Factors to consider when choosing the most suitable mode of transport
- January 15, 2015
- Posted by: Trade Logistics
- Category: All, Export, Freight & Logistics, Import
There are many aspects to consider when selecting the most suitable mode of transport to get products from point A to B. The effective use of transportation equipment and modes reduces shipping and logistics costs. However, export planning is not always as simple as it seems. Depending on the destination, goods consigned to a foreign market can be transported by road, rail, air, sea, inland, waterways or a combination of any of these. When deciding which mode of transport to use, the following factors should be taken into consideration:
1). Cost of Transport:
When choosing how to best transport products for exportation, your budget should be the most important factor when making decisions. Costs can vary based on the type and amount of goods that need to be transported. Bear in mind that the cost of transport will influence the cost of goods.
If you are transporting heavy or bulky products over a long distance inland, then rail transport will be the most economical. Land transport, typically by trucks, is best suited for small amount of goods being transported over short distances. It also saves packing and handling costs. Water transport is without a doubt the cheapest mode of transport, very suitable for heavy or bulky goods that need to be transported over long distances where time is not an important factor. For the transportation of perishable, light or valuable goods, air transport will be the most efficient mode of transport to use, although it is expensive. Importers and exporters should also consider the overall cost of transportation, keeping the “hidden costs” such as insurance premiums and finance charges in mind.
2). Reliability and Regularity of Service:
Transport modes differ in reliability and regularity. Your decision on which mode of transport to use will be influenced by the urgency and speed by which you would like your goods to be delivered. Land, ocean and air transport are usually affected by bad weather such as heavy rains, snow, fog and storms which may cause delays.
Safety and security of goods in transit also influence which mode of transport to use. Land transport may be preferred to railway transport because your losses are generally less. Water transport exposes the goods to the perils of sea; hence from a safety point of view, sea transport is the most risky. Also, to protect the goods in transit, certain types of packaging are recommended, which might influence costs. Goods may also require special facilities such as refrigeration or special security measures that need to be taken into consideration.
4). Characteristics of goods
The size and weight of goods also play a role in deciding which mode of transport to use. Land and air transport cater mainly for light and small shipments while rail- and sea transport cater for heavy shipments. Deciding which mode of transport to use will also be dependent on how dangerous, fragile or of high value the products are. Air and land transport are usually the best option to use for breakable products of high value.
5). More considerations:
Other factors to keep in mind:
- The terms of the export sales contract, e.g. the buyer may stipulate that a particular mode of transport should be used.
- The location of the foreign market – obviously, a destination on another continent will eliminate the road and rail option for the main transport leg.
- The location of the overseas buyer in relation to airports, sea ports and railway stations.
- The facilities at the port of destination, e.g. whether there is bulk handling or container –handling equipment.