Principles of TTS logistics

Tremendous flexibility for shipments from one place to another

Today’s huge product variety requires transport-service providers to be extremely flexible. The range of products to be shipped can extend from gravel and oil shipments to consolidated transports of parcels. For this reason, transport-service providers use diverse means of transport and, depending on their focal point and direction, various types of business models.

Groupage transport and full-load transport

Deliveries using groupage and full-load transports

The transport of goods faces a large number of challenges that arise from differing transport distances and times as well as changing geographic conditions. The transport sector has responded to these challenges with a variety of transport systems. These range from road haulage Road transport and rail-freight service Rail-freight transport to pipeline transport Pipeline transport by land, river, sea and air.
In general, transport services can be broken down into full-load and groupage transports. In full-load transports, large quantities of goods are shipped. Here, the load of goods either totally or almost completely fills the means of transport. In groupage transports, on the other hand, several small shipments are consolidated into a collective shipment and then transported.
A typical characteristic of road haulage is the transport of so-called bulk cargo. The transport of such shipments requires special vehicles or special trailers that can haul gravel, sand, coal or oil. One special feature of transport services is the - usually - unavoidable position movements Positioning movement and return movements Return movement . This means the vehicle is not located directly at the dispatch or receiving point. In the worst-case scenario, it must be driven empty to the dispatch point and then empty from the receiving point to its home base.
Groupage transports in road haulage Road transport are called forwarder’s groupage freight. Here, a distinction is drawn between shipments of light goods weighing up to 30 kilograms and LTL Less than truckload weighing up to two tons. In groupage service, the typical goal in the marketplace is delivery within 24 hours. A characteristic of this service is the creation of a triple-link transport chain Transport chain - consisting of a short haul, transshipping at the forwarder’s base, the further shipment by long-distance freight and delivery to the local recipient with another short haul. A particularly efficient form of groupage service is provided by depot or hub-and-spoke networks. In a depot network, an individual region will be covered by a depot with groupage and delivery operations. In hub-and-spoke networks Hub-and-spoke system , individual shipments are transported, usually overnight, from separate regional warehouses to a central transshipping depot - the hub. As a result, sorting activities can be bundled in the hub.

The formation of a supply chain

It generally takes several steps to move a good from its manufacturing site to its usage site - transport, transshipping, storage and further transport. These processes can be described as the “supply chain.” To put it another way, the supply chain is the result of technically and organizationally linked processes in which goods or people are moved from the source to the destination.
Supply chains can have single or multiple links. In a single-link supply chain, the supply and receiving points are connected by uninterrupted shipments or direct service without any switch in the means of transport. In a multi-link supply chain, the means of transport are switched at some point between the supply and receiving points. The formation of a supply chain for the flow of goods must also include the creation of a corresponding documentation chain for the flow of information.

The variety of actors in TTS logistics

The business of TTS logistics is carried out by highly diverse companies. Depending on the area of specialization, these companies’ business models can vary considerably. The most important forms of TTS companies are described in the following section.
A forwarder is a company that organizes the transport of a good but does not carry the shipment itself.
A distinction is drawn between the forwarder and the carrier or hauler. This term can also describe all companies that, as a result of a freight contract, are required to bring a good to a particular destination and to provide it to the recipient. Carriers also include truck-transport companies, inland-waterway carriers, railroad companies and airlines.
Warehouse keepers or warehousing operations store goods on a commercial basis.
This definition of forwarder differs from the word’s meaning in everyday usage. Here, a forwarder is considered to be a company that is in the business of performing transports and of storing goods under certain circumstances as an additional service. The reason for this misunderstanding is that the jobs of forwarder, carrier and warehouse keeper are frequently combined in a company.
Private- or public-sector transshipping companies offer their services to other logistics companies as well as to dispatching businesses. Transshipping companies are involved in operations such as container terminals, air-freight [Air-freight] terminals and parcel rerouting centers.
For reasons of efficiency, so-called logistics centers serve as hubs in supply chains. These hubs combine transport and other logistics services of one or more logistics companies at one commercial center. The most important type of hub is the goods distribution center and the freight traffic center [Freight traffic center].

Recommended reading

Logistiksysteme | Pfohl 2004
Handbook of Logistics and Supply-Chain Management (Handbooks in Transport) | Brewer / Button / Hensher 2001
Netzwerke in der Transportlogistik | Pfohl / Gomm / Hofmann 2003

References

Logistiksysteme | Pfohl 2004 [2] Handbuch der Verkehrslogistik | Buchholz / Clausen / Vastag 1998 [3] Netzwerke in der Transportlogistik | Pfohl / Gomm / Hofmann 2003
Handbuch der Verkehrslogistik | Buchholz / Clausen / Vastag 1998
Netzwerke in der Transportlogistik | Pfohl / Gomm / Hofmann 2003
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