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FACULTY:FACULTY OF BUSINESS AND MANAGEMENTCOURSE CODE:TPTCOURSE TITLE:FUNDAMENTALS OF TRANSPORTREPORT ON INDIVIDUAL ASSIGNMENT (A)PREPARED BY:NOR ATIQAH SYAZWINA BINTI ANUARMATRICS NUMBER:2018231208GROUP:KBA1114EPREPARED FOR:MADAM SHAKIRAH BINTI MOHD SAADSUBMISSION DATE:22 MAY 2020TABLE OF CONTENT C...

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FACULTY: FACULTY OF BUSINESS AND MANAGEMENT COURSE CODE: TPT250 COURSE TITLE: FUNDAMENTALS OF TRANSPORT

REPORT ON INDIVIDUAL ASSIGNMENT (A)

PREPARED BY: NOR ATIQAH SYAZWINA BINTI ANUAR MATRICS NUMBER: 2018231208 GROUP: KBA1114E PREPARED FOR: MADAM SHAKIRAH BINTI MOHD SAAD SUBMISSION DATE: 22 MAY 2020

TABLE OF CONTENT

NO. 1.

2.

3.

4.

CONTENT Chapter 1 

Company background



Economic concept and derived demand

6.

1 1-2

Chapter 2 

The ways



Terminals and facilities



Motive power

3



Unit of carriage

3

2 2-3

Chapter 3 

Transport modal

3-4



Traffic

4-5



Service characteristic of transport

5

Chapter 5 

5.

PAGE NO.

Material handling equipment and unit load concept

6-7

Chapter 6 

Ownership

7



Cost of services

7



Regulations and regulatory bodies

8



Network-point of origin and destination coverage

8

Chapter 7 & 8 

Logistic process

9



IT system helps the operation

9



Problem faced, impacts and improvement suggestion

10

CHAPTER 1

a) Company background FedEx Corporation is an American multinational delivery services company. FedEx Corporation headquarter is located in Memphis, Tennessee and most synonym with overnight shipping services. Frederick W. Smith founded the company in 1971 as Federal Express Corporation. The company pioneered a system that could track packages and give real-time updates on location of packages. Now, this feature has been implemented by almost all other carrier services. FedEx Corporation operates across Europe, the Middle East, Africa, Asia Pacific and America. FedEx office is located throughout more than 2,150 location across the world. FedEx Corporation has created job opportunity for more than 475,000 of its team members. For the year 2019 alone, the corporation has made an annual revenue of $69.7 billion. FedEx Corporation has contributed to the increase in national income by providing job opportunities and payment of its corporate tax. FedEx also contributes to the linkage of marketplace across the world by providing worldwide shipping and delivery services. It also contributed to the increase in economic trade by enabling two-way transfer of goods between countries especially for countries with surplus commodities. This allows consumers to be able to enjoy goods that are previously inaccessible to them. Thus, increasing the standard of living. b) Economic utility concept and demand derived term The creation of four kinds of economic utility is essentially included in transport. Utility refers to the usefulness or ability to provide satisfaction. FedEx Corporation creates place utility when goods are available where they can be consumed. This means that FedEx helps consumer access commodities that can’t be found at their location. This will increase the value of goods because goods that are not at the place where they are needed have less value. For example, Village A that is located by the sea produces 100 kg of fish every week but only produces 5 kg of fresh vegetables per week. The value of the fishes are lower than the vegetables because the vegetables are more needed than the fish because the output of vegetables is scarce. FedEx also creates time utility which happens when the goods ordered by the customers are arrived at the required time. Therefore, time utility is created by ensuring that the goods arrived in a secured and timely manner. Not only that, FedEx also make sure that the goods will arrive in the right form. This is called form utility which can be observed when goods arrived in good condition after a long journey or in the right quantity as needed. For perishable goods such as foods, they 1

are delivered in a refrigerated freight. Possession utility is created when ownership of the goods is transferred to the customer. This happen when the customers accepted the goods delivered.

CHAPTER 2

a) The ways Way or often called route is a medium that a transport mode use to go from one place to another. FedEx Corporation uses two ways in its freight transportation. The first way is natural way which is through the air and the sea. Usually, FedEx uses natural ways to ship goods internationally or for long distances. Air shipments are faster than shipments through sea but it cost more. Thus, to reduce cost, heavy and bulk goods are shipped through the sea. On the other hand, artificial ways are used to deliver goods inside the country or for short distances. Artificial ways are man-made way such as road and railways. FedEx uses both road and railways to deliver goods. Railways are used to transport the goods from the collection centres to the distribution centres. Meanwhile, road transport is mainly used to distribute the goods to the consumers but it also used to transport the good to distribution centres. b) Terminal and facilities Terminal is a place where interchange facilities are provided for the transfer of passengers or freight from one mode to another mode or between vehicles of the same mode. FedEx operates a network of 360 terminals. Terminals provide the necessary infrastructure and equipment for the transfer of passengers or goods to take place as economically, quickly and safely as possible. Some terminals allows access to vehicles operating on a specialized way. For example, airports have runways for take-off and landing that aircrafts requires. Terminal also permit easy transfer between same or different mode of transport. FedEx terminals permits interchange of goods between both different mode of transport and same mode of transport. Interchange between different modes of transport happens when goods that were transported through sea, air and railway mode of transport where interchanged to road mode of transport and vice versa. This interchange usually happens at the seaports, airports and railway terminals.

2

FedEx Corporation provides a system which let their customers keep track of the real time location of their goods. This ensure the customers can see the progress of their shipment process. To track the location of the goods, the customers simply need to enter the tracking number in the FedEx package tracking system that is linked in their website.

c) Motive power Motive power is the source of energy used to produce power to run the vehicle. There are several types of motive power such as biogas, hydrogen, electricity, hybrid, fossil fuel and more. FedEx uses fossil fuel as their motive power. To run their aircrafts, jet fuel are used while diesel are used to powers their trucks. d) Unit of carriage Unit of carriage relates to the requirements of a particular class of traffic moving on a particular way, powered by particular method of propulsion, across a particular pattern of interface. A vehicle must provide its own propulsion unless it is pulled by a cable or muscle-power. The propulsion is usually obtain through a steam engine, combustion engine, electric motor, a jet engine or a rocket. The vehicle also need a system to convert the energy into movement of which is commonly done through wheels, propellers and pressure. The efficiency of the mode of transport depends to some extent on the flexibility and the adaptability of unit of carriage used.

CHAPTER 3

a) Transport modals Modals means the mode of transport which is a term used to distinguish different ways to perform transport. FedEx Corporation uses all four modes of transport which are air, road, rail and water transport. Air transport’s advantages lays on its high speed, quick services and lack of physical. Its high speed means that people and goods can easily move from one place to another for both short and long distances hence saving time. It is true especially for high priority goods that is required urgently. Air transport provides comfortable, efficient and quick transport services and is the best mode of transport for perishable goods. The lack of physical barriers allows it to follow the shortest and direct routes in which there are no obstacles in its path. Air transport’s quick custom formalities clearance and easy access to areas inaccessible by other modes of transport also contributes to the 3

advantages of air transport. It is also the most suitable for carrying perishable goods that demands for quick delivery and light goods of high value such as diamonds and bullion over long distances. Road transport implies the transportation on the road concerning different types of transport such as bicycles, motorcycles, cars, lorries and large trucks for carrying passengers and goods. Through road transport, FedEx provide door to door services where the goods will be delivered to the addresses provided by the customers. Thus, the customers does not need to go and pick up their goods themselves. Road transport have flexible services where the timings can be adjusted and changed to individual requirements. For example, FedEx customer can choose whether they want their goods to be delivered the next-business-day delivery at 8.00 am or in the next 1 to 5 days. Road transport is suitable for short and medium distance as it is more economical and quicker. It also virtually can transport any kind of product since there is lesser risk of damage and breakage of goods in transit. Thus, it is most suitable for transporting delicate and fragile goods like chinaware and glassware. Rail transport is a means of movement of passengers and goods using wheeled vehicles running on railway tracks. Rail transport is dependable because it not easily affected by the weather unless there is a heavy flood in the areas near the railways that can cause in to stop operating. Rail transport have fixed routes and schedule with more uniform and regular service. It is also cheaper compared to other modes of transport as most of its working expenses are fixed cost in nature. Rail transport is suitable for transporting heavy and bulk goods over long distance. It also have a larger and elastic capacity. The capacity can be increased by adding more wagons. Rail transport is also advantageous in terms of its safety. Although negligence and technical errors induced accidents and breakdown can still happen, they are minimum compared to other modes of transport. Moreover, the traffic can be protected from the exposure to sun, rains, snow, etc. Water transport refers to the movement of goods and passengers on waterways by using various units of carriage like boats, steamers, launches, ships, etc. There are two types of water transport which are inland water transport and sea transport. Inland water transport happens within the country. Rivers and canals facilitates the movement of boats, launches, barges, streamers and etc. that carried goods and people. Sea transport refers to the movement of goods and passengers with the help of ships through sea or ocean waterways and can be further categorize into two types. The first is coastal shipping in which the ships ply between the main ports of the country and the second is overseas shipping of which is used mainly for international trade. b) Traffic characteristic

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Traffic can be seen from the perspective of the aggregate of freight, passengers, etc. being handled in a given period. The two types of traffic are passenger traffics and freight traffics. FedEx Corporation uses passenger traffic in their organization. The characteristics of goods or freight traffic are firstly, the types of goods. For instance, the goods delivered can be solid, liquid or gaseous. Some are fragile, volatile and perishable. The goods can also be dead or livestock. Secondly, the variety of shapes of the goods in which can come in all sorts of different sizes, density and weights. The handling equipment is the last characteristic of freight traffic. Certain types and shapes of goods requires special handling equipment and vehicles. For example, perishable goods such as flowers needs to be transported in refrigerated vehicle to ensure its freshness. c) Service characteristics of transport The first service characteristic of a transport is affordability. The cost of transport needs to be affordable and reasonable to ensure customers willingness to pay it. If the charge is too high the customer will be reluctant to pay and might look for other alternatives. The second service characteristic is safety. Customer demands that the goods received is undamaged and not broken. Thus, good transport companies will take several measures to ensure the safety of the goods. FedEx for instance, will transport perishable goods such as foods and flowers in a refrigerated freight to ensure the freshness is maintained. For fragile goods such as chinaware and glassware, FedEx will wrap the in protective bubble sheets and labelled as fragile to inform the handler that the goods needs to be handle with care. Security is the third characteristic of service. Security in travel and delivery of goods is an important consideration as it will influence the user’s preference for various mode of transport. The fourth characteristic is speed as different mode of transport have different speed. The customer need to the right mode of transport to make sure that the goods that is to be delivered arrives at the right time as required. If the goods is needed urgently, air transport is the best option as it is the fastest mode of transport. Another service characteristic is regularity. Transport operator faces difficulties in providing regular transport services to new residential areas. This is because they have yet familiarize themselves with the layout of the residential areas. The next service characteristic is capacity. Transport companies face challenges to meet the high demand during peak hours. During holiday seasons, FedEx needs to deliver several times more packages compared to their daily delivery during normal times. This puts a lot of pressure on the delivery men to meet their quotas.

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CHAPTER 5

Material handling equipment and unit loads concepts

FedEx use multiple type of equipment to handle the materials. FedEx uses forklift to load and unload the bigger and bulk packages from storage to the trucks and vice versa. Conveyors, on the other hand is used for the smaller and lighter packages. Cranes and hoists are also used to move heavy and bulk goods especially goods in containers. Auxiliary equipment such as barcode readers, palletizes, and stretch wrappers are also used. Barcode readers are used to scan the barcode throughout the process of shipment to keep track on the packages location and shipment stages status. Pallets are used to enable bulk goods to be lifted without damaging the goods itself as the pallet act as a protection. Stretch wrappers are used to ease the task of wrapping the goods with a few layer of plastic wrap. The plastic wrap is a form of protection against the weather and dust. The type of unit load present in FedEx operation are pallet, truck, and container.

6

CHAPTER 6

a) Form ownership FedEx Corporation is a public limited company which is under Limited Liability Company (LLC). In limited liability companies, the shareholders will only be liable to the debt accrued by the company according to their investment level. This will make the shareholders feel secured investing in the company. The law deems limited company as a legal entity exists independent from its owners. Even if the members retires or dies, the company will continue to exist and operate. Thus, ensuring the security of the employees and the other members. 7

b) Cost of services The cost of FedEx international shipping cost is rated according to the origin country, destination country and the mode of transport. For air transport, the surcharge for shipments for goods that is to be shipped between China and other Asian Pacific Countries (APC) is $ 1.00 per kilogram. While the surcharge for shipments from all other regions or countries to China, other APC and other regions or country is $ 0.22 per kilogram. However, shipments from China to other regions or countries cost $ 2.00 per kilogram. c) Regulations/regulatory bodies involved in operations One of the regulatory bodies involved in the operation of FedEx Corporation is the customs and border protection department. Before entering or leaving a country, the shipments need to pass the customs first. This is to ensure that there are no smuggling of illegal goods or goods that does not meet the safety standards being transported. The customs and border protection department of each country have their own regulation that might differ from others. FedEx also complies with the Food and Drugs Administration regulations for shipment of food, drugs and cosmetics d) Network-point of origin and destination coverage (geographical and times) FedEx Corporation covers shipment across Europe, the Middle East, Africa, Asia Pacific and America. FedEx service days are every business day, from Monday to Friday. Service on Saturday is available in some markets upon request. Shipment for urgent goods are done 24 hours a day and 365 days a year. The delivery time takes between 1 to 5 working days depending on the type of shipping service chosen.

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CHAPTER 7 AND 8

a) Logistic process

Request for shipment

Customer

Ord

Order management system

Shipment is picked up from customer's dock

FedEx Cross Dock Facility

Com shipment from multiple shippers

Shipper facility

Consignees' deliveries are made according to scheduled appointments End Customer

b) How the IT system help the operation in the company. IT system helps FedEx operation by allowing them to keep track on the real-time location of their shipment. This help them to monitor if there is any problem during the shipment. If there is a problem and the shipments are delayed, they can take corrective measures and inform their customers about the delay. With IT system, FedEx no longer needs to manually record the customers’ order thus saves time. The system will automatically process and categorize the orders. Each orders will be given a barcode that will be scanned throughout the delivery process to keep track of its location. This helps them to manage their inventories better. IT system also helps FedEx provide a better service as the customers’ enquiry about the location of the goods can be answered precisely. Not only that, IT system allows FedEx to have a wider market as they can connect with potential customers all around the world through their website.

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c) Problems or challenges faced, its impact to the society, economic and environment and suggestion for improvements. One of the problem that FedEx is facing is customers expects to receive their goods quicker but they are unwilling to pay more for it. It will indirectly pollutes the air since FedEx needs to deploy more vehicles to delivers the goods faster. The engines of these vehicles emits harmful gases such as carbon monoxide, nitrous oxide and more in high concentration. These toxic gases not only endanger the environment. It is also harmful to humans and animals. The carbon monoxide emitted can cause carbon monoxide poisoning. It combines with haemoglobin to produce carboxyhemoglobin that will prevent transportation of oxygen. Meanwhile, the airborne particles causes cardiovascular issues and other health issues. High concentration of carbon dioxide c...