1. Using the information presented in this chapter, what changes would you suggest to Jim?
Jim, on the advice of Stacey, may proceed with a number of changes such as the use of relay terminals, sleeper teams or break-bulk terminals to reduce the time its drivers are on the road. With the help of relay terminals, Jim’s drivers would stay within the limit of 10 hours’ time while sleeper teams would enable drivers to relax while other teams may be driving the carrier through the route. Use of break-bulk terminals would further allow unloading entire trailers at a break-bulk facility instead of a single customer’s destination (Coyle, Bardi & Novack, 2006).
2. How would you suggest he present this scenario to the president of Hardee?
What are the arguments in favor of the federal government providing financial support to the U.S. Airlines?
Arguments in favor of the federal government providing financial support to the US airlines are to bring out this one of the favored transport systems from financial turbulences and make it affordable for the common man. Also, due to September terrorist attacks, public was afraid of flying which was tried to be reduced from financial as well as regulatory support from federal government which represents increased public safety. Air transport is crucial to US economy as well as national security; hence financial support is quintessential to keep the companies running.
What are the arguments against the federal government providing financial support to the U.S. Airlines?
The federal government supporting US airlines may be misinterpreted by the public as wastage of money. Public may also think that the government should try to stop terrorism which is the root cause instead of bailing out US airlines and carriers by investing tax payers’ hard-earned money.
If federal financial assistance is provided, then should the air carrier and/or flying public be expected to repay the government? If so, what form of repayment would you suggest? Why?
If federal financial assistance is provided, the flying public needs to repay the government in the form of increased rates or taxes since the government has saved US airlines from bankruptcy and other financial troubles. Maintaining the sustainability of air network is the duty of the federal government in which public money as well as federal savings is invested. To maintain this repository, public may need to pay taxes at a higher rate and even air carriers pay the government in the form of agreement or loan interests for bailing them out.
JEI may communicate the pressure of market competition and the need to incorporate intermodal operations to the union. It may convince them that it will be on a prototype basis and no major lay-off would take place. JEI Corporation may also enter into a few intermodal contracts to demonstrate how efficient the operations turn with this new process in place.
What strategies could JEI use to remain competitive if the union still restricts the use of intermodal operations?
JEI may endeavor to reduce its variable cost and high labor and fuel costs to remain cost efficient and competitive. It may also discuss with union as to how to remain operating in the market without resorting to intermodal operations.
3. Do you think that having union employees is an advantage or a disadvantage for JEI? Why or why not?
For JEI, union employees at the moment are serving to be disadvantageous because they are opposing the introduction of intermodal operation for the fear of losing jobs and other insecurities. However, intermodal operations are the need of the hour for JEI because of increased market competition and it has to be resorted to, sooner or later.
1. What are the advantages and disadvantages of such a joint-service offering?
A joint-service offering between a railroad and warehousing company provides significant synergistic benefits in the form of economies of scale, shared knowledge, technological expertise development and increase in clientage. However, such a joint-service may also lead to encroaching into one another’s clientele and losing significant market share to the other player.
2. What special challenges will Young and Patterson face?
Combining the terms of agreement for the usage of routes, division of clients and sharing of technology as well as equipment use will be the major challenges that Young and Patterson will face if they proceed with this joint-service offering.
1. What is your evaluation of Southwest Airlines as it stands today?
Southwest Airlines is a pioneer in low-cost business model in airline industry. With immense focus on people, it had strategized on the intangible aspects of working and had tried to retain its employees as well as customers through increased satisfaction, loyalty and retention. However, at the moment, the low cost model is no longer unique to it and as such; it needs to diversify to impact its bottom line in a positive and profitable manner.
2. What changes, if any, would you recommend to help keep it competitive and profitable?
With ever increasing fuel and labor costs, the recipe to sustained success still lies in its ‘employees come first’ philosophy. This is because the current era is customer-driven and unless and until an organization has full control over market demands and users’ unmet needs, it cannot sustain profits. With positive experience building for its employees, Southwest ensures that it has a real-time market research program running on at its front end which keeps it updated on latest demands and trends. Thus, while employee and customer retention rates improve, costs of holding them are reduced and it is reflected in the form of better profits, reputational asset building and industry leadership.
3. What difficulties would a new entrant to this low cost market likely face? If you wanted to start an airline and compete with Southwest, how would you do it?
Offering low cost means providing additional benefits in kind which is also a part of capital building in the form of customer service, service scape, intangible service properties, etc. which may not be available with new entrants. Secondly, it is a matter of synergies within the industry which is not easily achieved by a new entrant. If I wanted to start an airline, I would probably not compete on low cost but on quality dimensions which comes at premium pricing and is a different market altogether to target.
What are some of the logistics and supply chain issues that GLBC should consider?
Some of the logistics and supply chain issues that GLBC should consider pertain to environmental concerns, special routes that these container ships may need or where to unload the container if it breaks up in the middle of the route.
Based on what you know; what recommendation would you make to the GLBC Board of Directors regarding a container ship operation?
Regarding a container ship operation, the GLBC board of Directors should first assess the market demand and self-capabilities in this regard because this market as well as the routes to conduct container ship operation is highly regulated. Further, due to increased fuel and labor costs, economies of scale in this operation may be difficult to achieve in the beginning.
Why does SGF use so many carriers? Can it operate with a smaller number of carriers?
SGF uses so many carriers because of seasonality embedded in its operations. Its production facilities are working only 5 months a year and most of its sales happen during December which increases the load enormously. Hence, smaller number of carriers would not be sufficient to handle this much of pressure during peak seasons.
Do you see opportunities for freight consolidation and piggyback?
At the moment, SGF has no explicit opportunity for freight consolidation or piggyback because its current transport model is serving it right and to implement the opportunities, it first needs to develop the correct infrastructure and put competent people in place. Even the seniors are skeptical of exploiting the opportunities; hence, proper planning and risk assessment is needed before SGF can go with freight consolidation or piggyback.
Reference
Coyle, J.J., Bardi, E.J., & Novack, R.A., (2006). Transportation, 6th Ed. Cengage Learning
