Sea, Air or Overland: Best Transport to Choose, Once all of the relevant information regarding an export shipment has been obtained from the client (it can be supplier or buyer), it is then necessary for a freight forwarder to review the various modes of transportation available to transport the goods and to make a selection of the best mode or combination of modes to meet that client’s needs.
Table of Contents
- Who is a freight forwarder ?
- Ocean Freight
- Air Freight
- Overland by Rail or Truck
- Factors Determining the Transportation Mode and Routing of the Shipment in Best Transport to Choose
- SEA/AIR Transportation
Who is a freight forwarder ?
So who is this freight forwarder and why an exporter or importer needs them in transportation of their goods from origin to the destination?
Let us go with the Wikipedia definition first and then go into details.
A freight forwarder, or forwarding agent, is a person or company that organizes export shipments for individuals or corporations (exporter and importer) to get goods from the manufacturer or producer to a market, customer or final point of distribution. Forwarders contract with a carrier or often multiple carriers (can be shipping line, airlines, rail or trucks) to move the goods from one country to another.
A forwarder acts as an expert in the logistics network. The freight forwarder can use a variety of shipping modes, including ships, airplanes, trucks, and railroads, and often use multiple modes for a single shipment. For example, the freight forwarder may arrange to have cargo moved from a plant to an airport by truck, flown to the destination city and then moved from the airport to a customer’s building by another truck.
A freight forwarder is a firm specializing in the arrangement of cargo movement on behalf of shippers. An exporter or importer is not specialized in transportation of their goods and the documents and rules and regulations need to be followed in the export transportation process.
A freight forwarder being an expert firm provides this service to smoothly transport the goods from origin to the destination. The lists of services a freight forwarder can provide are:
- Ocean, air, rail or road freight transportation
- Inland transportation from origin and/or to destination
- Preparation of documentation
- Warehousing and storage services
- Consolidation and deconsolidation
- Cargo insurance and customs compliance
An exporter may be unaware of details of the transportation like:
- Safety and security requirements for the cargo
- Reasonable transportation costs
- Scheduled delivery of cargo at destination.
A freight forwarder being an expert needs to work for the shipper taking into account:
- The cargo itself
- The packaging of the goods
- The mode of transport
- The urgency of the shipment
- The value of the goods
- The perishability of the cargo
- Whether the cargo is hazardous or not, etc.
- The price for the service the shipper is willing to pay
Let us see the features, advantages and disadvantages of different modes of transport and when to choose the alternatives from one mode to another
Ocean Freight
Ocean freight is used for the movement of goods that are heavy and voluminous and do not require fast transit times. Generally speaking, water movement is less expensive on a per-unit basis than land movement and air movement.
Ocean movement does have some downsides. It is comparatively slow. Arrival times are approximate.
Goods are exposed to more risks than in other modes of transport. Damage and loss risk is greater.
Ocean carriers have a very limited liability. Heavy packing and careful stowage are required.
Air Freight
Air freight is used for smaller shipments, those requiring fast delivery, those of high value, or perishables and items that are exceedingly fragile or delicate.
Sensitive electronic equipment or computers can ill stand the rolling and swaying of a three-week sea voyage, the bumping in a railcar, or the stop and go of a long truck trip. Even if the cargo is relatively bulky or heavy, the client may still opt for air freight. The high per-unit value of the goods can more easily bear the costlier air freight.
A broken-down machine may bring an entire production line to a halt. A replacement must be flown in regardless of cost; for the cost of a day’s lost production is almost certainly a multiple of the air freight cost.
The high per-unit cost is air freight’s chief drawback, but it isn’t always as bad as it may sound.
There are advantages of using air transportation that, in many cases, are not readily obvious:
- Less costly packaging
- Lower insurance rates
- Less likelihood of damage; the quicker the goods reach the buyer, the quicker the seller gets paid; and low inventories and warehousing – the buyer keeps a limited supply of goods on hand and can replenish them quickly by using air freight.
Overland by Rail or Truck
A whole freight train might move as much as 400 TEUs with little personnel cost and over a readily available, traffic-free roadbed.
In this scenario if we imagine the number of trucks needed to move the equivalent volume, and the cost to do so. Add the restrictions imposed on trucks: licensing in each province traversed, weight limitations, mandatory rest periods for drivers, restrictions in some towns on night driving.
Long distance overland transportation is best with rail.
For shorter distances, trucks are definitely the better choice. They serve more communities and can go into remote places; they offer door-to-door delivery; they are flexible, and in many cases, they offer better rates.
Factors Determining the Transportation Mode and Routing of the Shipment in Best Transport to Choose
- Geography of the place
- Trade Routes
- Departure frequencies of the transportation
- Freight Rates
- Terminal charges
- Border-crossings customs procedures
- Currencies
SEA/AIR Transportation
Let us explain the SEA/AIR transportation by an example.
To transport from the Far East to Europe through North America. Goods are brought by fast container ocean vessels to a West Coast port and then reloaded into a Europe-bound aircraft and air-freighted from those airports.
Transit time is about 14–16 days as compared with about 30 days or so by the all-water route. Cost is about halfway between the all-air and the all-water route, and thus represents a perfect alternative between cost and speed requirements.
Sea/Air combination transportation reduces the transit time but not increasing the cost as high as all-air shipment.
