Abstract: For the centralization of management,reduction in cost,and  reinforcement of the competitive advantage,the supplier usually concentrates on production and utsources the transportation of products to a Distribution Center. The Distribution Center decides the modes and the time to transport  according to the demand of the retailer.  Hence the supplier, Distribution Center and the retailer form   a two-echelon supply chain system.  This paper considers the economic lot-size problem of   the two-echelon supply chain in which the transportation modes   are characterized by different all-unit quantity discount cost structures.   Several optimality properties are proposed for this problem,  and a polynomial time algorithm is developed for a special case.