The mode of transportation you use is an important decision when planning your freight shipping process. Several factors go into choosing your most convenient and cost-effective mode of transport, you must consider the costs, the urgency of the shipment, the value of your goods as well as the size and weight of the goods being shipped need to be evaluated before determining the method of transportation. In this article, Stockwell International wants to help you determine and understand, which mode is best to transport your cargo and freight!
Seaborne trade accounts for around 90% of global trade, 1687 million tons (2015 estimation) were carried in around 177.6 million containers (2015 estimation) covering 998 billion ton-miles (2016 estimation), per UNCTAD.
There are several varieties of goods that cannot (or should not) use other methods of transport than sea because of size or volume. Ocean freight is less expensive, but the downside is a long travel time. An advantage of ocean freight is that size is not typically an issue, whereas it is for air transport.
Ocean freight is utilized significantly for the movement of bulk goods for example agricultural products, coal, iron ore or crude oil and petroleum. Larger, odd-shaped cargo like engines or propellers tend to move via sea as well, varying on how urgent the delivery time is. Ocean freight is also used to transport high-volume and heavy cargo such as minerals, metals, ores, steel coils, etc. which would be impractical to move by air freight.
In recent years, businesses are now highlighting the emphasis of the impact shipping has on the environment. Air freight produces a higher amount of polluting gases with less space capacity compared to sea freight. According to the International Maritime Organization (IMO) 2020, ocean freight is the more eco-friendly of the two.
Key benefits of ocean freight include:
- Suitable for a wide range of products with long lead times
- Large volumes: a single, ultra-large container ship can carry +/-20,000 twenty-foot equivalent units (TEU)
- Most environmentally friendly among all modes of transport
- Liner shipping is the most economical and efficient mode of transport for goods
- Extensive coverage around the world
- Multiple carrier options for the shippers
Over the next 15 years, as the world GDP grows, there will be a demand for higher-value goods. As per a world air cargo forecast, there will be a proportionate growth in the value per ton of total traded goods around the world. To meet the demand for growth, world air cargo traffic is forecasted to grow an average of 4.2 percent per year.
Air freight is a critical mode of transport. It serves markets and supply chains that demand speed. As we saw during the pandemic, when vessels slowed down, businesses turned to air freight for their import needs. Space diminished so quickly that air freight was then only limited to essential cargo such as medical items.
Another great example of this was in 1997 when Apple started innovating on the details of supply-chain management. At the time, most computer manufacturers moved cargo by sea, a far cheaper option than air freight.
Steve Jobs took advantage of air freight and used an advanced strategy. He spent $50 million to buy the available holiday air freight space as insurance that the company’s new iMacs would be available during the Christmas season, giving them a huge advantage over their competitors.
Other industries such as the automotive and retail industry also utilize air freight to ship ‘just-in-time’ (JIT) for inventory stocking. JIT allows retailers and manufacturing lines to place order fulfillment based on demand. It provides greater flexibility and reduces inventory and storage costs.
Due to COVID-19, as companies look to different locations for goods, an influx in the pandemic stocking of inventory changed the way we look at JIT inventory replenishment.
Perishable goods like foods, flowers, and pharmaceuticals also tend to use air freight to take advantage of shorter transit time. Another bonus for air freight is that there’s less handling of cargo and therefore less product damage.
Of course, air freight also has its drawbacks. For starters, it’s one of the most expensive transportation modes due to its fuel requirements and environmental implications. It also has size and weight restrictions. Governing bodies restrict what can and cannot be transported by air, such as oddly shaped or very large items that are usually more appropriate for other modes of transport.
Key benefits of air freight include
- Quick transit
- Less handling and damage of cargo
- Less documentation
- Reliable arrival and departures
- Enhanced level of security for your cargo
Another transport method considered to be more environmentally friendly is rail. Trains burn less fuel per ton-mile than road vehicles and can have as many as 100 carriages with only one driver. However, there are some extra costs that are incurred in a rail journey. Each end of rail transit requires a road delivery and a lift cost to transfer the container between the train and the road vehicle.
Generally, long journeys are less expensive by rail, and shorter journeys are even less expensive by road. The point of cost neutrality is regulated by several factors which are route and commodity-specific, but generally, the point of cost neutrality can be anticipated to remain in the range of 130 to 150 miles.
In 2015, the first freight train carrying ISO freight containers from China arrived in the Port of Rotterdam in 18 days, when the normal transit time by sea was 44 days. The movement of containerized freight by rail from China to logistics hubs in Europe has been seen as a significant step in the development of trade between the two continents.
If you can set up effective planning, rail is a comparatively quick mode of transport taking only 20 days to China. In addition, moving by rail also has the advantage of all containers being transported to the location in one go, while being environmentally friendly as trains release less carbon dioxide than a plane.
Key benefits of rail freight include:
- Reliable transit times and schedules
- The most efficient form of land transportation: one train can haul the equivalent of 400 trucks
- Fast and cost-effective deliveries over long distances, typically over 500 miles
- Strong safety record
- Helps in alleviating road congestion, thus lowering emissions
Road freight is one of the most popular modes of transportation. It is commonly used in continents such as Europe, Africa, and North America. Because it is a single customs document process it is a smooth movement of cargo across various states and countries.
Road freight provides several advantages over other modes of transportation, including:
- Quick and scheduled delivery
- Local, over-border, long or short-haul deliveries even in rural areas
- Flexible service
- Packing cost savings compared to other modes
- Track and trace cargo and truck
- Complete door-to-door service
However, truck transportation is limited to what it can carry by the size of the vehicles used and by size and weight restrictions. Road transportation can also be easily affected by weather, road conditions and traffic.
Another option that freight forwarders specialize in is multimodal solutions – the use of several modes of transport.
Multimodal is the arrangement of several forms of transportation such as sea, road and rail which will allow the customer to cost and time-effectively manage deliveries from start to end, ensuring optimal treatment and proficiency.
Cross-region rail network combined with trucks can offer savings of up to 65% in comparison to air freight costs while offering transit times of up to 40% faster than standard ocean freight.
Sea-Air is another example of multimodal transport. The service is considered less expensive than air and quicker than ocean service. The alternative resolution to air or ocean, Sea-Air offers the worldwide transportation industry time and cost savings as well as eco-friendliness.
Sometimes using this mode of transport helps to avoid demurrage fees.
Key benefits of multimodal transport include
- Cargo can be moved to any part of the world using multiple modes of transport
- Reduces the distance of the goods between the manufacturer and the consumer
- Customers can deal with one entity to handle all modes of transport under one document
- Efficient and cost-effective delivery options
Which mode of transportation should you use?
There are various choices for transporting your cargo, and there may not be one solution for your transportation needs. Each mode of transport has its pros and cons. Prioritizing your needs, and comparing costs are important when planning your shipment and choosing the best mode of transport. Stockwell International can help you choose the cheapest and fastest solution for your business needs. Contact us to speak to an expert freight forwarder and get a free quote today!