Transportation Management™

Basic Functions, Concepts and Features

Declaration:

I/We hereby declare that this document is based on my/our personal experiences and / or experiences
of my/our team members. To the best of my/our knowledge, this document does not contain any material
that infringes the copyrights of any other individual or organization including the customers of Infosys.

Author : Sishir Kumar Veldhi

Version : 1.0

Target users: Everyone who wish to know basics of Transportation and Transportation Management.

Keywords: Planning and Management Functions, Environment Concepts, Shipping, Routing, Deliveries,

Data Interfaces, Tendering.

Table of Contents

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1. TRANSPORTATION MANAGEMENT – INTRODUCTION ................................................................................... 4

1.1 TRANSPORTATION: ...................................................................................................................................................4

1.2 TRANSPORTATION MANAGEMENT ...............................................................................................................................4

2. BASIC FUNCTIONS OF TRANSPORTATION INDUSTRY: .................................................................................... 4

2.1 PLANNING FUNCTIONS: .............................................................................................................................................4

2.2 MANAGEMENT FUNCTION: ........................................................................................................................................4

3. BUSINESS CONCEPTS OF TRANSPORTATION MANAGEMENT: ........................................................................ 5

3.1 ENVIRONMENTAL CONCEPTS: .....................................................................................................................................5

3.1.1 System Parameters: .....................................................................................................................................5
3.1.2 Distance and Time: .......................................................................................................................................5
3.1.3 Locations: .....................................................................................................................................................5
3.1.4 Commodity: ..................................................................................................................................................5
3.1.5 Statuses: .......................................................................................................................................................5
3.2 SHIPPING REQUIREMENTS: .........................................................................................................................................5
3.3 ORDERS: .................................................................................................................................................................5
3.3.1 Order Status: ................................................................................................................................................5
3.3.2 Splitting Units: ..............................................................................................................................................6
3.3.3 Incomplete Orders: .......................................................................................................................................6
3.4 ITEMS: ...................................................................................................................................................................6
3.5 LOADING AND UNLOADING TIME: ................................................................................................................................6
3.5.1 Loading Method: ..........................................................................................................................................6
3.5.2 Package Types: .............................................................................................................................................6
3.6 ROUTING RULES: ......................................................................................................................................................6
3.7 SERVICE CLASSES: .....................................................................................................................................................6
3.8 DELIVERY TIMES AND APPOINTMENTS: .........................................................................................................................7
3.9 DOCK APPOINTMENTS: ..............................................................................................................................................7
3.10 TIME ZONES: .........................................................................................................................................................7

4. SYSTEM CONCEPTS OF TRANSPORTATION MANAGEMENT: .......................................................................... 7

4.1 BILL OF LADING: MASTER BILLS AND SUB-BILLS:.............................................................................................................7

4.2 PLAN: ....................................................................................................................................................................7
4.3 SCENARIO: ..............................................................................................................................................................8

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 4.4 SCHEDULE NUMBERS: ...............................................................................................................................................8
4.5 DATA INTERFACES:....................................................................................................................................................8
4.6 SHIPMENT AND CALCULATIONS: ..................................................................................................................................8

5. IMPORTANT FEATURES OF THE TRANSPORTATION MANAGEMENT: ............................................................. 9

5.1 ADJUST CARRIER SELECTION BY PERFORMANCE: .............................................................................................................9

5.2 ALTERNATE LOCATION: ..............................................................................................................................................9
5.3 AUTOMATED SOLUTION DEVELOPMENT (ASD): .............................................................................................................9
5.4 AUTOMATIC STATUS UPDATE: ....................................................................................................................................9
5.5 CARRIER COMMITMENT AND AVAILABILITY: .................................................................................................................10
5.6 CROSSDOCKING: .....................................................................................................................................................10
5.7 INTERMODAL FREIGHT MOVEMENT: ..........................................................................................................................10
5.8 ROUTED ORDER INTERFACE OUTPUT MODE (ROI): ......................................................................................................10
5.9 TENDERING METHODS: ...........................................................................................................................................10

6. REFERENCES: ............................................................................................................................................... 10

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1. Transportation Management – Introduction

1.1 Transportation:
“Transportation is a process of moving people or goods from one place to another” For
instance, to travel from one place to another we need transport. In the same way to carry finished
goods we need transport.
The word transportation is derived from Latin word Trans (to carry).
Advantages of Transportation:

 Time Utility – getting the product to the destination in time.

 Space Utility – Utilization of space to carry large volumes of goods at low cost.

1.2 Transportation Management

“Transportation Management is to manage the goods that are ready for delivery to right
place at the right time and in right condition, choosing the right equipment in the right direction”
It is the combination of managing Inbound Transportation and Outbound Transportation.
It manages different levels of areas like:

 Shipment Scheduling
 Routing
 Freight Cost Management
 Shipment Tracking
 Parcel Management

2. Basic Functions of Transportation Industry:

There are two major functions that are supported by Transportation Industry.

2.1 Planning Functions:

For Planning the system makes use of required Freight Movements, Resources
availability and Cost, Operational requirements & Rules and Policies. Transportation performs
the following planning functions.

 Combining both orders and shipments into Loads

 Determining the best shipping mode
 Building the routes to meet delivery time requirements
 Identifying the lowest cost resources to make planned Freight Movements.

2.2 Management Function:

Transportation performs the following management function.
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  Carrier notification and load acceptance
 Plant notification
 Carrier performance tracking
 Freight Payment authorization

3. Business Concepts of Transportation Management:

The basic business concepts of TM that are used by Transport are

3.1 Environmental Concepts:

These are a collection of shipping information required to complete daily operations.
This includes information about
3.1.1 System Parameters: This includes both load-building and dispatching
parameters. Parameters such as trailer type, carriers that are used for specific type of
equipment, layover constraints are also included.
3.1.2 Distance and Time: This information is provided from one shipping point to its
nearest shipping point for routing purposes. You can also define the time zone for a
location that a system uses when it is scheduling.
3.1.3 Locations: These are the points where the goods are picked up or delivered. They
include customer, distribution and locations. Information on service time and unload
rates of the order required are its inputs.
3.1.4 Commodity: This allows us to make use of class rate data when routes decisions
are taken.
3.1.5 Statuses: These are placed on trailer, carrier and order to track consistencies
among shipping locations.

3.2 Shipping Requirements:

These are the individual orders where each order with certain quantity of goods must be
moved from one location to another. These orders can be outbound freight, intermediate
pickups/deliveries, or inbound freights. Transportation generates Trip that has a sequence of
stops and orders associated to each stop. Each trip includes detailed information of dispatch and
return and wait-time occurrences, dispatch times, expected arrival times, planned travel
distances and times between stops.

3.3 Orders:
Transportation’s main input is Orders. It has a single origin/destination pair. Orders
enter into transportation in two ways i.e. by downloading them from your order processing
system by calling Order interface program or by using orders user-view. The information is
divided into three groups.

3.3.1 Order Status: Basically orders go through different processing stages starting
when they are placed and ending when they reach back to the system. Order status

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 shows what has been done to the order. It also has the information on how the order
will be handled in the next subsequent stages.
3.3.2 Splitting Units: It is the process of splitting the order into two or more orders and
each of them is called a split. An order is spitted because of its huge size that cannot
be fit in a full truckload.
3.3.3 Incomplete Orders: We can configure transport to accept or reject incomplete
orders.

3.4 Items:
They are the type of freights that are passed into transport via order interface. Items and
their attributes are defined in the Item Master user-view. Orders that enter into user-view are
entered with commodities. An unlimited number of items can be defined.

3.5 Loading and Unloading Time:

Transportation calculates both loading and unloading time of each order. The rate is
determined by the loading method for the location and the package type of the freight. Then the
quantity of freight is multiplied by rate.
3.5.1 Loading Method: It is used to differentiate how fast a location loads or unloads
freight. It also indicates rates to be used for each location. Example of load classes
would be slow, medium, fast etc.
3.5.2 Package Types: This indicates what method is used to store pallets, slip-sheets
etc. A loading method matched with a package type will determine how quickly
freight can be loaded or unloaded at a stop.

3.6 Routing Rules:

Routing rules are usually not based on costs. The purpose of this is to create loads and
routes when the lowest cost is not the important consideration. Transport develops a low cost
transportation solution based on customer service requirements or rules that include Order
pickup and delivery time windows, Order pickup and delivery time sequence, compatible
equipment to service a location, compatible carriers to service a location etc. Location routing
classification can be done based on loading/unloading priorities, vendor redirection, early
delivery, early pickup, and location level first/last stop. A location routing class is collection of
all routing rules.

3.7 Service Classes:

Service classes are used when a transport is installed. Service class specifies the weekly
schedule for both shipping and receiving hours. Each location has its own operating hours
defined by name of the appropriate service class. It is even possible to set an override service
class. At a particular scenario transport will use override service class instead of individual
locations service class.

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 3.8 Delivery Times and Appointments:
An order’s delivery time is decided based on its appointment time or earliest and latest-
delivery time. If the order has both of them, then the appointment time is used by default. If an
order has only the appointment time, then the earliest and latest delivery time is defined as
follows
Early Delivery Time = Appointment time – Appointment Range Early
Latest Delivery Time = Appointment Time + Appointment Range Early

3.9 Dock Appointments:

For each load we have a Dock Appointment time. And these are sent through Routed
Order Interface. In this case Delivery appointments are not related to Dock appointments.

3.10 Time Zones:

To schedule a delivery using the local time, transport needs to know the time zone. Every
location is assigned to a time zone according to its ZIP code. Each time zone has a code and an
offset value. This offset value is the difference in hours from the base time zone.

3.11 Parcel and Express Carriers:

The shipment of small packages through parcel and express carriers is known as parcel
carriers. Package carriers offer multi-level services like one-day delivery, two-day delivery and
so on. Some package carries change their rates on the type of delivery i.e. either commercial or
residential. Transport supports rate discounts for package carriers.

4. System Concepts of Transportation Management:

The basic system concepts of TM that are used by Transport are

4.1 Bill of Lading: Master Bills and Sub-Bills:

Transport provides data to the downstream system to generate Bill of lading (BOL)
for each location. BOL is based on Truck Load (TL) and Lower than Truck Load (LTL). TL
will have the master bills, pool-bills and sub-bills for each delivery stop whereas LTL will
have only the pool-bills and sub-bills of the destination stop. BOL numbers are assigned when
the freight moments are saved to database. It is in the format of XXXYYYYYYYYZ where
XXX is Source Identifier (default is ‘000’), YYYYYYYY is number generated by oracle for
uniqueness and Z is (M=Master bill, S=Sub bill, P=Pool bill).

4.2 Plan:
Here we create a case by filling the daily plan and store the plan definitions in the
database and execute by using Case Build Function. The plan includes information about the
Orders that include Carrier resources availability, Scenario Parameters values and Start date
and time. The orders that are scheduled in the plan are determined by horizon and load start
dates, schedule number, order group, delivery and departure horizon dates. Order before the

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 horizon can also be included in the plan but remain unscheduled unless they are the part of
rolled load.

4.3 Scenario:
This is the combination of rules that are used for solving case. These are set by
transportation planners and several times they are reused. For example, if we set one scenario
for weekdays deliveries and another scenario for weekend deliveries that will enable us to set
two separate groups providing a way to adjust the amount of traffic that we have in weekdays
and weekends. The system can automatically update the delivery and departure horizons to
account for Saturdays and Sundays when pickups are not allowed.

4.4 Schedule Numbers:

These are used by transport to distinguish different groups of orders. Each order
entered onto transport has a schedule number. All the orders with the schedule numbers are
processed together in load consolidating, routing and scheduling. Schedule numbers are
allocated based on the distribution center of the orders.

4.5 Data Interfaces:

Transport has many data interfaces with in the processing systems. Each interface
will provide a link that has important information for generating quality schedules of each
shipping location. Interfaces include both Planning and Execution interfaces. Planning
interface involve Generic, Carrier, Carrier response, Distance, Item master, Location, Order,
Rates, Shipment status, Routed orders whereas execution interface involve Tenders, Freight
Payment Accruals ( FP Accruals ), FP update check, FP Customer billing, FP Account
maintenance, FP invoice, FP shipment actuals, FP Vendor maintenance, FP vouchers.
Here, Location Interface will provide the information of new and available or
modified information of vendors/Customers to the shipping locations. This is the most
important interface because this updates the information of location database with active
information.
In Order Interface it provides the shipping requirements like quantity, availability
and delivery. The system uses this information for planning decisions.
In Carrier Interface it provides the information of all the carriers that will be
added automatically.
The Routed Order Interface is the output of the Planning process. It provides the
information that is required for generating pickups and tendering the load to the carrier. This
interface contains the information of the order in terms of Carrier, Bill of Lading, Loading
sequence and Trailer type.
We can load or unload data into or outward from database using Generic
Interface.

4.6 Shipment and Calculations:

When LTL, parcels and express shipments are created it calculates departure and
arrival times for the shipments. Each shipment has a slack time and buffer time which are used
in the Trailer building logic and acceptance of loads. The departure times are also used by

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 trailer building module to determine which shipment has overlapping departure windows and
place them on the same trailer.

5. Important Features of the Transportation Management:

The most important features of the transport are

5.1 Adjust Carrier Selection by Performance:

This feature will help transport to consider both cost and performance when selecting
TL and LTL carriers. Carriers that provide consistent good service that can be weighted will
compete against low cost and less desirable service. These weights are assigned based on
performance rating. The better performers will have their costs adjusted down and the poor
performers will have their costs up. To make use of this feature we must define carrier rating
categories and specify a rating for each TL and LTL lane.

5.2 Alternate Location:

An alternate location feature will help us to identify a single location with several
different location IDs. For example if a building has only one unloading dock. Different
departments in the building, all from different locations will use the same dock. This feature
will associate the same dock to all the departments from different locations. Then the system
will know that orders from different departments are going to the same location. Orders
received from order interface are automatically routed to alternate locations. The original
location ID is then added to the orders.
This concept applies to only outbound destinations and inbound sources.

5.3 Automated Solution Development (ASD):

This feature will enable transport to split orders, ship orders together, build, solve
and save a case to the database and then run the Routed order Interface without the involvement
of the users. We can also run custom scripts as a part of ASD. This process can be triggered to
run, for the completion of a large download of orders. Even ASD can be triggered manually
from the Userview-Process. The main functions of ASD are
 Programs can be configured to run automatically.
 Program can be triggered to run at the present time or after the completion of
the download of Orders.
 Programs can be run at specific schedules.
ASD’s are triggered from the ASD transaction coming through Order Interface.

5.4 Automatic Status Update:

This feature will provide the update of each Order and Shipment details based on
the transportation mode set. And this is set through Configuration User-view. The Problem
solver will also provide a global on/off switch for auto-status.

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 5.5 Carrier Commitment and Availability:
This feature enables load to the vehicles based on their availability and
commitment. Here Carrier commitment is the minimum number of vehicles promised to the
shipper and Carrier availability is the maximum number of vehicles available for a particular
lane. The transportation solution uses minimum number of vehicles promised but not exceeds
the maximum number for that particular lane.

5.6 Crossdocking:
This feature is an intermediate freight point. Once the load reaches this point,
it is unloaded and then stored for a time period and then it is loaded back into another trailer
and at last it reaches the destination. This feature as two parts: 1. To-Crossdock trips and From-
Crossdock trips. Here the To-Crossdock – Delivery can occur at any point of the trip whereas
the From-Crossdock – Pickup must the starting point of the trip.

5.7 Intermodal Freight Movement:

This feature involves both Truck and Rail to complete its service. Instead of
loading and unloading the shipments in various modes of transport these shipments are loaded
at the origin in the same trailer and then moved in various modes and then finally it reaches
the destination. Usually this feature will consume time and is cheaper mode of transport. For
example a load traveling on road-way may take 4 days to reach the destination with around
$1.00 per mile, if the same load is transported with Intermodal, it may take around 6 days to
reach the destination with $0.70 per mile. If the shipment lead time is feasible with another 2
days then the shipper can save around 25% using this mode of transport.

5.8 Routed Order Interface Output Mode (ROI):

This feature has two different modes. The first is Comprehensive Modes and
the second is Transaction Modes. In Comprehensive mode all the loads and shipments will
meet the selection criteria whereas transaction mode is the interface to send, modify or delete
the loads and shipments that were sent previously in addition to the new orders. This feature is
an optional and admin decides whether to use Comprehensive mode or transaction mode.

5.9 Tendering Methods:

This feature helps in tendering the loads by specifying the carrier the
means of tendering i.e., the tendering should be sent by EDI or FAX. We can select any like
EDI, FAX, both or neither. This Information is sent to the ROI.

6. References:
1. www.dot.ca.gov – Transportation Management Plan Guidelines
2. http://en.wikipedia.org – Transportation _Management System
3. www.planning.dot.gov – The Transportation Planning Process

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 4. www.ops.fhwa.dot.gov – Developing and Implementing Transportation Management
Plan
5. www.townofchapelhill.org – Guide for Transportation Management Plan Development
6. www.tdot.state.tn.us – Transportation Management Plan Workbook

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