Silicachem Corporation: Outbound Freight Transport Report Essay examples

1228 Words Nov 26th, 2012 5 Pages
Full-time
MSc in Logistics & Supply Chain Management
2011/12

Freight Transport Assessment

SilicaChem Corporation:
Outbound Freight Transport Report

Jia GUO, Bethie
09/01/12

1. Introduction
This short report recommends the best options of serving the Spanish distributor and the North America customer based on information given. Although cost is the main consideration in the analysis, various other criteria such as service level and transport modal features are also examined. In order to deliver a more comprehensive discussion, weaknesses of the recommended modals are listed, which should be carefully evaluated when further information is available.

2. Serving the Spanish distributor

2.1
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Furthermore, keeping the current transportation modal would eliminate switching cost and ensure the 100% OTIF service is successfully maintained. Moreover, the large volume transport feature of sea freight fits the current supply chain strategy, which emphasis lean manufacturing, EOQ, and full loads supply.

3.2 Weaknesses of sea freight
The main reason for recommending sea freight in this case is its cost advantage, which comes from its significant lower shipment rate. However, sea freight has several weaknesses that decision makers need to be aware of. Firstly, it has a much longer transit time, which falls beyond the 1-2 week lead time required by the end customer. Therefore, high level of inventory in pipeline and warehouse is needed and urgent air freight shipment is necessary. Secondly, various kinds of delays can frequently occur during sea freight transportation, owning to pre-shipment delay, bad weather, or other disturbing factors (Rushton, 2010). Unreliable delivery could add handling, coordinating and back order cost to the supply chain. Lastly, compare to air transportation, sea freight is exposed to more risk of damage, which may require better packaging and thus increases packaging cost (Rushton, 2010).

4. Conclusion
The first part of the report recommends that the intermodal service offered by MacAndrews would be adpoted. As intermodal also possess a series of disadvantages, some other modal

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