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Network Planning - Network design - Transportation rates

4 important questions on Network Planning - Network design - Transportation rates

What is internal fleet costs?

This concerns the company-owned trucks and the associated costs.

What is external fleet costs?

Two modes of transportation can be distinguished: truckload (TL) and less than truckload (LTL).

How is the transportation mode TL composed?

The TL carriers subdivide the country usually into zones. An important property of the TL cost structure is that it is not symmetric. One way of transportation can be cheaper than the other way around.

How is the transportation mode LTL composed?

In the LTL industry, the rates typically belong to one of three basic types of freight rates: class, exception and commodity:
- The class rates are standard rates that can be found for almost all products or commodities shipped. They are found with the help of a classification tariff that gives each shipment a rating or class. Once rating is established, it is necessary to identify the rate basis number.
- The two other freight rates are specialized rates used to provide either less expensive rates (exception) or commodity-specific rates (commodity).

The question on the page originate from the summary of the following study material:

Designing and Managing the Supply Chain | 9780071270977 | David Simchi Levi

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