13

Life insurance for driver (per/person)/year

140

14

Admin costs- monitoring /tel/billing/ month

2000

15

Prime mover (installments) -flat rate 6% (5 years)

350,000

16

Trailers installment -flat rate 6% (5 years)

35,000

17

Depreciation (vehicles) /year

20%

18

Marketing costsfrom value of cargo

0.05%

19

Maintenance/repairs (wear andtear)

15%

20

Profit

12%

21

GST/SST

10%

Note : Transport calculation - One month - 30.5 days

Table 2: Government Rate Table

NO

THE ROAD PRICINGS FOR CONTAINER HAULAGE

1

a. Short haul (96 km) from the port zone and rates for 20 footer containers.

i. First 32 km of part - RM 0.18 /tonii. Every km than 32 km - RM0.125/ton.iii. Every km thereafter- RM0.07 /ton

2

b. Long haul (exceeding 96 km from the port) for 20 footer containers

i. First 60 km - 0.20senii. Next 60 km - 0.12 seniii. Next 60 km - 0.06 sen

c. The 40 footer container rate will twice of 20 footer container

Rates are charged on a round trip basis comprising one way laden and one way empty where by the charge for transportation of an empty container is half of laden rate)