LOGISTICS AND SUPPLY CHAIN MANAGEMENT PROGRAM

Course:
INTERNATIONAL TRANSPORTATION & LOGISTICS
Preparation for Final Test

Lecturer: Assoc. Prof. Dr. Ho Thi Thu Hoa 1

 Contents
1. Chapter 5: Third Party Logistics
2. Chapter 6: Global Transportation-Incoterms
3. Chapter 7: Transportation Risk Management
4. Chapter 8: Transportation Planning: Supply and Demand
5. Chapter 9: Route choice and static assignment
6. Chapter 10: Network design

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References
1. Coyle, John J., Robert A. Novack, Brian J. Gibson (2016), Transportation A global supply chain perspective,
8th edition. South-Western Cengage, Boston. (Core book)
2. E. Cascetta (2009), Transportations systems analysis: models and applications. Springer
3. Bowersox, Donald J., Closs, David J., Cooper M. Bixby, and Bowersox, John C, Supply Chain Logistics
Management, 4th edition, McGraw-Hill/Irwin, Burr Ridge.
4. Christopher, M. (2011), Logistics & supply chain management, 4th ed, FT Prentice Hall: Harlow
5. Alan Harrison and et. (2014), Logistics management and strategy competing through the supply chain (fifth
edition), Pearson
6. Thorben Seiler (2012), Operative Transportation Planning Solutions in Consumer Goods Supply Chains.
Springer
7. Rodrigue, J-P., Comitos, C., Slack, B. (2013) The Geography of Transport Systems, 3rd ed, Routledge:
Albington
https://www.researchgate.net/publication/318837359_The_Geography_of_Transport_Systems
/link/5a979fca0f7e9ba42974dece/download

Cited from Dr Nguyen Van Hop: Teaching materials for INTERNATIONAL TRANSPORTATION & LOGISTICS

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 Structure of Final Test

1. Question 1: (20 points)

2. Question 2: (20 points)
3. Question 3: (30 points)
4. Question 4: (30 points)

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 Contents
Chapter 5: Third Party Logistics

1. Outsourced Logistics Providers

2. Overview of the 3PL Industry
3. Overview of 3PL Users
4. Establishing and Managing 3PL
Relationships
5. Strategic Needs of 3PL Users

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Chapter 5: Third Party Logistics

• Primary Types of 3PLs services, example of services

and logistics service providers doing business in
Vietnam market

• Establishing and Managing 3PL Relationships: process

and detail steps, examples

• Logistics outsourcing: pros and cons

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 Contents
Chapter 6: Global Transportation-Incoterms

1. Overview of Global Transportation

2. Global Transportation Planning - Incoterms
3. Global Transportation Execution
4. Issues and Challenges for Global Supply
Chains

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Chapter 6: Global Transportation-Incoterms

• Understand, explain and apply Incoterms 2020 for a specific

case/shipment, eg:
1. Select appropriate modes of transport should be used?
2. Which terms should exporter (seller) buy cargo insurance?
3. Which terms should importer (buyer) buy cargo insurance?
4. Which terms are inappropriate for container goods?
5. According to the above cost table, calculate the total cost which are
paid by the Seller and the Buyer in each term? (Cargo insurance, you
explain which term, seller and buyer must or should be in charge)
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 Incoterms 2020: structure Incoterms 2010: structure
+ Sea & IWT: FOB, FAS, CIF, CFR. + Sea & IWT: FOB, FAS, CIF, CFR.
+ All modes of transport: EXW, FCA, CPT, + All modes of transport: EXW, FCA,
CIP, DPU, DAP, DDP CPT, CIP, DAT, DAP, DDP
+ DPU: only term requires the seller to
unload goods at destination

 “E”- term
 “E”- term
 EXW Ex Works
 EXW Ex Works
 “F”- terms
 “F”- terms
 FCA Free Carrier  FCA Free Carrier

 FAS Free Along Ship  FAS Free Along Ship

 FOB Free On Board  FOB Free On Board

 “C”- term  “C”- term
 CFR Cost and Freight  CFR Cost and Freight
 CIF Cost, Insurance and Freight  CIF Cost, Insurance and Freight

 CPT Carriage Paid To  CPT Carriage Paid To

 CIP Carriage and Insurance Paid to
 CIP Carriage and Insurance Paid to
 “D”- terms
 “D”- terms
 DAT Delivery at Terminal
 DAP Delivery at Place
 DAP Delivery at Place
 DPU Delivered at place unloaded
 DDP Delivered Duty Paid
 DDP Delivered duty paid
PGS. TS. Hồ Thị Thu Hòa 9
Chapter 7: Transportation Risk Management

Understand and know how to apply into practice:

1. The Concept and role of Risk management
2. The Basic Risk Types
3. Transportation Risk Management Process and
Techniques
4. Security Regulations and Initiatives

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Risk Management Process (Student have to read more detail for
each step of this process from teaching materials)

 Determine the potential  Evaluate the likelihood

transportation and impact of each
disruptions disruption
1 Identify 2 Analyze

4 Review 3 Manage
 Monitor and  Apply risk
update the plan, management and
identify new risks mitigation strategies
 Risk Matrix

R (Risk) = C (Consequence) x L (Likelihood)

Assoc. Prof. Dr Ho Thi Thu Hoa 12

Table 1: Consequence Score (C)

Assoc. Prof. Dr Ho Thi Thu Hoa 13

Table 2: Likelihood Score (L)

Assoc. Prof. Dr Ho Thi Thu Hoa 14

Table 3: Risk Grading Matrix

Assoc. Prof. Dr Ho Thi Thu Hoa 15

Risk Grading Matrix…

…will give a scored risk rating of either:

Low – Green => acceptable

Moderate – Orange (Amber?) => acceptable with mitigation
High – Red => unacceptable
Extremely High – Purple => unacceptable

Assoc. Prof. Dr Ho Thi Thu Hoa 16

 • You are provided the following Risk case 1 Risk case2 Risk case3 Risk case4

table from ABA logistics

Probability 15% 27% 69% 85%
Financial 2 000 3 850 40 250 117 000
company which includes detail loss (USD)

information of 4 risk cases: Budget

(USD)
250 000 350 000 1 150 000 2 250 000

Business 1 hours 5 hours 24 hours 2 days

interruption

Questions:
A/ Identify location for the risk cases on risk grading matrix.
B/ Assess risk rating according to 4 levels (Low, Moderate, High and Extremely High) and
suggest consideration level for reducing or mitigating risk.

Assoc. Prof. Dr Ho Thi Thu Hoa 17

• A/ Identify location for the risk cases on risk grading matrix.
• R (Risk) = C (Consequence) x L (Likelihood) (5 mks)
• - From probability, we can identify likelihood score
• - From Financial loss and budget, we can calculate financial loss
consequence
• - From financial loss consequence and Business interruption, we can
identify consequence score

Assoc. Prof. Dr Ho Thi Thu Hoa 18

 Case 1 Case 2 Case 3 Case 4
Probability 15% 27% 69% 85%
Likelyhood score Unlikely Possible Likely Almost certain
Financial loss 0.8% budget 1.1% budget 3.5% budget 5.2% budget
consequence(=Financial
loss/budget*100%)

Financial loss (USD) 2 000 3 850 40 250 117 000

Budget (USD) 250 000 350 000 1150 000 2 250 000
Business interruption 1 hours 5 hours 24 hours 2 days
Consequence Minor Moderate Major Catastrophic

Assoc. Prof. Dr Ho Thi Thu Hoa 19

 Risk Grading Matrix
Consequence

Risk assessment 1 2 3 4 5

Insignificant Minor Moderate Major Catastrophic

(Không đáng kể) (Ít) (Trung bình) (Nghiêm trọng) (Thảm khốc)
1. Rare (hiếm khi)
<9%
2. Unlikely (ít khi) Case 1
10-24% (green)
3. Possible (thỉnh
Case 2
thỏang)
Likelihood (orange)
25-49%
4. Likely (dễ xảy ra) Case 3
50-74% (red)
5. Almost certain
Case 4
(thường xuyên)
(Purple)
75-100%
Assoc. Prof. Dr Ho Thi Thu Hoa 20
B/ Assess risk rating according to 4 levels (Low,
Moderate, High and Extremely High) and suggest
consideration level for reducing or mitigating risk.

Assoc. Prof. Dr Ho Thi Thu Hoa 21

Risk Grading Matrix…

…will give a scored risk rating of either:

Low – Green => acceptable

Moderate – Orange (Amber?) => acceptable with mitigation
High – Red => unacceptable
Extremely High – Purple => unacceptable

Assoc. Prof. Dr Ho Thi Thu Hoa 22

Chapter 8: Transportation Planning: Supply and Demand

Understand and know how to apply into practice:

1. Transportation Supply
2. Transportation Demand
3. Port planning (core part)

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 Transport network and accessibility
Accessibility is the measure of the
capacity of a location to be reached by, or 1. Accessibility
to reach different locations. Therefore, the
capacity and the arrangement of

# of locations
transport infrastructure are key elements 1
A 1
in the determination of accessibility.
2
2
Distance
(A) Uniform distribution
(B) Clustering in central area. 1
(C) Clustering in periphery. B
1 2
2

Source: Rodrigue, J-P et al. (2018) The 1

1
Geography of Transport Systems, Hofstra C 2
University, Department of Global Studies &
Geography. 2

Assoc. Prof. Dr. Ho Thi Thu Hoa 24

 Transport network and accessibility

2. Connectivity

Connectivity: where a network is represented as a connectivity matrix (C1),

which expresses the connectivity of each node with its adjacent nodes.

A basic network
connectivity Connectivity Matrix
Network
A B C D E
A B A 0 1 1 1 0
C B 1 0 1 0 0
C 1 1 0 1 1
E D 1 0 1 0 0
D
E 0 0 1 0 0

Source: Rodrigue, J-P et al. (2018) The Geography of Transport Systems, Hofstra University,
Department of Global Studies & Geography.
Assoc. Prof. Dr. Ho Thi Thu Hoa 25
 Transport network and accessibility
Geographic accessibility: considers
that the accessibility of a location is the 3. Geographic accessibility
summation of all distances between other
A B C D E
locations divided by the number of L A 0 8 4 9 15
locations. The lower its value, the more a
location is accessible. 8 B
B 8 0 7 12 18
A C 4 7 0 5 11
+Under this method, the location with 7 D 9 12 5 0 6
4
the shortest total distance to other C E 15 18 11 6 0
locations will have the highest D
5 E Eg: Based on the information given in below
geographical access index. 6 figure, please assess the geographical
+ C? accessibility of places A, B, C, D and E
A(G)
A B C D E  /n
A 0 8 4 9 15 7.2
B 8 0 7 12 18 9.0
C 4 7 0 5 11 5.4
Source: Rodrigue, J-P et al. (2018) The Geography
of Transport Systems, Hofstra University, D 9 12 5 0 6 6.4
Department of Global Studies & Geography. E 15 18 11 6 0 10.0
 /n 7.2 9.0 5.4 6.4 10.0 38.0

Assoc. Prof. Dr. Ho Thi Thu Hoa 26

 Transport network and accessibility
4. Potential accessibility: Potential accessibility is a more complex measure than geographic accessibility,
since it includes simultaneously the concept of distance weighted by the attributes of a location. All locations are
not equal and thus some are more important than others.

L P
A B C D E
1200
8 B 900 A 0 8 4 9 15 A 1200
A
B 8 0 7 12 18 B 900
4 7
C 600 C 4 7 0 5 11 C 1500
1500 D D 9 12 5 0 6
5 E 800 D 600
6 E 15 18 11 6 0
E 800
A(P) = potential accessibility matrix.
dij = distance between place i and j (derived from valued graph matrix).
Pj = attributes of place j, such as its population, retailing surface, parking
space, etc.
n = number of locations.

Source: Rodrigue, J-P et al. (2018) The Geography of Transport Systems, Hofstra University,
Department of Global Studies & Geography.
Assoc. Prof. Dr. Ho Thi Thu Hoa 27
 Transport network and accessibility

Higher value: higher potential accessibility

i\j A B C D E ∑i
A 1200.0 150.0 300.0 133.3 80.0 1863.3 Emissiveness: row
B 112.5 900.0 128.6 75.0 50.0 1266.1
C 375.0 214.3 1500.0 300.0 136.4 2525.7
D 66.6 50.0 120.0 600.0 100.0 936.6
E 53.3 44.4 72.7 133.3 800.0 1103.7
∑j 1807.4 1358.7 2121.3 1241.6 1166.4 7695.4

Attractiveness: column

Source: Rodrigue, J-P et al. (2018) The Geography of Transport Systems, Hofstra University,
Department of Global Studies & Geography.
Assoc. Prof. Dr. Ho Thi Thu Hoa 28
Chapter 9: Route choice and static assignment

1. Route Choice Models

2. Assignment with Implicit
Path Enumeration
3. Cases (core)

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• Understand how to apply the theory into practice to
select the appropriate route for a specific shipment

• What information will you need from your customers

to issue the transport documents for the shipment

• The function and classification of B/L

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Chapter 10: Network design

1. Transportation Supply
Design Problem
2. Models for Road Network
Layout Design
3. Models for Road Network
Capacity Design

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• Diffused network. An extended service would be characterized by low frequencies and smaller
shipments, resulting in high rates on many segments of the network. This is particularly the
case for peripheral nodes.
• Centralized network. A centralized network structure (right side) has less links and a
consolidation of flows at hubs. It results in lower rates on several segments that have a higher
frequency of service, notably those between hubs. The peripheral nodes have less direct
connections, but are subject to lower rates.

Source: Rodrigue, J-P., Comitos, C., Slack, B. (2013 32

Good luck for Final Test!

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