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FEEDBACK TUTORIAL LETTER 

 

 

   ASSIGNMENT 1 

 

 

                               SEMESTER 1 ‐ 2018 

 

 

 

               OPERATIONS TRANSPORT MANAGEMENT     

                                     [OTM611S]

   

 

 

Feedback Tutorial 1

Operational Transport Management (OTM611S)

Assignment 1

Dear students

Thank you for the effort and congratulations in completing your first assignment for this

semester.

There are still students that do not follow instructions, all assignments should be TYPED, some

students handed in assignment that are hand written and are really not legible, and this

makes the marking very difficult. I am aware that some of you might have experience

difficulties or challenges; please try be all means to submit typed assignments. There are also

students whom did not include the table of contents; introduction; title on the cover page;

page numbers; conclusion and references. These students have lost marks allocated to these

aspects. A comprehensive assignment report should cover all these sections.

Remarks on Assignment 1: The biggest problem is that students are not referencing (in text

referencing) their work. Please purchase the APA referencing guide from the Library, this

document can be used as a guide as you are referencing your assignments. Please note that

if you are given a case study assignment, you should it carefully and analyse phrases that give

you a hint on the problem experienced and the opportunity that an organization can explore

to improve its current situation. You need to use the theory you have learnt in the module

and apply it to the case study. You should also give practical examples relating to the case

study. It does not help to give examples relating to the products or companies not discussed

in the case study, while having the opportunity to use the scenario already presented to you

in the case study.

This is academic dishonesty and totally unacceptable. The Namibia University of Science and

Technology therefore does not condone any form of academic dishonesty, including

plagiarism and cheating on tests and assessments, amongst other such practices. The Namibia

University of Science and Technology requires students to always do their own assignments

and to produce their own academic work, unless given a group assignment.

All forms of academic dishonesty are viewed as misconduct under the Namibia University of

Science and Technology Student Rules and Regulations. Students who make themselves guilty

of academic dishonesty will be brought before a Disciplinary Committee and may be

suspended from studying for a certain time or may be expelled. All students who are found

guilty of academic dishonesty shall have an appropriate endorsement on their academic

record, which will never be erased.

Question 1.4, of the assignment requires you to be practical. You supposed to mention the

airlines and documents that should accompany the product lines as they are shipped from

suppliers to the Development Group Company. Please also be guided by the marks allocated

per question when answering questions. Most of the students also did not align the case

study to the modes of transport. Instead of discussing the advantages and disadvantages of

each mode of transport, you supposed to highlight how Development Group Company can

benefit from using a certain mode of transport.

There are students who did not answer question two, and as a result they lost marks assigned

to this question. Please make sure you read your assignment carefully before attempting to

answer any question. And also, be guided by the marks allocated per question when

answering questions.

Best regards,

Question 1

1.1. Discuss the relationship between transport and the modern society. 10 Marks

The movement of people, goods and information is essential to economic and social

accomplishments of productions and manufacturing, distributions, goods consumptions,

commuting and supplying of energy.

Each of this movement has a source place of departure, intermediaries’ location and place

of destination, this requires an efficient transport system with good infrastructure and the

right modes of transportation.

• Modern society: improve social welfare through appropriate social, political and

economic conditions in terms of human capital (e.g. income and education levels) as

well as physical capital such infrastructures (utilities, transport, telecommunications).

• The functions of transport activities underline the complex relationship between its

physical and human capital needs

• The movement of people and freight and levels of convenience are at the core of this

relationship.

• Transport system allows movement of people, animals, goods and services and afford

access to markets and resources.

1.2. Why is transport needed? 20

Marks

Trade: transport is a means of balancing the source with demand and use

Transport facilitates the movement of raw materials and finished products between

the countries

Transport create time and place utility

Economic function of transportation (trade)

The earth is a planet gifted with abundant non-homogeneous natural resources, each

location blessed with different climate, soil and fertility (Gubbins, 2003). It is because of

this variations in natural habitat that some areas are more efficient in growing certain

crops, mine certain commodities and fish certain type of fish than others. Thus we all

depend on various types of goods and services from all over the world to sustain our daily

lives, this necessitated the need of exchanging all sorts of products and service, natural

resources and movement of people from all over the world, and transport facilitated such

economic exchanges. In order for societies to fulfil their ever changing demands there is

an immense requirement of transporting resources from one particular society to other.

This resources can be goods, natural resource, knowledge and skills etc.

The link with the market place: factories can be located where production is most

efficient

Transport caters for economies of scale and local optimization

Social interaction: promote social relationships in the communities

Transport promote social development and welfare of human beings. It helps people

to have access to basic needs and services such as schools, hospitals, employments,

sport recreation, cultural events etc.

The formation of urban society is highly influenced by transportation which are

clearly seen in the formation of cities, their size, patterns and the development of

societies, especially urban towns or districts.

Take an example of the Windhoek city, in the beginning settlement of the city

inhabitants were proximal to the city centre and other major institutions such as

banks, when the city grew beyond normal walking distance, then transportation

technology played a role in the formation of the now developed Windhoek city. As

people migrated to Windhoek, the city grew in population and developed onto a big

city and major trade centre.

In order to match the new lifestyle, new transport ways were found for inhabitants

to travel to and from work and round abounds, the increased speed of transport and

reduction in the cost of transport, new public transport and construction of paved

road network etc. In today’s world people are no longer confined to geographical

area, but they are moving abroad to find better living conditions, study opportunities

or for touring and recreational purposes. Transport is required to enhance social

interactions and social development.

National cohesion: efficient transport links are vital for state security and identity.

A nation is held together by the way in which separate communities are linked to a

common purpose

Political process and national identity are enhanced by the ability of policy makers and

leaders to travel to different parts of a country.

Transportation plays an important role in the functioning of political activities, an

efficient transport links are important for state security and identity. An efficient

administration of a country largely depends on how effectively government could

communicate information and movements of people and goods country wide. E.g.

rapid movement of troops in case of emergency depends on a good transportation

system hence the political decision of construction and maintenance of roads has

resulted in the development of transportation system. Regarding political role, large

areas can now be governed very easily with the help of good transportation system.

1.3. Explain the role of the transport policy and discuss what constitute the transport

policy? 10 Marks

The role of the transportation policy.

• Transport can pose as a threat to National security- Policies are established to

initiate authority and/or to ensure control over national space and borders.

• Transport affects public safety and the environment- policies are established for

control purpose such as requiring driving licenses, limiting the hours of work of

drivers, imposing equipment standards, establishing speed limits, mandating

highway codes, seat belts and other accident controls.

• Monopolistic tendencies- Policies put in place to control market dominance to

ensure public interest are protected

• Limit foreign ownership- to protect national interest

What constitute the transport policy?

To what extend must railway services for both passengers and freight traffic be

provided in a nation? The level of national support for railways will affect the

provision of other modes of transport services.

How much do you think the infrastructure for road transportation in towns and on

route between towns should be put in place? This deals with the effects of

congestions, pollutions and the efficiency of the national distributions system.

The levels of provision for public transport services in urban and rural areas? One

will observe the differences in distribution of public transport services in various

regions which in some cases might be seen as unfair.

At what price should the public transport services be provided at? The level of public

financial support dictate this price unlike the private sector where demand and

supply dictates price.

What is the relations between land utilization and transport activities and

infrastructure? The relations is used in making transport policy.

The transport policy also has policy instruments that influence development and

operation of the transport sector.

Source: Rodrigue (2017)

1.4. Short case study

Development Group is Retail Company operating in Namibia. It offers four different products line to its customers. Products line that are offered by Development Group include the jewellery line (necklaces, earrings, rings, pendants and bracelets, etc.) supplied by American Jewellery Company situated at 3200 21st Street Suite 500 Bakersfield, CA 93301. The second product line that they offer to customers is food namely, fruits, vegetable, marathon sugar and the supplier is in Cape Town, South Africa. The third product line CC is offering to its customers is Clothing line and the supplier is in Shenzhen, China. CC also operates a service station a shell service station in Windhoek, and all petroleum products they sell is sourced from South Africa. Development Group does its own transportation services. Over the past three years, the Development Group has experienced high transportation costs. The Managing Director has approached you to advise them with regards to transportation of each product line.

You are required to assess the features and criteria of each mode of transport and advise the Development Group on which mode of transportation to use per product line item and why?

In your advice, please be specific at to which route of transportation should be taken per product line, the shipping line or company and justify your answer. 40 Marks

NB: more than one mode of transportation (intermodal transport) can be used in a route.

a) Jewellery product line

The development group should transport the jewellery product line through the following intermodal transport

Firstly the DG company should hire a third party logistics company in Bakersfield, America located near the suppliers of Jewellery such as express Delivery or America Express Delivery (please refer to the figure 1 below) to pick up the goods from American Jewellery Company situated at 3200 21st Street Suite 500 Bakersfield, CA 93301 via road transport to the nearest international airport, (which is Bakersfield) with the flight connecting to Namibia (please refer to the figure 2 below). The third party logistics should use road transport to Bakersfield (BFL) international airport, and load the jewelleries fleets into united express airline, which will take one hour and 22 minutes (1.22 Hours) to reach San Francisco Airport. The fleets will be load into the Lufthansa Airline to connect to Frankfurt airport a flight that takes 10.25 hours, and thereafter the goods will are loaded into Condor Flugdienst airline or Air Namibia from Frankfurt to Hosea Kutako International Airport (HKIA) in Windhoek. This flight takes approximately 11.20 hours. The Development Group Company can then collect the Jewellery at the HKIA in Windhoek or hire companies like DHL for customs clearance and deliver them at their door.

Figure 1: Third Party logistics companies in Bakersfield

Figure 2: Flight details from Bakersfield, America to Windhoek, Namibia.

Hence two modes of transport are used, namely Road transport – Air Transport – Road Transport.

The documents that should accompany the goods include the tax invoice, clearly stating the international commercial terms of the business transactions as agreed by the buyer, seller and the shipper to indicate when the risks and ownership shift among these partners during the transportation period. A bill of lading also accompany the goods. BOL is a legal document between a shipper and a carrier that details the type, quantity and destination of the goods being carried. The bill of lading also serves as a shipment receipt when the carrier delivers the goods at the predetermined destination

Development Group will benefit from shipping jewelleries using intermodal transport that involve air transport because, air transport is very fast & convenient, the weight of the jewellery is low and charges could be affordable comparing to sea transport, since it is very slow and not reliable.

B) Food product line

Development group can make use of the road transport mode to ship the food products from Cape Town South Africa to Namibia. Food products like vegetables and fruits are perishable in nature and they should be handled with care. The vehicle transporting the fruits and vegetables should have a temperature controlled equipment to ensure that the goods are not spoiled. It may take approximately 3-5 days to deliver the goods in Windhoek from Cape Town, and the vehicle may be delayed at the border for customs clearance depending on the queue. Development Group can make use of companies like FP Du Toit, SBS Trucking, Wes Bank Transport etc.

Road Transport is reliable, as it offers door to door services, thought costs may be high hence Development Group needs to ensure that they have enough safety stock to guard the company against stock out, since the shipper will consolidate different orders to ensure full utilisation of the vehicle which may take longer. Food product line shipping will also be accompanied by the documents such as tax invoice and bill of landing.

C) The Clothing line

Development Bank can ship the clothing product line from their supplier in China and the

supplier is in Shenzhen, China. Development Group should hire Shenzhen Top Way

International Forwarding Company Limited., a freight forwarder based in Shenzhen, China

that will gather clothing products from their suppliers in China consolidate cargo in their

warehouse and ship the load from China to Namibia.

As rail transportation mode in China plays an important role for long distance inland

transport, Shenzhen Top Way International Forwarding Company Limited will use a freight

speed train to transport the clothing products from Suppliers in Shenzhen to their warehouse

for consolidation into a larger load to fill the Forty Footer Equivalent (FEU) for transportation

via sea to Namibia.

Intermodal transport involving Rail transportation, Sea transportation and road

Transportation method

There are only two types of international shipping mode, which are air and sea transportation

mode. The factors that determine the choice of using one of these modes are cost, reliability,

speed, volume versus weight, infrastructure conditions and environmental impact.

Clothing would form part of the general cargos on which transportation of movement is

quoted in dollars per unit of weight, and transport charges are quoted per hundredweight

(CWT), therefore high density weight allows fixed cost to be spread across more weight. The

combination of weight and volume placed high emphasis on economy of density. The first

argument supporting sea transportation method it to reduce transportation cost, benefiting

from the economy of scale as a result of economy of density. The freight forwarder hired by

Development Group will ship the load in a Forty-Foot Equivalent (TEUs) achieved by

consolidation similar goods from several suppliers in China into large general cargoes into a

container terminal passing through or with a final destination of Namibia.

The second argument supporting sea transport mode is that Development Group would like

to reduce cost hence air transportation is not a suitable method for the volumetric clothing

products that needs to be transported from suppliers in China. Air transport would be an

expensive mode of transportation even though faster and reliable than sea transportation

mode. DG is currently experiencing high costs and would like to reduce these costs. Air

transportation method will not rescue Delopment Group poor financial performance but

further deepen the situation. According to Bowersox, Closs, Cooper and Bowersox, (2013) the

capability to transport large tonnage at low variable cost places sea transport in demand

when low freight rates are desired and speed of transit is a secondary consideration.

According to Pienaar and Vogt, (2009) the typical strength of sea transport that encourage

the choice of this mode:

A low-cost can be supplied as large volumes of high density freight can be conveyed

over long distances.

Standard intermodal containers can be utilized to facilitate freight handling and

transhipments.

Traffic congestion is virtually non–existent on the open sea.

Sea transport offers a very safe and secure service.

Rail transportation

The capability to efficiently transport large tonnage over long distance is the main reason

railroads continue to handle significant intercity tonnage (Bowersox et al, 2013). China has a

well-developed and excellent railway system. The first argument supporting rail

transportation method is that it is cheaper and more energy efficiently in Shenzhen. Secondly

a freight speed train is faster. Thirdly, the flexibility of rail infrastructures that allow businesses

to reduce the transhipment costs and expedite shipping times by using containers which are

easily moved from one mode to another, i.e. ability to transfer from rail to motor carrier and

cargo carrier. Lastly, Shenzhen Top Way International Forwarding Company limited is located

close to a railhead; therefore it is cost-effective to use the railroad to get freight to the

warehouse as well as to port of Shenzhen.

The typical strength of Rail transport that yield good results in China includes:

According to the freight forwarder rail transport generally cost less than road freight

transport over long haul.

Rail transport is less affected by increment weather conditions than other modes.

Rail wagons cannot be easily hijacked or stolen as road vehicles.

Rail transport is cost and energy-efficient when the carrying capacity is fully utilized.

Road Transport

Firstly, Road Transport is used because of its ability and flexibility to deliver the goods from

the railway station or port of arrival to their final destination and vise-versa. Hence there is

door to door services as road is not limited to a fixed route or fixed terminals. Consignments

can be conveyed directly from a shipper to a receiver without the need for special attention.

Secondary, deliveries are prompt especially in Namibia as road carriers can deliver in

Windhoek, hence accessibility is high. Thirdly, because of the ability to supply door to door

service, there is little handling and few transhipments taking place between the port of Walvis

Bay and the Development Group based in Windhoek. There is freight protection as feeding/

collection and line hauling are often not necessary.

Besides the convenient service of road transport, there are challenges that will affect the

delivery services, namely:

Shared right of way: the right of way is shared with other traffic, which increases safety

and security risks and the occurrence of unexpected delays.

Vulnerability to external factors: increment weather conditions and traffic congestion

can impact on reliability and punctuality of road transportation.

The freight forwarders could avoid the peak times when traffic congestion is usually high; and

also schedule convenient delivery times putting in consideration the weather forecast of the

operating schedule and towns to deal with challenges.

Port facilities to be used

A Box Truck will also pick up the clothing from the supplier, Shenzhen in China to Shenzhen

Top Way International Forwarding Company Limited’s warehouse. The consolidated load

will be transported via the high speed train from Shenzhen north railway station via Luohu

railway station to the port of Shenzhen.

Exit ports

The container terminal will exit China through the port of Shenzhen directly to Namibia via

the port of Walvis Bay. The transit will take 22 days and 17 hours, travelling. The liner shipping

is Maersk line. Figure 3 shows the sea route from port of Shenzhen, China to port of Walvis

Bay, Namibia.

Figure 3 Sea route from Port of Shenzhen, China to Port of Walvis Bay, Namibia.

D) Petroleum Products

Development Group can ship the petroleum products via intermodal transportation

involving the rail transport mode. Development Group can use Trans-Oranje Corridor, is

complemented by a railway line from the Port of Lüderitz extending southwards to the

Northern Cape Province via Upington. The company can use the rail transportation from

South Africa to Windhoek. The rail transportation would be effective because it carries bulk

commodities at once on cheaper rate. The shipping line will be TransNamib.

Question 2

Visit any of the public authority or public corporation of your choice in the transport sector of Namibia and write a report on their operation, which should include the following points: Students are advised to choose companies of the choice within the six modes of transport, namely, rail, air, sea, road, pipeline, and telecommunication modes that are in Namibia. These companies include and not limited to the following Roads Authority, TransNamib, NamWater, Telecom Namibia, CRAN, RCC, NRSC, NamPort, Air Namibia, Namibia Air Port Company, MVA,

a) Legislation governing the company 4 Marks

Figure 4: Legislation in the Namibian Transport Sector

b) Mandate of the company 5 Marks This depends on the company chosen by the student.

c) The structure of work, systems and people 5 Marks The structure of the transport company may be different but influenced by the following, hence students should include these points in their discussion.

i. Organization as an entity, e.g. transport company • Composed of people • Have a distinct purpose • Degree of structure

ii. Organization as a process: structuring of work, systems and people. • Divide work among people • Specifying business objectives • Determine the activities and making decisions to accomplish them.

d) The theory school of organization applied in the company 6 Marks

The theory of an organization may be based on the following three schools. Students need to include these schools in their discussions.

Classical school

Behaviour School

The System School Sub-total: 20 Marks

Total: 100 Marks

References

Bowersox, D. J., Closs, D. J., Cooper, M. B. Bowersox, J. C. (2013). Supply Chain Logistics

Management (4th ed) . New York: McGraw- Hill

Coyle., J. J. Novack., R. A., Gibson, B. J. & Bardi, E. J.(2013). Management of Transportation

(7th Ed.). United States: South-Western Cengage Learning.

Gubbins, E. J. (2003). Managing transport operations. Kogan Page Publishers.

Rodrigue, J. (2017), The Geography of Transport Systems. New York: Routledge, 440 pages.

ISBN 978-1138669574

Pienaar, W. J., & Vogt, J. J. (2009). Business logistics management: a supply chain

perspective (3rd Ed.). Cape Town: Oxford University Press.

Song, D., & Panayides, P. M. (2012). Maritime Logistics: A complete guide to effective

shipping and port management. United States: Kogan Page Limited.