case study HDT truck company

Eastern International University
Became Business School
SCLM 429 Transportation and Logistics Management
CASE STUDY 1
Date: December 26, 2014
Student Name: Nguyen Hoang Dung
Student Number: 1132300178
HDT TRUCK COMPANY
Capacity
Using one shift, 2 trucks assembled / day
Maximum: 3trucks/ day for large order of identical trucks
At least 4months backlog of orders
Issue
Received an order of 50 heavy trucks from Saudi Arabia
Deliver on or before July 1, 2003at Port of Doha
Received $172,000/truck in U.S funds FAS at Doha
Production: 50-truck order is scheduled from April 2 - April 29 (2.5trucks/day)
Shipping
Charter from Chicago:
With Nola Pino, charter it for $2,400/day for 30 days ( on May 1)
Loading & Blocking: $40/truck
To Chicago (Railroad Flatcar): $180/truck
Travel Time: 1 day to reach + 1 day to load
Wharfage Charge: $2/foot x 535 feet long x 1 day
Loading & Stowing: $4,000 for 50 trucks=> $80/ truck
Seaway Tolls: $54/truck
Unloading (at Doha): $4,200 for 50 trucks => $84/ truck
Marine insurance: $210 / truck
Ship from Baltimore:
To Baltimore (Railroad Flatcar): 2 trucks/flatcar, $1,792/flatcar
Loading & Blocking: $120/flatcar
Travel Time: 4 days to reach + 3 days to load
Handling at Baltimore: $200/truck
Ocean freight: $1,440/truck + insurance: $150/truck
The comparison of costs
Charter from Chicago
Costs
Vessel
$72,000
Loading & Blocking
$2,000
Railroad Flatcar
$9,000
Wharfage Charge
$1,070
Loading & Stowing
$8,000
Seaway Tolls
$2,700
Unloading (at Doha)
$4,200
Marine insurance
$10,500
Total
$109,470

Ship from Baltimore
Cost
Railroad Flatcar
$44,800
Loading & Blocking
$3,000
Handling
$10,000
Ocean freight
$72,000
Insurance
$7,500
Total
$137,300

The comparison of two routes
Charter from Chicago (Chartered vessel)
The cost is cheaper if we only consider about the transportation cost ($109,470).
We also pay the costs for cash flows considerations.
The order will arrive on May 30th (follow the case: the last week in schedule) and HDT will be paid