Executive Summary
The purpose of this report is to identify the most recommendable transport option through which Bell Oil can use to transport its three special needs from multiple origins to multiple destinations. The report outlines an analysis of the various logistics factors that the refinery considers as the most relevant, cost, transit time, reliability, damage rate, and insurance, with regards to the three needs. After a comprehensive analysis, a combination of option two and the team high-value air ride with security guards was selected as the recommendable transport options.
Introduction
This report presents a compelling recommendation for transporting Bell Oil’s products by taking their nature and location into consideration. Tucker Company Worldwide (TWC) is a global third-generation, family-held corporation that is known for its experience and service in logistics (Tucker Company Worldwide: Delivering value in logistics services, 2019). Therefore, TWC has the capability in terms of both capital and workforce to sufficiently meet Bell Oil’s unique transportation needs. However, the problem is that it is challenging to create a bid that communicates TWC’s values and addresses all of Bell Oil’s practical options while remaining consistent with the company’s core practice.
This is because, in the 3PL industries, there are several factors to consider when developing a recommendation. They include the cost option, reliability, and service when transporting shipments, transit time, insurance, damage rate, and other unique selling propositions, such as the presence of a strong communication channel and feasibility analysis from the trucking company and driver and the practice of forensic dispatching.
Based on these before-mentioned factors, the most suitable recommendation will be that which encompasses a unique competitive advantage since most companies would present the lowest-cost offers that would be attractive to Bell Oil. Therefore, in the case of TWC, the selected recommendation would be the one that emphasizes TWC’s strong communication channel and forensic dispatch practice, in addition to the low-cost offer.
This report is designed to identify and support the most suitable recommendation and alternatives for Bell Oil’s logistical needs. The report begins with a general overview of TWC to orient the reader on the experience and quality of service provided by the company. It is then followed by the analysis of the costs associated with the transportation of Bell Oil’s three different products.
The report is organized into four sections:
- Analysis
- Alternatives
- Recommendation and implementation plan
- Conclusion
Exhibit 1 presents the options for transporting a 67-kilogram gasket from Houston, Texas, to Reading, Pennsylvania. Exhibit 2 provides an illustration of a 102,058-kilogram tank on a 19-axle trailer. Exhibit 3 presents the transport options for shipping a 102,058-kilogram tank from Houston, Texas, to Wilmington, Delaware. Lastly, Exhibit 4 shows the transport options for moving a 90-kilogram computer server from coast to coast.
Analysis
The problem that TWC faced was to come up with a suitable recommendation that adequately addresses all the factors essential to a successful bid – cheap, fast and easy – while at the same time maximizing reliability and customer satisfaction. To facilitate the identification and selection of the most suitable recommendation, it is essential to evaluate the cost implications associated with Bell Oil’s three specific needs.
Ship requirement 1: Transport a 67-kilogram gasket from Houston, Texas, to Reading Pennsylvania
Bell Oil wants to transport a 67-kilogram gasket that was vital for the normal operations of the refinery; hence, even a one-day delay could result in millions of losses for the company. An evaluation of the different shipping options is presented in Exhibit 1. Taking into consideration that Bell Oil had a variety of factors determining the most appropriate solution that would be most applicable in this scenario is available for the same day, transit time, and reliability. This is because they will best minimize delays, thus, preventing the company from making substantive losses. It is essential to note that in this case, the cost of transportation would be void.
Ship requirement 2: Transport a 102,058-kilogram tank from Houston, Texas, to Wilmington, Delaware.
Bell Oil wants to transport a 102,058-kilogram tank from Houston to Wilmington with no special considerations. What matters to the company is that the tank has been transported from one point to another. There are four available transport options through which TWC can use to transport the tank (see Exhibit 2). Therefore, with regards to the set factors (cost, insurance, damage rate, reliability, and transit time), the best option will be that having low-cost implications.
Ship requirement 3: Move a 90-kilogram computer server coast to coast.
Bell Oil intends to move a small but highly valued 90-kilogram computer server that contains sensitive company information from coast to coast. A list of feasible options is presented in Exhibit 4. Concerning the set factors, the most viable solution will be that which has minimal damage rate, is highly reliable, and is insured. The amount of insurance also matters. According to the course concept, insurance coverage is predetermined by the costs associated with the event of a disaster; thus, it is best to select that which is equal to the price of a product. It is essential to note that in this case, factors such as the required time to schedule, impact of weight and dimension on cost, and transit time are regarded as void.
Alternatives
Ship requirement 1: Transport a 67-kilogram gasket from Houston, Texas, to Reading Pennsylvania
The best option would be the airplane charter. This is because it is highly reliable (a percentage of 99.00%), takes the least amount of transit days (0.2 days), and its availability for the same day is 100.0%. These factors are essential for the transportation of a gasket that is exceptionally critical for the refinery’s operation.
Ship requirement 2: Transport a 102,058-kilogram tank from Houston, Texas, to Wilmington, Delaware.
The best option will be that having low-cost implications, which is Option 2, as it has the least cost of $135,000. It entails picking up the tank from the manufacturer and transporting it OTR to the Houston port, after which it is transloaded and barged to the New Castle port in Delaware. Finally, it is then transloaded into a 19-axle trailer and moved OTR to Wilmington. Furthermore, the route used is simple, with a limited likelihood of freight damage, additional costs, and police involvement.
Ship requirement 3: Move a 90-kilogram computer server coast to coast.
Using the team’s high-value air ride with security guards will be the most appropriate solution. This is because most importantly, its insurance coverage is equal to the value of the server, $48,600. Moreover, it has a low likelihood of damage (1.25%) that reduces the probability of the fragile computer server from getting damaged and is highly reliable (98.0%). Lastly, the security guards present help protect sensitive company information.
Recommendation and Implementation Plan
The three available transport options that TWC can use for Bell Oil’s logistics needs include the airplane charter, option two, and the team high-value air ride with security guards. Furthermore, the costs for the team high-value air ride with security guards are unaffected by weight and dimensional changes; this transport option could also be used in transporting the 67-kilogram gasket from Houston, Texas, to Reading Pennsylvania. Bell Oil has allowed for the combination of transportation modes; hence, by combining the option for products 1 and 3, costs will be minimized. Therefore, with regards to the 67-kilogram gasket and the 90-kilogram computer server, Bell Oil will be required to:
- Ensure that schedules are made within 24-48 hours.
- Consider a lead time of 3 days when placing logistics orders.
On the other hand, when it comes to transporting the 102,058-kilogram tank, Bell Point will be required to:
- Factor lead time of 2-3 months.
- Plan for 4 months prior to placing an order.
Action Plan: Transporting Bell Oil’s needs
Conclusion
Providing a cheap, fast, easy transport solution that is reliable and of high quality is essential to both Bell Oil as the customer and TWC as the logistics operator. Taking into consideration the distinctive characteristics of the refinery’s needs, the most recommendable solution is using the option 2 for the 102,058-kilogram tank, and the team high-value air ride with security guards for the 67-kilogram gasket and the 90-kilogram computer server. This is because these implementations are both cost and time-efficient, reliable, and of high quality. Coupled with TWC’s existence of strong communication channels between service providers and customers, market knowledge, and subject expertise, the successful implementation of these recommendations will result in Bell Oil achieving timely service, entering new markets, receiving volume discounts, and having lower overhead costs.
Reference
Tucker Company Worldwide: Delivering value in logistics services. (2019). Newfoundland, UK: Ivey Publishing.
Exhibits
