Investor Presentaiton
Counting Zeros
Understanding relationships between freight weight, freight value, and mode grounds all other thinking in logistics
SHIPMENT WEIGHT
Tons
Pounds
MODE
Air Freight
Trucking
Rail
Water
0.0001
0.20
0.001
0.01
0.1
1.0
2
20
200
2,000
10
20,000
100
200,000
1,000
2,000,000
10,000
20,000,000
100,000
200,000,000
Air Freight
747 Jet
Parcel Services
LTL Trucking
1 Truck Load
1 Rail Car
50 Trucks
12 Rail Cars
Barge
Unit Train
Small ship
Ocean ship
ā
Understanding Scale and Proportion
Understanding the role of logistics in any given industry starts with
comprehending orders of magnitude of freight weight and volume
The range of shipment sizes literally span nine orders of magnitude, from
0.0001 ton parcels moved by ground or air mail to 100,000+ ton
shipments moved by ocean-going bulk ships
Some modes, have natural ceilings below the floor of other modes
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A 747 cargo jet will carry about as much freight as one rail car
A train of 100 rail cars barely fills a small ship
Container shipping aggregates thousands of smaller shipments of
10 or 20 tons each into ship-sized units
Some commodities, like bulk grain or iron ore, require locations with
direct access to bulk shipping (rail and water) because inefficiency of
transportation by any other mode erases the value of the product itself
Relation to Business Attraction Strategies
Unit cost for transportation increases
Every time a product is touched
Every time a product changes modes, cost increases
The smaller the shipment size
The further the product moves
Seek locate businesses where location allows minimum touches, minimum
mode changes, maximum shipment size, and minimum distance traveled
for both its process inputs and output to customers
The relative value of a cargo correlates strongly to its weight and mode of
transportation. So, air freight efficiency will generally benefit companies
dealing in small, light objects with very high value density ($100's or
$1,000's per pound). Marine freight efficiency will typically deal with
heavy objects with very low value (pennies or dollars per pound).
SEABURY
MARITIME
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