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ISQA 429/529 Winter, 2014. Lee Buddress, Ph.D., C.P.M. Robert Gleason Professor and Director Supply and Logistics Program Portland State University. Class Rules. Questions Yes/No Donuts. Focus of This Class. Supply Chain Management Logistics and Transportation
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ISQA 429/529Winter, 2014 Lee Buddress, Ph.D., C.P.M. Robert Gleason Professor and Director Supply and Logistics Program Portland State University
Class Rules Questions Yes/No Donuts
Focus of This Class • Supply Chain Management • Logistics and Transportation • Inventory and Warehousing • Supply Chain Risk • Logistical Sustainability • Additional Supply Chain Issues
Important Dates in Transportation History • The Age of Sail 1600 to 1850 • The Canal Era 1797 to 1860 • The Railroad Era 1830 to Today • Steamship Era 1830 to 1950 • The Highway Era 1900 to Today • The Diesel Age 1910 to Today • The Age of Air Travel 1920 to Today
Other Important Dates in Transportation • Suez Canal 1869 (1859) • Transcontinental Railroad 1869 (1863) • Panama Railroad 1855 (1850) • Inter Oceanic Line • Panama Canal 1914 (1881) • Transcontinental Highway 1912 (Idea) • Interstate Highway System Still (1956) • Nation’s First Auto Show 1900 (NY)
The Canal Era • 1797 – 1803 Many Small Canals • 1817 – 1825 Erie Canal • 1834 Cleveland to the Ohio River • By 1840, 3000 Miles of Canals • By 1860, Railroads Take Over
The Railroad Era • 1825 First Railroad Test Track in U.S. • 1830 Baltimore and Ohio RR Starts • 1830 to 1860 Large RR Building Boom • East of the Mississippi • 1863 to 1869 Omaha to Sacramento • The Pacific Railroad • First Transcontinental Railroad • 1883 Railroad Time • Standard Times and Time Zones
The Railroad Era • 1882 Atchison, Topeka & Santa Fe • Atchison, Kansas to Los Angeles • 1883 Southern Pacific • New Orleans to Los Angeles • 1883 Northern Pacific • Chicago to Seattle • 1893 Great Northern • St. Paul to Seattle
The Steamship Era • Paddle Wheels • Side Wheels • Screw Propeller Patented in 1835 • John Ericsson and Francis Pettit Smith • Propulsion Fuel Wood or Coal
Diesel Takes Over • Rail and Shipping • More Economical • Cleaner • Fuel Easier to Obtain and Carry
Air Transport • Wright Brothers 1903 • On the Moon 1969 • First Scheduled Passenger Flight 1914 • First 747 Flight 1969 • 2012 Air Passengers 2.9 Billion • 2012 Air Cargo 30 Million MT (est)
A Fast Look at U.S. Logistics Over Last Few Years CSCMP Reports www.cscmp.org
Recent CSCMP Summary Statements • “Capacity (workers, infrastructure and equipment) is not keeping pace with growth in volume.” • “Everybody understands something has to be done about the infrastructure and everybody has to be involved.” • “Our nation’s transportation infrastructure is failing and will not meet our needs in the future.”
Recent CSCMP Summary Statements The economy is showing signs of recovery and it is likely that we will have capacity problems in many areas.
Aviation D+ Bridges C Dams D Drinking Water D- Energy D Haz Waste D Parks And Rec C - Rail C- Roads D Schools D Security I Solid Waste C+ Transit D+ Wastewater D- Waterways D- Need $1.6 Trillion American Society of Civil Engineers 2005 Infrastructure Report Card
Aviation D Bridges C Dams D Drinking Water D- Energy D+ Haz Waste D Inland W ways D- Levees D- Parks And Rec C - Rail C- Roads D- Schools D Security I Solid Waste C+ Transit D Wastewater D- OVERALL D Need $2.2 Trillion American Society of Civil Engineers 2009 Infrastructure Report Card
The Net Results • Infrastructure Deteriorating Faster than Repair • Congestion at All Levels • Difficulty Locating Logistical Capacity • Increased Lead Times • Increased Inventories • Increased Costs • Increased Supply Chain Uncertainty and Risk • We Are Falling Behind Other Countries
Maersk Triple E Class • Size: 1312’ x 194’ • 18, 000 TEU
Panama Canal • Widening and Expansion Due 2015 • New Container Ships Too Large to Fit • New Locks 1200’ x 180’ • Emma Maersk 1302’ x 183’ • 14,000 TEU • Maersk Triple E Class 1312’ x 194’ • 18,000 TEU • Large Bulk Carriers Too Large to Fit
What About Mileage? • Strings may still call LA/Long Beach • On to – say- New Orleans • LA to the Canal 2939 NM • The Canal 48 NM • Canal to Head of Pass 1873 NM • HoP to New Orleans 95 NM • Total LA to NO 5296 NM • Source: Coast Pilot 2013
What About Mileage? • LA to NO: 5296 NM @ 18 Knots • Plus Canal Transit Time • Plus Mississippi Transit Time • Roughly an additional 315 hours • An Additional 13 Days Transit Time
What About Mileage? • Shanghai to LA 5667 NM • Shanghai to Canal 8108 NM • Difference: 2441NM • At 18 Kts = 135 Hours or 5 – 6 Days
What About Mileage? • Train from LA to Chicago: 3-4 Days • Train from NO to Chicago: 2 Days • Faster and Cheaper to Discharge in California and Rail to Midwest or East.
2012 TEU Traffic • 1. Los Angeles 7,940,511 • 2. Long Beach 6,061,091 • 3. New York/New Jersey 5,503,485 • 4. Savannah 2,944,678 • 5. Oakland 2,342,504 • 6. Seattle 2,033,535 • 7. Hampton Roads 1,918,029 • 8. Houston 1,866,450 • Source: American Assn. of Port Authorities
What About Cost? • Canal Toll As of October, 2013 • $74 per TUE • ** Calculated on Total Ship TEU Capacity • Maersk Announces No Canal Use • They Will Use Suez Canal Even Though It Is Longer • Railroads Vow Not to Lose Traffic
So… • To Use the Canal • Much Longer Sea Time • Much Longer Total Transit Time • Expensive Canal • Will There Be A Sea Change? • What About the Northwest Passage? • What About Nicaragua?
