Beyond Truck Transport Rail and Air Cargo

Much of the discussion in this chapter has revolved around a number of examples related to truck-based freight transportation. We close the discussion in the chapter, however, by introducing two additional, non-truck-based examples, introducing rail and airfreight as alternatives on the OAK-ATL and NYC-ATL lanes, respectively. In doing so, we extend our earlier discussion about the tradeoffs presented by various freight transportation alternatives. 

Let us return to the scenario of Example 4.9, where we must determine the best choice among several alternatives for shipping a 20,10-lb item from our supplier in Oakland, CA to our DC in Atlanta, GA. For truck-based freight, TL was the better option over LTL. We now consider rail as another alternative. Specifically, we consider shipping via the rail equivalent of TL, in this case referred to as rail carload, or CL, in which the rail carrier allocates an entire boxcar to our shipment. The possible advantage of this is that the capacity of a rail boxcar is significantly larger than that of a truck trailer, specifically (see CSX, 2012), = 

Let us assume, however, that in spite of these complications, we still choose to use rail CL as our alternative. Moreover, assume that the rail carrier charges FCq, = 6500 per CL shipment. Note that this charge is higher than that for TL on a per-shipment basis, but for FTL versus a full rail carload on the OAK-ATL lane, the comparative rate is 0,148/ ton-mi for TL versus 0.108/ton-mi for rail CL. As we discussed earlier in the chapter, however, rail is slower than truck and there is clearly a cost-versus-service tradeoff. In this case, assume that = ij = 8 days and Cl = 2A days. 

Comparing Rail to Motor Freight Results on OAK-ATL Lane 

Lane/item Cost Freight Terms Mode Q R Orders per Year Ordering Cost Fiolding Cost In-transit Holding Cost (Estimated) Transportation Cost TAC 

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