the word limit should be 800 to 1000 words so please give the answers as requirement.

In summary, it's time to understand your parcel characteristics as well as how the carriers will view your business. If you can position yourself and partners to be a shipper that parcel carriers can serve profitably, you will be rewarded with better discounts and have stronger negotiating leverage. Source: Peter Moore, Logistics Manogement, March 2017, p. 12. Reprinted with permission of Peerless Media, LLC. Introduction The motor carrier industry played an important role in the development of the U.S. economy during the 20th century, and it continues this role in the 21 st century. The growth of this industry is noteworthy considering it did not get started until World War I, when converted automobiles were utilized for pickup and delivery in local areas. The railroad industry, which traditionally had difficulty with small shipments that had to be moved short distances, encouraged the early motor carrier entrepreneurs. It was not until after World War II that the railroad industry began to seriously attempt to compete with the motor carrier industry, and by that time it was too late. The United States has spent more than $128.9 billion to construct its interstate highway system and the process has become increasingly dependent on this system for the movement of freight. The major portion of this network evolved as the result of a bill signed into law in 1956 by President Dwight D. Eisenhower to establish the National System of Interstate and Defense Highways, which was to be funded 90 percent by the federal government through fuel taxes. As the interstate system of highways developed from the 1950 s to 1991 , motor carriers steadily replaced railroads as the mode of choice for transporting finished and unfinished manufactured products. Today, motor carriers have the largest share of U.S. freight movements among all the pages of trapsportation. Significance In 2015, motor carriers moved 10.5 billion tons of freight in the United States, which represents roughly 70 percent of the total U.S. freight tonnage, and generated $726.4 billion in freight revenues, which represents about 81.5 percent of the U.S. freight bills. 1 This means that, on average, 82 cents of every dollar spent on transportation in the United States goes to the trucking industry. In 2014, the U.S. trucking industry operated roughly 31.4 million trucks (registered trucks), which collectively traveled 279.1 billion miles (excluding the government and farm sectors); burned 54.3 billion gallons of fuel; and employed 7.3 million people (including all jobs that relate to trucking activity) -3.4 million of whom are truck drivers. 2 Figures 5-1 and 5-2 show that, with one exception observed during the recession in 2009, the motor carrier industry is increasing its business volume steadily over many years (as measured by total tonnage and revenue). These figures clearly demonstrate the significant role that motor carriers play in our society and the dependence of U.S. companies on motor carrier service. Types of Carriers The U.S. motor carrier industry can be broken down into several segments. The first major division of motor carriers is between for-hire and private carriers. The for-hire carrier provides services to the public and charges a fee for the service. The private carrier provides a Scanned with CamScanner The U.S. motor carrier industry can be broken down into several segments. The first major division of motor carriers is between for-hire and private carriers. The for-hire carrier provides services to the public and charges a fee for the service. The private carrier provides a Scanned with CamScanner E 5-1 For-Hire Truck Tonnaae Index service to the industry or company that owns or leases the vehicles, and thus does not charge a fee, but obviously the service provider incurs cost. Private carriers might transport commodities for-hire. This is a strategy often used by private carriers to reduce empty backhaul miles (because in many cases they cannot fill backhaul truck capacities -if, for example, a private truck of a grocery chain store ships goods from warehouses to individual stores, the truck may not be able to fill its trailer on the way back to warehouses). When private carriers are operating in such a capacity, they are essentially for-hire carriers. Shippers must choose whether to use a for-hire carrier or to operate their own private fleet. The decision is based on what is best for their business. Trade-offs exist for both options, but the decision will ultimately be determined by the needs of the shipper. For-hire carriers can be either local or intercity operators, or both. The local carriers pick up and deliver freight within the commercial zone of a city. The intercity carriers operate between specifically defined commercial zones to include the corporate limits of a municipality plus adjacent areas beyond the corporate limits determined by the municipal population. Local carriers frequently work in conjunction with intercity carriers to pick up or deliver freight in the commercial zone. The for-hire carriers may be common, contract, and/or exempt operators. The common carriers are required to serve the general public upon demand, at reasonable rates, and without discrimination. The contract carriers serve specific shippers with whom the carriers have a continuing contract; thus, the contract carrier is not available for general public use. Contract carriers also typically adapt their equipment and service to meet shipper needs. Exempt carriers are those that transport exempt (unregulated) property owned by others for compensation. 3 The exempt commodities usually include unprocessed or unmanufactured goods, fruits and vegetables, and other items of little or no value. Another important distinction is between the truckload (TL) and less-than-truckload (LTL) carriers. The truckload carriers provide service to shippers who tender sufficient volume to meet the minimum weights required for a truckload shipment and truckload rate, or who are willing to pay the truckload rate even though their shipment sizes are less than the minimum weights. Less-than-truckload carriers provide service to shippers who tender shipments lower than the minimum truckload quantities, such as 50 to 10,000 pounds. Consequently, the LTL carrier must consolidate the numerous smaller shipments into truckload quantities for the line-haul (intercity) movement and disaggregate the full truckloads at the destination city for delivery in smaller quantities. In contrast, the TL carrier picks up a truckload and delivers the same truckload at the destination. A hybrid type of carrier that has developed can best be characterized as a "heavy LTL" motor carrier. Shipment sizes carried by this type of carrier are in the upper end of what can be considered LTL shipments (that is, 12,000 to 25,000 pounds). This carrier utilizes truckload and delivers the same truckivad at wic utomsuns.. A hybrid type of carrier that has developed can best be characterized as a "heavy LTL" motor carrier. Shipment sizes carried by this type of carrier are in the upper end of what can be considered LTL shipments (that is, 12,000 to 25,000 pounds). This carrier utilizes consolidation terminals (like LTL carriers) to fully load trailers but does not utilize breakbulk facilities for deliveries. Rather, it delivers from the trailer, much like a "pool" carrier, charging line-haul rates plus a charge for each stop-off (like TL carriers). This type of carrier specializes in shipment sizes less than the TL carriers haul and more than LTL carriers haul. It has some fixed costs (because of the consolidation terminals), but not as much as in the LTL industry. Motor carriers can also be categorized into two types based on the kind of drivers they use. The first carrier type is one that mostly uses company drivers. Company drivers are those who are hired by a specific carrier, and the trucks they operate are owned by the employer. For company drivers, the carrier (employer) provides the equipment (tractor and trailer), fueling, cards, and all the supporting systems (such as routing software, GPS systems, etc.) necessary to operate trucks. In other words, company drivers simply drive the trucks owned by the employer, and all the vehicle operating costs (including maintenance and fuel cost) are paid by the employer. As such the company drivers are paid only for their labor. The second carrier type is one that mostly uses owner-operators. Owner-operators are those who own their trucks; that is, the drivers are entrepreneurs who have their own companies and equipment. But since it is often difficult for an individual owner-operator to receive freight demands (load tenders), they normally work with larger carriers as contractors so that they can haul the freights of the contracting carriers. Scanned with CamScanner rates to owner-operators own their equipment, the contracting carriers will pay higher maintenance and futors than to company drivers because owner-operators pay their own of fuel, maintenance, etc., (that is, the rate the contracting carriers pay includes the cost ators, however, often receive some carriers do not have to pay these costs). Owner-opermay include the routing service (the supporting service from contracting carriers, which and the fuel optimization service (sofan use the routing software that the carriers use), refueling cost-this will be discuse (software that instructs where to buy fuel to minimize carriers belong to the first type, whed in detail later). In the United States, most motor drivers (10 to 20 percent are where roughly 80 to 90 percent of drivers are company use owner-operators, such as owner-operators). There are some carriers that exclusively drivers is that carriers have cont Transit in Minnesota. An advantage of using company use), whereas an advantage of uning over many things (such as the type of equipment to (fleet size) flexibly at any timing owner-operators is that carriers can adjust its capacity when the economy becomes sor example, quickly reduce the number of contractors the trature ofing industry can also be broken down into two segments based on the nature of the freight being transported, namely, general freight trucking and specialized freight trucking. General freight trucking provides transportation of general commodities, while specialized freight trucking provides transportation of freight that requires specialized equipment because of the nature of freight, such as size, weight, and shape. 5 Specialized freight may include petroleum products, refrigerated goods, forest products, and hazardous materials, and specialized equipment includes flatbeds, tankers, and refrigerated trailers. 6 The specialized freight trucking also includes furniture-moving companies. Number of Carriers Historically, motor carriers were required to have operating authority issued by either federal or state authorities. Since 1996, with the repeal of the Interstate Commerce Act and the elimination of the Interstate Commerce Commission (ICC), such authority is no longer required. The ICC Termination Act of 1995-removed virtully all motor carrier regulations and preempted the statepagen exrciping 15 economi@ontre tover motor carrier industry. Carriers are now only required to register with the Federal Motor Carrier Safety Number of Carriers Historically, motor carriers were required to have operating authority issued by either federal or state authorities. Since 1996, with the repeal of the Interstate Commerce Act and the elimination of the Interstate Commerce Commission (ICC), such authority is no longer required. The ICC Termination Act of 1995 removed virtually all motor carrier regulations and preempted the states from exercising any economic control over the motor carrier industry. Carriers are now only required to register with the Federal Motor Carrier Safety Administration and provide proof of insurance. They can then transport any commodity they wish, with only household goods and related items being subject to economic oversight. Because of this change, the motor carrier industry today consists of a large number of small carriers, particularly in the TL (truckload) segment of the industry. As of 2015, a total of 586,014 interstate motor carriers were on file with the Department of Transportation. Of these carriers, 90.8 percent operate with six or fewer trucks, and 97.3 percent operate fewer than 20 trucks. 7 This figure supports the small firm composition of the for-hire carrier industry. Keep in mind that many businesses do use their own private fleet (in 2015 there were 747,781 private carriers in the United States 8 ). A further explanation of the large number of small carriers is the limited capital needed to enter the TL industry. A motor carrier can be formed with as little as $5,000 to $10,000 equity, and the balance can be financed with the vehicle serving as collateral for the loan. However, LTL carriers have terminals that increase the capital requirements and thus add There is a significant difference between TL and LTL carriers, both in terms of number a constraint to entry. and start-up costs. The great growth that occurred in the 1980s, when regulated carriers more than doubled, happened primarily in small TL carriers because of the low start-up :s Federal Motor Carrier Safety Administration, U.S. Department of Transportation. The LTL segment of the motor carrier industry requires a network of terminals to consolidate and distribute freight, called a "hub-and-spoke" system. The large LTL carriers moved to expand their geographic coverage after 1980, and many of them eliminated their TL service. Because of this relatively high level of fixed costs, the LTL industry has continued to consolidate. In August 2003, Yellow Corporation announced that it would buy Roadway Corporation for $1.1 billion. After it was approved by the appropriate government agencies, that controls approximately 29 percent of the national LTL carrier market.9 The LTL segment of the motor carrier industry requires a network of terminals to consolidate and distribute freight, called a "hub-and-spoke" system. The large LTL carriers moved to expand their geographic coverage after 1980, and many of them eliminated their TL service. Because of this relatively high level of fixed costs, the LTL industry has continued to consolidate. In August 2003, Yellow Corporation announced that it would buy Roadway Corporation for $1.1 billion. After it was approved by the appropriate government agencies, this consolidation created a company (whose name was changed to YRC Freight in 2012) that controls approximately 29 percent of the national LTL carrier market.' Perhaps a brief description of an LTL operation would be helpful here. Shippers that have small shipping requirements use LTL carriers (for example, the cubic capacity of a 53-foot trailer is not needed for the shipment). Also, the LTL shipper typically has shipments headed for more than one destination. The LTL carrier collects the shipments at the shipper's dock with a pickup and delivery (PUD) vehicle. This vehicle, as its name implies, does the collection and delivery of all shipments. After a PUD vehicle has finished collecting and delivering shipments, it returns to a consolidation or break-bulk facility. Once at the consolidation facility, the packages collected are sorted by their final destination. The next part of the trip is called the line-haul segment. For this portion of the trip, the shipments are loaded into 28-foot, 48-foot, or 53-foot trailers. If 28-foot trailers are used, they are hooked together in combinations of twos and threes, depending on the state's trailer configuration permitted over the route of travel. Although small, the 28-foot trailer is often used because it is easier to unload two 28-foot trailers at separate bays than to unload one 48-foot or 53-foot trailer at one bay. Another reason for using the 28-foot trailer is because LTL carriers find that it is easier to utilize the capacity of a 28-foot trailer. After the line-haul portion of the trip, the trailers are unloaded at another break-bulk facility and are then sorted and reloaded into a PUD vehicle to be delivered to the receiver. The TL segment of the industry has been experiencing some limited concentration. Carriers such as J.B. Hunt and Schneider National have become increasingly larger. The ability of the larger TL carriers to compete effectively with small TL companies with their value-added services might change the structure of the TL segment. This may be exemplified by the recent mega-merger of Swift and Knight in 2017 , which created a new TL giant with $5 billion annual revenue, 23,000 power units (tractors), 77,000 trailers, and 28,000 employees. 10 With the repeal of the Interstate Commerce Act, combined with changes in distribution patterns, a climate was created in which new TL carriers could easily enter the business. The "trucking recession" of 1994, 1995, and 2009, during which capacity greatly exceeded demand, removed many of the weaker firms through either bankruptcy or merger. However, low start-up costs in this sector still enabled new entrants to attempt success in this area. Market Structure When discussing the motor carrier industry, consideration must be given to the commodities hauled. Motor carrier vehicles, both for-hire and private, primarily transport manufactured, high-value products. These vehicles carry more than a majority of the various manufactured commodity categories. The commodity list includes food and manufactured products, consumer goods, and industrial goods. In addition, these vehicles transport almost all of the sheep, lambs, cattle, calves, and hogs moving to stockyards. 11 Motor carriers transport less of commodities such as grain, primary nonferrous metal products, motor vehicles and equipment, and paper and allied products. Because such commodities generally must move long distances and in large volumes, shipping them by rail and water is usually less expensive. From a market structure perspective, the TL market can be considered as monopolistic competition. With the low entrance to market requirements (that is, capital), individuals can easily obtain equipment and begin operation within a specific geographic region. The LTL market, on the other hand, is oligopolistic in nature. This is the result of the significant investment needed by these carriers in break-bulk and other facilities. As such, barriers to Competition Motor carriers compete vigorously with one another for freight. With the large number of for-hire motor carriers, rivalry between firms can be intense. However, the most severe competition for for-hire carriers often comes from the private carrier. As indicated earlier, the TL motor carrier industry offers few capital constraints to entry. With a relatively small investment, an individual can start a motor carrier business and compete with an existing carrier. Thus, freedom of entry, discounting, and lack of regulatory constraints appear to dominate the industry and suggest that competition between firms can control the industry. Such a conclusion has been the basis for greater reliance on the marketplace and less reliance on regulation. Even though the LTL segment is more concentrated, there is still intense competition between the top carriers. Other competitors include United Parcel Service, FedEx, and FedEx Ground. Certain segments of motor carriers have higher capital requirements than others, as indicated, and therefore have some degree of capital constraint for entry. The major segment that has extensive capital requirements for entry is the LTL carrier. The LTL carrier must invest in terminals and freight-handling equipment that are simply not needed by the TL Scanned with CamScanner HAPTER 5 carrier. Special equipment carriers-carriers of liquefied gases or frozen products-usually The large TL carriers like J. B. Hunt and Schnder Tational also have significant capital carrier. Special equipment carriers-carriers of liquefied gases or frozen products-usually have larger investments in equipment and terminals than those involved with general freight, The large TL carriers like J.B. Hunt and Schneider National also have significant capital On the whole, the motor carrier industry, especially for contract carriers, has been mar. investment. ket oriented. Meeting customer requirements has been a common trait of motor carriers. The small size of the majority of for-hire carriers allows them to give individualized attention to customers. As carriers have grown in size, this close carrier-customer relationship has been strained. However, the responsiveness to customer demands for service still dominates all motor carrier organizations, and shippers expect carriers to respond to their needs. Operating and Service Characteristics General Service Characteristics The growth and widespread use of motor carrier transportation can be traced to the inherent service characteristics of this mode. In particular, the motor carrier possesses a distinct advantage over other modes in the area of accessibility. The motor carrier can provide ser. vice to virtually any location as operating authority of the for-hire carrier no longer places restrictions on the areas served and commodities transported. Motor carrier access is not constrained by waterways, rail tracks, or airport locations. The U.S. system of highways is so pervasive that virtually every shipping and receiving location is accessible via highways. Therefore, motor carriers have potential access to almost every origin and destination. The accessibility advantage of motor carriers is evident in the pickup or delivery of freight in an urban area. It is very rare to find urban areas not served by a pickup-delivery network In fact, motor carriers provide the bridge between the pickup and delivery point and the facilities of other modes; that is, the motor carrier is referred to as the universal coordinator. Another service advantage of the motor carrier is speed. For shipments going under 800 miles, the motor carrier vehicle can usually deliver the goods in less time than other modes. Although the airplane travels at a higher speed, the problem of getting freight to and from the airport via motor carrier adds to the air carrier's total transit time. In fact, the limited fived cchedules of the air carriers might make motor carriers the faster mode even advantage over other modes in the area or accosonsm. vice to virtually any location as operating authority of the for-hire carrier no longer places restrictions on the areas served and commodities transported. Motor carrier access is not constrained by waterways, rail tracks, or airport locations. The U.S. system of highways is so pervasive that virtually every shipping and receiving location is accessible via highways. Therefore, motor carriers have potential access to almost every origin and destination. The accessibility advantage of motor carriers is evident in the pickup or delivery of freight in an urban area. It is very rare to find urban areas not served by a pickup-delivery network. In fact, motor carriers provide the bridge between the pickup and delivery point and the facilities of other modes; that is, the motor carrier is referred to as the universal coordinator. Another service advantage of the motor carrier is speed. For shipments going under 800 miles, the motor carrier vehicle can usually deliver the goods in less time than other modes. Although the airplane travels at a higher speed, the problem of getting freight to and from the airport via motor carrier adds to the air carrier's total transit time. In fact, the limited, fixed schedules of the air carriers might make motor carriers the faster mode even for longer distances. For example, a delivery to a destination 800 miles away might take 17.8 hours by motor carrier ( 800 miles at 45mph ). Although the flying time between airports is 1.5 hours, 3 hours might be needed for pickup and 3 hours for delivery, plus time for moving the freight from one vehicle to another. If the airline has scheduled only one flight per day, the shipment could wait up to 24 hours before being dispatched. The motor carrier, however, proceeds directly from the shipper's door to the consignee's door. This service advantage became evident in the wake of September 11, 2001, when U.S. air traffic was shut down. The U.S. Post Office issued a statement alerting customers of delays for any package or letter traveling more than 800 miles because any Post Office shipment moving over 800 miles travels by air and under 800 miles travels by motor carrier. When compared to the railcar and barge, the smaller carrying capacity of the motor carrier vehicle enables the shipper to use the TL rate, or volume discount, with a lower volume. Many TL minimum weights are established at 20,000 to 30,000 pounds. Rail carload minimum weights are often set at 40,000 to 60,000 pounds, and barge minimums are set in terms of hundreds of tons. The smaller shipping size of the motor carrier provides the buyer and seller with the benefits of lower inventory levels, lower inventory-carrying costs, ind more frequent services. Another positive service characteristic is the smoothness of transport. Given the suspension system and the pneumatic tires used on their vehicles, the motor carrier ride is smoother than rail and water transport and less likely to result in damage to the cargo (although there can still be some cargo damage with motor carrier transportation). This relatively damage-free service reduces the packaging requirements and thus packaging costs. Lastly, the for-hire segment of the motor carrier industry is customer or market oriented. The small size of most carriers has enabled or even forced the carriers to respond to customer equipment and service needs. Equipment Many of the motor carrier service advantages emanate from the technical features of the transportation vehicle. The high degree of flexibility, the relatively smooth ride, and the small carrying capacity of the vehicle are the unique characteristics that result in greater accessibility, capability, frequency of delivery and pickup, cargo safety, and lower transit time. The motor carrier vehicle can also be loaded quickly. A railroad operation needs to collect a number of freight cars to be pulled by one power unit; the motor carrier has just one or two. The ability to operate one cargo unit eliminates the time needed to collect several cargo units. The other dimension of motor carrier equipment flexibility is the lack of highway constraint. Unlike the railroad and water carriers, the motor carrier is not constrained to providing service over a fixed railway or waterway. The motor carrier can travel over the highway, paved or unpaved, servicing virtually every conceivable consignee in the United States. 12 There are, however, gross vehicle weight and axle weight restrictions on vehicles while traveling the highway system. In most cases, equipment represents the largest operating asset that a carrier maintains. With all of the different types and locations of equipment, positioning becomes critical to successful operations. Seasonal influences such as holidays or harvest times must also be considered, as they can drastically alter demand. TL and LTL carriers need to make two types of equipment decisions: type of tracto (power unit) and type of trailer. Page TL8 operatis, equipment positoning at terminals With all of the different types and locations of equipment, positioning becomes critical to successful operations. Seasonal influences such as holidays or harvest times must also be considered, as they can drastically alter demand. TL and LTL carriers need to make two types of equipment decisions: type of tractor (power unit) and type of trailer. In a TL operation, equipment positioning at terminals is not as important as in an LTL operation. However, power must be specified to be able to handle the size and length of the load, along with the terrain over which it travels. Many different specifications for tractors can be used, including single axle and twin axle, with different engine and drive train combinations. Decisions regarding trailers include length (28 feet, 45 feet, 48 feet, 53 feet, and so on) and trailer type (dry van, refrigerated, ragtop, container, flatbed, and so forth). These decisions will be made in light of market demands and the type of carrier operation. LTL carriers must make the same types of equipment decisions as TL carriers along with deciding where to deploy this equipment. Similar to an airline equipment decision, LTL carriers need to position certain types of equipment at certain terminals. For example, city delivery vehicles and tractor-trailer combinations (either 28-foot or 40 -foot trailers) will be positioned at PUD terminals, whereas line-haul trailers (usually 45,48 , or 53 feet) and line-haul tractors (single or twin axle) will be assigned to break-bulks. Compounding the LTL decision is the inclusion of 28-foot trailers (also called pups, twins, or double bottoms) in the equipment decision. Having the right mix of power and trailers at a particular terminal location determines the ability to efficiently serve customers. Types of Vehicles Motor carrier vehicles are either line-haul or city vehicles. Line-haul vehicles are used to haul freight long distances between cities. City straight trucks are used within a city to provide pickup and delivery service. On occasion, line-haul vehicles also will operate within a city, but the line-haul vehicle is normally not very efficient when operated this way. Line-Haul Vehides The line-haul vehicle is usually a tractor-trailer combination of three or more axles (see Figure 5-4). The cargo-carrying capacity of these vehicles depends on the size (length) and the federal/state maximum weight limits. A tractor-trailer combination with five axles (tandem-axle tractor and trailer) is permitted on the interstate system to haul a maximum of 80,000 pounds gross vehicle weight (20,000 pounds on a single axle or 34,000 pounds on a tandem axle). States can have different maximum weights on their highway systems. For example, Michigan allows a maximum gross vehicle weight of 164,000 pounds on their state highways (which can only be achieved by the use of 11 properly spaced axles). Motor carriers can haul freights that are heavier than these maximums by obtaining special permits from states and/or by operating long-combination vehicles (LCVs-see Figure 5-4). The net carrying capacity of line-haul vehicles is also affected by the density of the freight. As an example, consider a 53-foot 102-inch 110-inch trailer that has 3,500 cubic feet of space and a payload limit of 45,000 pounds. If commodity A has a density of 10 pounds per cubic foot, then the maximum payload of commodity A for the vehicle is 35,000lbs(3,500ft310lb/ft3), because in this case the volume capacity would be reached before the weight capacity would (meaning that the weight capacity is underutilized). If, in contrast, commodity B has a density of 20 pounds per cubic feet, then the maximum payload of this commodity for the vehicle is 45,000lbs(2,250ft320lb/ft3), because in this case the weight capacity would be reached before the volume capacity would (meaning that the volume capacity is underutilized). Note that, by mixing multiple commodities or products in a shipment, better capacity utilizations (in both volume and weight) and more efficient loading can be accomplished. In the above example, if we mix the two commodities such that a shipment is comprised of 2,500 pounds of commodity A and 1,000 pounds of commodity B (which results in volume requirement of 2,500ft3+1000ft3=3,500ft3 and weight requirement of 2,500ft310lb/ft3+1,000ft320lb/ft3=45,000lbs ), then the capacity utilization, in both volume and weight, would be 100 percent. This can reduce the total number of shipments needed to transport commodities A and B in combination. Some smart shippers are collaborating to build such efficient loads. 13 Clty Straight Truds City vehicles, or "straight trucks," are normally smaller than line-haul vehicles and are single units (see Figure 5-4). The city truck has the cargo and power unit combined in one vehicle. The typical city truck is approximately 20 to 25 feet long with a cargo unit 15 to 20 feet long. However, there is growing use of small trailers ( 28 feet) to pick up and deliver freight in the city. Since these trailers can also be used for line-haul, this practice can increase the efficiency (shipments can be "loaded to ride," meaning they will not require handling at the origin terminal). Spedal Vehides In addition to the line-haul and city vehicle classifications, the following special vehicles are designed to meet special shipper needs: - Dry van: Standard trailer or straight truck with all sides enclosed - Open top: Trailer top is open to permit loading of odd-sized freight through the to - Flatbed: Trailer has no top or sides; used extensively to haul steel - Tank trailer: Used to haul liquids such as petroleum products - Refrigerated vehicles: Cargo unit has controlled temperature - High cube: Cargo unit has drop-frame design or is higher than normal to increa cubic capacity - Special: Vehicle has a unique design to haul a special commodity, such as liquefied gas or automobiles The Department of Transportation's Federal Motor Carrier Safety Administration has established many rules and regulations governing the specifications of motor carrier vehicles. These regulations cover such areas as the number of lights on the vehicle, the type of brakes used, tire specifications, and other operating parts. 14 The overall allowable length, weight, and height of the vehicle are prescribed in the various states. 15 Terminals Some motor carrier operations, namely TL operations, might not require terminals for the movement of freight. The carrier uses the shipper's plant for loading and the consignce's plant for unloading. Typically, TL terminals normally provide dispatching, fuel, and Scanned with CamScanr maintenance services. Some carriers, such as Schneider National, are expanding the services offered by their terminal facilities to include restaurant and hotel offerings to give their drivers alternatives to truck stops. These terminals are designed primarily to accommodate drivers and equipment, but not freight. All LTL operations, on the other hand, require terminals, and they use terminals for different purposes (such as loading and consolidation) than TL operations. Some of the large LTL carriers, such as YRC Freight, have more than 250 terminals (YRC Freight once had over 500 terminals). A driver will leave a terminal to make deliveries throughout the country, but will always return to his or her domicile (a driver's domicile is the terminal that the drimer oriainally left). Since the terminal is a key facility in the operation of an LTL maintenance services. Some carriers, such as Schneider National, are expanding the services offered by their terminal facilities to include restaurant and hotel offerings to give their drivers alternatives to truck stops. These terminals are designed primarily to accommodate drivers and equipment, but not freight. All LTL operations, on the other hand, require terminals, and they use terminals for different purposes (such as loading and consolidation) than TL operations. Some of the large LTL carriers, such as YRC Freight, have more than 250 terminals (YRC Freight once had over 500 terminals). A driver will leave a terminal to make deliveries throughout the country, but will always return to his or her domicile (a driver's domicile is the terminal that the driver originally left). Since the terminal is a key facility in the operation of an LTL hub-and-spoke system, we will present an expanded discussion of the types and roles of the terminals in the following paragraphs. The terminals used by motor carriers can be classified as pickup/delivery, break-bulk, and relay (or any combination thereof). Pickup and Delivery Terminals (PUD) The most common type of terminal found in the LTL system is the PUD terminal. These are also called satellite or end-of-the-line (EOL) terminals. The PUD terminal serves a local area and provides direct contact with both shippers and receivers. The basic transportation service provided at this terminal is the pickup and/or delivery of freight on peddle runs. A peddle run (sometimes called milk run) is a route that is driven daily out of the PUD terminal for the purpose of collecting freight for outbound moves or delivering freight from inbound moves. A PUD terminal will have several peddle runs in its customer operating area. Figure 5-5 gives an example of how a peddle run is designed. The PUD terminal is located in Altoona, Pennsylvania. Attached to it are four peddle runs, one each to Tyrone, State College, Lewistown, and Huntington. Every Monday through Friday morning, a driver will depart the Altoona terminal and deliver freight to customers located on that driver's assigned peddle. During and after the deliveries, freight will be picked up from customers and returned with the driver to the Altoona terminal at the end of the day. When all the drivers return at the end of their shifts, the Altoona terminal will have freight to be consolidated and moved outbound from customers in Tyrone, StateCollege, Lewistown, and Huntington to customers in other areas of the country. Scanned with CamScanner Motor Note that there are two elements of a peddle run, on alled tem time and the other from when the driver makes the first pickup or delivery, it is also the time the Note that there are two elements of a peddle run, one called stem time and the other called peddle time. Stem time is the time that elapses from when the driver leaves the terminal until the driver makes the first pickup or delivery; it is also the time that elapses This is nonrevenue-producin the last pickup or delivery until returning to the terminal. want to locate PUD terminals in suecause no shipments are handled. A carrier would minimized. (This aspect of LTL servich a way that this nonrevenue-producing travel time is type of time is peddle time. This is the will be discussed later in this chapter.) The other the pickup and delivery of freight. The time during which the driver is actively involved in shipments are handled. Obviously, carris revenue-producing time because it occurs when would spend performing these activities. want to maximize the amount of time a driver The basic terminal services performed at these facilities are consolidation and dispersion. For example, freight moving inbound to Altoona from other terminals (passing through a break-bulk) will be broken into individual deliveries by peddle run to be handled by the driver during that particular shift. Freight that is brought back by the peddle drivers for movement outbound from Altoona will be consolidated into line-haul trailers for subsequent movement to the appropriate break-bulk. This is a basic cross-dock type of operation with a direction of freight flow across the dock that changes depending on whether the move is inbound or outbound. The dispatch operation provided at the PUD terminal is critical to the operating efficiency of the peddle runs. Freight can be picked up on peddle runs in one of two ways. First, a customer on a peddle run might have a standing order for a pickup every day at 10 a.m. The PUD driver is aware of this, so the customer has no need to notify the carrier in advance for the pickup. Second, a customer might call or email the local PUD terminal to order service for a pickup. This is where the local dispatcher becomes involved. The dispatcher records the nature of the shipment and required time of pickup and assigns that shipment to the driver on the appropriate peddle run. The PUD driver will periodically call in to or receive a satellite message from the dispatcher to determine the order and frequencies of new pickup requests. Obviously, the dispatcher needs to be familiar with the geography of the peddle runs and the capacity of the PUD drivers and trailers to efficiently route freight with the appropriate vehicle (today there are multiple software products, which are often called vehicle-routing software, that can help the dispatchers plan their peddle runs in the optimal, or near optimal, manner). Other services that are provided at the PUD terminal might optimal, or near optimal, manner). Other services that are provided at the PUD terminal might include tracing, rating and billing, sales, and claims. However, some carriers are beginning to centralize these functions at break-bulks or other locations by taking advantage of telecommunications technology. For example, many LTL carriers use the Internet for tracing purposes. When the customer accesses the carrier's website, the shipper keys in the pro number or waybill number (also called a tracking number) and the system provides the current status of the shipment. Break-Bulk Terminals Another type of terminal found in an LTL hub-and-spoke system is called a break-bulk. This facility performs both consolidation and dispersion (or break-bulk) services. Customers will rarely have contact with the operations at the break-bulk facility. The main purpose of this terminal is to provide an intermediate point where freight with common destinations from the PUD terminals is combined in a single trailer for movement to the delivering PUD terminal. This can be seen in Figure 5-6. Break-bulks will have many PUD terminals assigned to them as primary loading points. For example, assume that a shipper in Toledo, Ohio, wanted to send an LTL shipment to a customer in Pottstown, Pennsylvania. The Toledo PUD terminal is attached to the Cleveland, Ohio, break-bulk, and the Philadelphia PUD terminal, which handles the Pottstown peddle, is attached to the Lancaster, Scanned with CamScanner Pennsylvania, break-bulk. At the completion of the peddle run, the Toledo driver brings the shipment back to the Toledo PUD terminal. There it is sorted and combined with other shipments going to the Lancaster break-bulk service area. (This could include all PUD terminals covering significant portions of Pennsylvania, New York, New Jersey, and parts of Maryland.) These shipments are consolidated into one trailer that will be dispatched to the Lancaster break-bulk. Once the trailer arrives in Lancaster, it will be unloaded, and all of the freight destined to Philadelphia and its peddle runs will be loaded into an outbound trailer. This trailer will be dispatched from the break-bulk and will arrive at the Philadelphia terminal to be unloaded in the early morning so the freight can be segregated into peddle delivery vehicles for an early morning delivery schedule. Break-bulk facilities also serve as driver domiciles. City drivers located at a PUD terminal will always remain in their local area during their shift and will be able to return home when it is over. Line-haul drivers, however, might or might not be able to return home after a trip, depending on the length of haul they are assigned. For example, a turn means that a line-haul driver is assigned a load to be taken from the break-bulk (domicile) to a PUD terminal that is no more than 5.5 hours away. Because of DOT-mandated driving limits, that line-haul driver can-make the trip, drop-the trailer, and pick up another shipment destined bacpage th 13re/k15 lk within @ ho + of service driving limit. However, a movement that requires more than 5.5 hours driving time in one direction will require a nal will always remain in their local area during their shift and will be able to return home when it is over. Line-haul drivers, however, might or might not be able to return home after a trip, depending on the length of haul they are assigned. For example, a turn means that a line-haul driver is assigned a load to be taken from the break-bulk (domicile) to a PUD terminal that is no more than 5.5 hours away. Because of DOT-mandated driving limits, that line-haul driver can make the trip, drop the trailer, and pick up another shipment destined back to the break-bulk within the hours of service driving limit. However, a movement that requires more than 5.5 hours driving time in one direction will require a layover; that is, when the driver reaches the destination, a 10 -hour rest period is required before that driver will be able to take a return load back to the break-bulk and return to the domicile. Therefore, at the maximum, a driver facing an 11-hour run with a 10-hour layover and an 11-hour return trip will return to the domicile within 32 hours of the original departure. Sometimes, however, a return load is not immediately available, which will delay the driver's return. Relay Terminals Relay terminals are different from the PUD and break-bulk terminals in that freight is never touched. The relay terminal is necessitated by the maximum hours of service regulation that is imposed on drivers. Under DOT enforcement, drivers were permitted to drive a maximum of 11 hours after 10 consecutive hours off duty. At the relay terminal, one driver substitutes for another who has accumulated the maximum hours of service. (The term slip seat also has been used to describe the relay terminal operation.) As indicated in Figure 5-7, the location of the relay terminal is a maximum driving time of 11 hours from an origin. If the relay terminal is located 5.5 hours from an origin, the driver can drive to the relay terminal and return within the maximum 11 hours. (This is also called a turn.) Using the example given in Figure 5-7, assume that the driving time is 16.5 hours between origin and destination. Without the relay terminal, the transit time is 26.5 hours. After 11 hours of driving, the driver goes off duty for 10 consecutive hours. Upon resuming duty, the driver drives 5.5 hours to the destination. The total elapsed time is 26.5 hours (11+10+5.5). With the relay terminal, however, the driver drives 11 hours to the terminal, and another driver takes over and drives the vehicle to the destination. In this instance, the relay terminal reduces the transit time by 10 hours, the mandated driver off-duty time. Note, however, that carriers might have to rethink their relay structures if the driver hours of service rule is to change in the future (U.S. Department of Transportation has been working on revising this rule for some time). An alternative to the relay terminal is the use of a sleeper team-two drivers (this is often called team driving, too). While one driver accumulates the off-duty time in the sleeper berth of the tractor, the other driver is driving. The sleeper team has been most successful for long trips with many destinations. Terminal Management Decisions Many types of operating decisions need to be made when utilizing terminals in a carrier's network. Along with making these decisions, carrier management must also consider their strategic implications. This section will address a few of these types of decisions. Number of Terminals In many modes, this is a relatively simple decision. For example, passenger airline terminals will be located close to major population centers. This decision, however, usually does not belong to the carrier but to some local government agencv Number of Terminals In many modes, this is a relatively simple decision. For example, passenger airline terminals will be located close to major population centers. This decision, however, usually does not belong to the carrier but to some local government agency. Railroads must also make this decision but are limited by geography and track locations for terminal sites. Railroads will not normally have many terminals in their networks. The mode with probably the most difficult decision in this area is LTL motor carriage, primarily because of the vast numbers of terminals in these systems and the relatively small investment needed to develop a terminal site. The obvious question for an LTL motor carrier is, "How many terminals should we have?" The obvious answer is, "It depends." First, the degree of market penetration and customer service desired by the carrier will help determine the number of terminals to establish. In theory, the more terminals closer to the customer, the better the service. This also has proven to be true in practice. Realistically, at some point additional terminals will result in no incremental increase in service and might even detract from service. Second, the dilemma of small terminal versus long peddle must be addressed. Figure 5-8 represents this situation. In Example 1, assume that a carrier's market is the state of Pennsylvania, with one terminal located in Harrisburg with peddle runs to Erie, Scranton, Pittsburgh, and Philadelphia. This network utilizes only one terminal but has extremely long and expensive stem times for its peddle runs. The terminal must also be large to accommodate the volume of freight that will come from these four peddles. Example 2 shows a Scanned with CamScanner Thus, Example 2 has doubled the number of terminals but decreased stem times for cus. tomer PUD. The small-terminal versus long-peddle decision would be made based on the service implications of establishing terminals closer to customers versus the cost of adding another terminal. Many times when shippers are making distribution system decisions, they assume that manufacturing facilities are fixed and that warehouse decisions must be made based on this fixed network. This assumption is also part of the terminal decision process for LTL motor carriers, except their "manufacturing facilities" are break-bulk terminals. Whether or not another terminal can be added to a break-bulk's operating region might simply be a question of available capacity at that break-bulk. Normally, each PUD terminal is assigned at least one door at a break-bulk. To add another PUD terminal means eliminating an existing terminal, physically adding another door to the break-bulk, or improving the productivity at the break-bulk to turn trailers in doors more than once per shift. Locations of Terminals Closely related to the decision of how many terminals to establish is the decision of where to establish them. As previously mentioned, for airlines and railroads, this decision can be relatively simple because of geographic, government, and demand variables. LTL carriers, however, must consider some other variables. First, the DOT limits the amount of time a driver can continuously operate a vehicle before a rest period is required. Currently, this limit is 11 hours, so optimally PUD terminals should be located no more than 11 hours away from a break-bulk. This would allow a driver to complete the run in one trip. Second, market penetration and potential will help determine terminal location. As mentioned in the decision process for determining the number of terminals, getting closer to the customer can many times improve the level of service given to that customer. Finally, accessibility to major highways and other transportation modes (airports, rail yards, etc.) the decision of where to establish them. As previously mentioned, for airlines and railroads, this decision can be relatively simple because of geographic, government, and demand variables. LTL carriers, however, must consider some other variables. First, the DOT limits the amount of time a driver can continuously operate a vehicle before a rest period is required. Currently, this limit is 11 hours, so optimally PUD terminals should be located no more than 11 hours away from a break-bulk. This would allow a driver to complete the run in one trip. Second, market penetration and potential will help determine terminal location. As mentioned in the decision process for determining the number of terminals, getting closer to the customer can many times improve the level of service given to that customer. Finally, accessibility to major highways and other transportation modes (airports, rail yards, etc.) must be considered to reduce unnecessary vehicle miles and to facilitate speedy intermodal freight transfers. Recent trends in the LTL sector have seen significant reductions in the number of terminals as these carriers strive to provide overnight and second-day delivery to more and more customers. To do this, many interterminal runs have been realigned with the resultant elimination of intermediate handling. This has resulted in increased load factors and reduced transit times. Less handling has also improved the claims experience for the LTL carriers. Some long-haul LTL carriers will still favor the hub-and-spoke operation, whereas the regional carriers will still look toward fewer terminals with more direct runs. Refer to the W6 and W9 material including reading material and also investigate two online articles, preferably academic articles and provide your reflection of the following questions based on your understanding of the Motor Carrier and Railroad Transportation: 1. The motor carrier industry is probably the most visible segment of the transportation system in the United States. The motor carrier is also the most significant element of the U.S, freight transport industry. What factors account for the motor carrier's visibility and significance? 2. The railroad industry played a significant role in the development and growth of many cities and geographic regions during the 19th century. What role, if any, have motor carriers played during the 21 st century in terms of economic development. 3. Compare and contrast the TL segment of the motor carrier industry with the LTL segment in terms of infrastructure, cost structure, market structure, and operating characteristics. Length should be between 800 and 1000 words for all three answers