LOG206 Transport Management And Technology

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LOG206 Transport Management And Technology

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LOG206 Transport Management And Technology

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Course Code: LOG206
University: Singapore University Of Social Sciences

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Country: Singapore

Question:
More marks will be awarded for reports which provide more detailed discussion and in-depth analysis with adequate referencing to the transportation theories, concepts and models. 
 
Introduction – Outline you’re the purpose of this essay and provide the key information about the selected organization (about 200 words), information includes products, markets, competitors, organizational goals and strategies etc. 
 
Incoterms Selection Consideration – Analyze the effectiveness of transportation capability of the selected organization and its relevant information. Recommend the appropriate Incoterm(s) to be used
 
Carrier Selection Criteria – Analyze the transportation goals and needs of the selected organization and the relevant information. Recommend the appropriate criteria to be considered when selecting carrier(s) 
 
Carrier Relationship Management – Analyze the transportation goals and needs of the selected organization and the relevant information. Recommend the appropriate type(s) of relationship to be built with the carriers and the process of building the relationship.
 
Conclusion Reinstates all of the significant parts of this report and refers the reader back to the focus that have outlined in the introduction and to the central topic. 
Answer:

Introduction:
Transportation and distribution can be referred to as moving of products from manufacturing plants to warehousing and in between facilities to distributors. They represent more than half of the total logistics costs. A transportation management system (TMS) is a subpart of supply chain management which concerns about transportation operations. It can be a part of the enterprise resource planning system.
Distribution Management refers to supervising the movement of goods from suppliers or manufacturers to the point of sale ( Vieira, Fransoo & Carvalho, 2015).
This report introduces to the effectiveness of the three aspects of transportation management viz. incoterms selection consideration, carrier relationship management and carrier selection criteria. As a transportation manager of DHL, I would analyze the effectiveness of these three aspects of transportation management.
DHL Express is the division of Deutsche Post DHL, a German logistics company. It provides the services related to the international courier, express mail and parcel services. It is the largest logistics company operating around the world. It also operates through sea and air mail.
The company was found in the US in the year 1969. In the year 2016, the revenue of the division accelerated by 2.7% to €14 billion. The Earnings before Interest and Taxes (EBIT) of the company were enhanced by 11.3% to €1.5 billion in the year 2015(DHL International GmbHb, 2018).
It is serving over 220 countries around the globe. It has a workforce of around 350,000 employees serving to the business units DHL express, DHL e-commerce, DHL Global Forwarding, DHL Supply Chain and DHL Freight.
Its products and services include forwarding the freight with the planes, ships, trucks and trains all over the world. Its warehousing facilities go beyond storage and range from packaging to repairs, customized and specialized shipping and international deliveries of mail.
The goals and strategies of DHL Express are to be the logistics company for the whole world. Its mission pertains to delivering of excellence. Its strategy for the year 2020 comprises three pillars of Focus, Grow and Connect. Its vision, mission and goals are described in its “Strategy 2020″(DHL International GmbHc, 2018).  
Its major competitors are UPS, USPS, FedEx and SAP Logistics Execution and Shipping easy. Its market share is 29.4% and is ranked second out of nine logistics technologies (Datanyze, 2018).
Incoterm Selection Consideration
DHL has adopted a set of Incoterms for competing in the market and serving to its consumers. Incoterms are a framework of rules which are used for the interpretation of the commonly used terms of trade.
The application of incoterms to sale and procurement of contracts make the international trade easier and develop a better understanding amongst the partners operating in different countries. They also help in reducing the risk of the parties.  
The rules for any mode of transport pertain to Ex Works or EXW. It implies when the seller delivers the goods at the disposal of the buyer at its own premises or at any other factory or warehouse. It is not necessary for the seller to load the goods on any vehicle or clear the goods for exporting them (Garcia, Marchetta, Camargo, Morel & Forradellas, 2012).  
FCA or Free Carrier is also followed by DHL. It means that the company delivers the goods to the carrier or any other person nominated by the buyer at the premises of the seller or any other factory or warehouse.
DAT or Delivered At Terminal implies that the goods are delivered by the seller at the terminal or place of destination as named by the buyer.   CPT or Carriage paid to implies that the goods are delivered by the seller to the carrier or another person who is nominated by him at a place which is agreed between the two (DHL International GmbHa, 2018).
The effectiveness of the transportation capability of DHL is that DHL Express offers the delivery services for a day for pieces up to 70 kgs and shipments up to 1000 kgs with regards to export services. With regards to its import services, the company imports the shipments from over 200 countries all over the world ( DHL,2018).  
Recommendations for appropriate Incoterm to be used for the company
An appropriate incoterm can be recommended for DHL in this regard to make its services better and efficient.  The concept of FAS or Free alongside Ship can be implemented in this regard. It means that goods are delivered by the seller when the products are placed outside the vessel. The vessel is nominated by the buyer and the risk of damage to the goods is passed on to him when they are placed on the ship.  (Maloni, Gligor  & Lagoudis, 2016).
Carrier Selection Criteria
The transportation goals and needs of DHL are that it wants to be the logistics company for the world. It aspires to expand its business beyond its current operations in 220 countries. Its target is to expand its capabilities for providing a wide range of activities.
It wants to offer a variety of logistics solutions varying from critical express deliveries to the economical transportation of freight. It targets to deals with the complexity of the global supply chain. Its Strategy 2020 says that it is built on the three pillars of Connect, Focus and Grow (Schroeder, Zilske, Liedtke & Nagel,2012).
It has laid down clear plans and procedures for accomplishing its goals. It has also reassured that its strategy is to be a provider, employer and investment of choice along with contributing to a benefit of the world which is also known to be its ”Living Accountability”.
Its human resources possess a great amount of expertise, talent and know how. DHL is working for tapping the talent of its employees for expansion of its business all over the world. It has introduced its worldwide certified program which is a special training program for the workforce.
It has also aimed to grow itself in new markets and segments, emerging markets and e-commerce markets in particular. Its strategy is to tap and gain market share along with broadening its logistic services so that it can achieve the goals of its Strategy 2020.
Recommendation of the Carrier Selection Criteria for DHL
Following are certain recommendations for selection for carriers for DHL:

Firstly, it is recommended that the carrier should be an active member and have a good reputation amongst local, national, regional, international trade and industry groups.
The carrier should have a specific point of contact for DHL.  The contact should be through an official with an authority to take decisions on behalf of the carrier. He should be able to respond to the queries of DHL along with having a right to handle all the issues related to the matter.
The carrier should be able to provide with a list of its current customers so that the company can enquire about the performance of the carrier (Isaksson & Huge-Brodin, 2013).
The carrier should provide data related to its balance sheet and income statements to the company. The financial department of DHL can utilize the data i.e. short term ratios and long-term ratios for assessing the ability of the carrier. It will assist DHL in making a   financial overview to make significant capital improvements (Golicic, Fugate & Davis, 2012).
It should be assessed if the pricing structure of the carrier aligned with similar transportation providers in the industry. The recent history of the carrier in terms of pricing and rating should also be evaluated by DHL. Besides this, the carrier should also have flexibility in rating based on volume and tenure of contract.
The financing and costing system of the carrier should be easy and flexible to understand and explain. The mechanism should be aligned with the services which are been provided by the carrier.
The billing cycle should be harmonious with the accounts payable process of DHL. It should also provide a discount of payments done before the payment date as well as some option of delayed payments (Chu & Wang, 2012).
The carrier should be innovative and participate in quality initiatives like quality circles and current ISO9000/1/2 certifications.  The ocean carrier should comply with the IMO International Safety Management Code ( ISM).
It should also comply with Document of Compliance (DOC) regarding the shore side operations and Safety Management Certificate (SMC) for all its containers of 500 GRT and above.
The carrier should have a long-term workforce contract. It should have an acceptable history which is devoid of long-term work stoppages, disputes and strikes. The turnover rate of employees should be at or below the average rate of industry (Lai & Cheng,2016). 

Carrier Relationship Management
The transportation goals and needs of DHL are the development of cost-efficient transportation rates along with reducing overheads, total inventory and cost per order processing. The warehouse operations, procedures, layouts and flow should be also be improved (Evangelista, 2017).  
The company intends to establish a two-way relationship with the transportation carrier. For improving the logistic efficiencies, the vendor platform should perform the value-added services like quality inspections, marking and packaging (Meixell & Norbis, 2012). 
It helps in improving the possibilities of errors and speed product flow of source based services through the warehouse. It also aims to assimilate the transportation processes into the warehousing operations and layouts.
It aims to consider outbound and inbound conveyances and queue up the shipment carriers in order to increase the consumer services. In the present era, DHL is the largest logistics company in the world. So, on the basis of its core, it aims to benefit from its financial stability, vast resources and massive buying power (Yang, 2012).  
It has invested in supply chain technology and has a global reach. So, in the area of transportation management, it aims to provide globally standardized, cost-effective and  high quality and innovative solutions.
Besides this, growing consumerism, growing markets, increased need for lean and risk-controlled approaches and blurring sector boundaries have led the company to focus on the market challenges. So, it needs to develop strategies for meeting its present and future needs of supply chain management (DHL International GmbHd, 2018).
Recommendations on type and process of carrier relationship are built by the company
The company shall build a strong relationship with its carriers. When shippers and carriers work together as a team, they must respect the resources and business objectives of their business partners. They should create a win-win partnership which leads to continuous improvements in the efficiency and consumers services.
They must treat the carriers with respect and work with a sense of urgency. DHL must show empathy and treat the carriers professionally and be ready to assist them while they are carrying the load to the destination ( Fransoo & Lee, 2013).
DHL must not cancel the shipments at the last minute may lead to a loss in the business, rather the company should conduct effective discovery and set clarity in its expectations regarding the load and lane levels.  The carrier must also avoid potential issues over the road.
 DHL must offer secured business and growth opportunities. It shall assist in offering desirable and consistent business movements so that the trucks can keep moving around the clock. It must also offer freights which match with the specified needs and growth opportunities from the new and existing business (Govindan, Palaniappan, Zhu & Kannan, 2012).  
The process of building a relationship with the carrier can be explained as under. Firstly, the company shall take the time to gather data from the carrier. It can be related to the preferences relate to modes of transportation by the carrier etc.
Secondly, maintenance of trust and keeping of relationships is important in carrier relationship management. Thirdly, it is crucial for the company to share the growth with the carriers. Fourthly, the company should adopt the Transportation Management System (TMS) to help the business grow and remain updated with the needs of the ever-changing industry ( Aguezzoul, 2014).  
Conclusion:
Hence to conclude, it can be said that DHL is amongst the largest logistic company in the world. It has a global reach and expertizes to benefit its clients as per their requirement. The clients are benefitted from the strategic advantage and capabilities of the company.
References:
Aguezzoul, A. (2014). Third-party logistics selection problem: A literature review on criteria and methods. Omega, 49, 69-78.
Chu, Z. & Wang, Q. (2012). Drivers of relationship quality in logistics outsourcing in China. Journal of Supply Chain Management, 48(3), 78-96.
Datanyze(2018). About DHL . Retrieved 16th November, 2018 from https://www.datanyze.com/market-share/logistics/dhl-market-share
DHL International GmbH  (2018a). INCOTERMS® 2010.Retrieved 16th November, 2018 from https://www.logistics.dhl/sg-en/home/our-divisions/global-forwarding/customer-service/incoterms-2010.html 
DHL International GmbH  (2018b). A Dynamic Global Supply Chain Starts At Your Doorstep. Retrieved 16th November, 2018 from https://www.logistics.dhl/sg-en/home/about-us/global-network.html
DHL International GmbH (2018c). A Year of Change and Innovation. Retrieved 16th November, 2018 from https://www.logistics.dhl/sg-en/home/about-us/our-vision.html 
DHL International GmbH (2018d). Choosing the Perfect Partner. Retrieved 16th November, 2018 from https://www.logistics.dhl/us-en/home/our-divisions/supply-chain/why-us.html 
DHL(2018).  DHL Express Service & Rate Guide 2018 Singapore . Retrieved 16th November, 2018 from https://www.dhl.com.sg/content/dam/downloads/sg/express/shipping/rate_guides/dhl_express_rate_transit_guide_sg_en.pdf 
Evangelista, P. (2017). Information and communication technologies: a key factor in freight transport and logistics. In Training in Logistics and the Freight Transport Industry . UK: Routledge. 29-50.
Fransoo, J. C. & Lee, C. Y. (2013). The critical role of ocean container transport in global supply chain performance. Production and Operations Management, 22(2), 253-268.
Garcia, F. A., Marchetta, M. G. ,Camargo, M., Morel, L., & Forradellas, R. Q. (2012). A framework for measuring logistics performance in the wine industry. International Journal of Production Economics, 135(1), 284-298.
Golicic, S. L., Fugate, B. S. & Davis, D. F. (2012). Examining market information and brand equity through resource?advantage theory: A carrier perspective. Journal of Business Logistics, 33(1), 20-33.
Govindan, K., Palaniappan, M., Zhu, Q. & Kannan, D. (2012). Analysis of third party reverse logistics provider using interpretive structural modeling. International Journal of Production Economics, 140(1), 204-211.
Isaksson, K. & Huge-Brodin, M. (2013). Understanding efficiencies behind logistics service providers’ green offerings. Management Research Review, 36(3), 216-238.
Lai, K. H. & Cheng, T. E. (2016). Just-in-time logistics. UK: Routledge. 1-100.
Meixell, M. J. & Norbis, M. (2012). Integrating carrier selection with supplier selection decisions to improve supply chain security. International Transactions in Operational Research, 19(5), 711-732.
Maloni, M. J., Gligor, D. M. & Lagoudis, I. N. (2016). Linking ocean container carrier capabilities to shipper–carrier relationships: a case study. Maritime Policy & Management, 43(8), 959-975.
Schroeder, S., Zilske, M., Liedtke, G. & Nagel, K. (2012). Towards a multi-agent logistics and commercial transport model: The transport service provider’s view. Procedia-Social and Behavioral Sciences, 39(2012), 649-663.
Vieira, J. G. V., Fransoo, J. C. & Carvalho, C. D. (2015). Freight distribution in megacities: perspectives of shippers, logistics service providers and carriers. Journal of Transport Geography, 46(2015), 46-54.
Yang, C. C. (2012). Assessing the moderating effect of innovation capability on the relationship between logistics service capability and firm performance for ocean freight forwarders. International journal of logistics research and applications, 15(1), 53-69.

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