In the world of trade, the company with the ability to transport freight in the most cost and time efficient manner reigns supreme in their industry.
Therefore, an essential part of transportation management lies in building and managing an effective supply chain from one of the key modes of transportation: road, maritime, air, rail, intermodal, and pipeline.
An understanding of the strengths and weaknesses of different types of transportation will help you determine the mode of transportation that would be ideal for your merchandise .
In a world that’s increasingly driven by efficiency, it’s critical for companies to get their products and materials to clients as quickly and at the lowest cost as possible.
To accomplish this feat, these businesses are relying on good transportation management. And that means having an efficient supply chain in place.
Having a trained team of supply chain managers who can plan routes and schedules will make all the difference between bringing home the bacon or going overboard in your efforts.
The ways in which companies approach these different modes of transportation has changed over time and is still changing to this day.
Selecting the right mode will depend on the shipper’s resources, their budget and the materials they plan on moving.
As with every business decision, it is important to consider all aspects of the transportation modes before arriving at a final decision.
Modes of transport: Road
When it comes to logistics, road infrastructure is the most dominant mode of transportation to get around.
As long as humans have existed, there have been ways for us to travel from one place to the other and although people walk or employ animals for this purpose still today, standard road transportation happens much more often.
And you can often find trucks on highways hurrying from one place to the next carrying thousands of products or carting important goods so that they arrive on time and in tact at their destination.
As the automotive industry continues to improve the safety features of vehicles, commercial vehicle operators are looking for the next generation of driver-assistance technologies and more innovative services that maximize the performance of their fleet.
Small-to-medium sized parcels can be transported by road. There are many packages that are small enough to fit in a personal car and be shipped, especially so when it comes to smaller shipments or parcel shipping like ecommerce.
Regardless of size, shipments with more than 150lbs. considered freight, as trucks and not the most fuel-efficient vehicles for shipping packages. The two types of road transport are Less-than-Truckload (LTL) and Truckload (TL).
Logistics Transportation Logistics (LTL) is the process of delivering goods over land, by air or by sea. The three types of LTL shipping are: full truckload, less than truckload and express freight.
The costs to ship goods are impacted greatly by a number of different independent factors including: time in transit, door-to-door service and product density.
This transportation method is known as the hub and spokes model. It’s a great way for businesses to reduce their shipping expenses because multiple shippers can pay for part of the wheeled vehicles in which they ship their products/items to the final destination.
A shipment will go through multiple transfers of varying modes of transport much like a passenger on an airplane is transferred from one plane to another in order for them to reach their destination.
Since both modes of road transportation (truckload, less than truckload) use the same truck to transport goods, individual shipments have stop off over multiple locations before reaching its destination.
TL is faster than LTL transportation because there are no stops or lost time in transit. The truck will go straight from origin to destination.
A shipment will go through multiple transfers of varying modes of transportation much like a passenger on an airplane is transferred from one plane to another in order for them to reach their destination.
If a shipment is more than 40,000 lbs or 320 linear feet long, the most cost-effective option becomes truckload shipping for that particular shipment.
Both shipments and passengers being transferred from one means of travel to another may result in additional traveling time as well as the possibility that the goods or person might become damaged during transit .
TL is faster than LTL transportation because there are no stops or lost time in transit. The truck will go straight from origin to destination reducing the impact on delivery times, especially small packages.
To avoid a higher cost, shippers must ship a larger volume of freight to make TL economically sound. If your shipment is worth more than $75 and weighs less than 40,000lbs including pallets, it’s cheaper to ship by TL.
If a shipment is more than 40,000 lbs or 320 linear feet long, the most cost-effective option becomes truckload shipping for that particular shipment.
Road transportation Ground plays several roles in the scope of goods delivery: for everyday items people can go to any store.
They are even delivered directly to your home. And for anything bigger it is time-consuming and expensive to use trucking.
So, goods of large volume and weight as well as specialized cargo have an alternative – containers, railroads or airplanes! But which one is faster and what are the environmental concerns?
Indeed, these wheeled vehicles may be effective while being in constant transit between two points.
Modes of transport: Maritime
Ships have been transporting commodities for thousands of years and in an age where over 90% of all manufacturers globally worldwide ship their products overseas through the use of sea vessels, they remain a significant form of transport mode when it comes to carrying capacity.
Massive container ships that travel on almost every major body of water are able to carry bulk cargo volumes many times higher than either truck load or rail systems is capable of doing (hence why 90% of all international trade is accomplished through maritime transport).
So even despite the global financial recession, maritime transportation is hugely beneficial for companies wanting to save costs on transport fees and reduce the CO2 emissions caused by other modes of transportation like trucking, rail freight lines or air freight.
When it comes to ocean freight and shipping containers the most trusted transport operators is Maersk. They have a proven track-record of planning and executing the most efficient routes available today.
In fact, they recently sent their first shipping container vessel over the Arctic Circle, taking advantage of some newly discovered opportunities that may allow them to become even more efficient in the future.
Maersk may have found a new way to speed up maritime transportation by sailing off the coast of northern Russia and drastically reducing travel times between Murmansk, where ships transfer from European ports into arctic waters, and Japan or other nearby destinations .
The biggest drawback to maritime transportation is its relative lack of speed compared with other modes of transport that provide services.
Still, it is the most efficient of all transportation modes when its volume capacity is taken into account, especially shipping container volumes.
In practice today, air transportation is often a better option than shipping if expediency is prime consideration.
There are more than 50,000 commercial cargo ships currently in service. Because these ships are constantly moving from point to another and often travel in large numbers, if a measure is put into place at sea it can create a lot of confusion.
For example, during the 40 day period a ship is on its voyage it must either turn around or pay new tariffs that were unexpected by crew and owners alike.
The shipping world has had mixed reactions to this as there will undoubtedly be economic and political impacts caused by increased customs checks.
Additionally the cargo ships have a big carbon footprint, which results in almost as much CO2 produced in one month as 50 million cars produce in 12. But according to Statista, there will be a decrease of cargo emissions by 50% by 2050.
The closest alternative to maritime shipping is air shipping, but even though it is working on reducing its carbon footprint, right now it is not a mainstream alternative for international freight transport since there are some technological setbacks that need to be solved.
Modes of transport: Air
Air transport is a fast, efficient method of freight transport to get almost anywhere in the world and supply chain managers are finding it more economical every day.
Planes have been around in some form since 1903 which means that air transport is one of the oldest modes of transportation we have available today.
But that doesn’t mean there hasn’t been innovation in air transportation! In fact just recently a very exciting new plane was released.
It’s called the A380 and it is so huge it looks like it belongs on an aircraft carrier rather than at an airport.
This is part of an effort to improve gas mileage because the problem with air transport is that once you get the planes up in outer space, they burn so much fuel just trying to stay airborne that it makes transporting smaller amounts of cargo way too expensive.
By making planes larger and using new technology, air transport will be cheaper for everyone and even faster.
As a result, many companies are now starting to form their own fleet of airplanes.
Companies such as Amazon and UPS spend millions of dollars in doing this because they believe it will make them more competitive in an increasingly growing market.
The more advanced and dependable air travel becomes, the better it is as a way to send high-quality cargo and goods from one place to another – especially now that flying tends to be up there with other fast modes of transportation like trains for example.
Needless to say, passenger aircraft has become the most popular way for people to travel long distances and it’s no surprise that businesses regularly use air freight as shipping opportunities for their high value freight shipments too.
There are a couple ways in which air transport is lacking. In its current state, it is still by far the most expensive way to ship freight long distances.
Also due to the nature of air transportation, weight and volume of freight must stay minimal to ensure safety of flight. On top of all this, emissions produced by air transport during international shipping are also the highest of any mode and a concern for the federal government.
Modes of transport: Rail
While rail transport has only been around for as long as the 18th century, its development has enabled people and companies to ship freight to harder-to-reach locations without outside assistance.
In modern times, rail transport is used primarily for its ability to ship oversized products and cargo such as earth and steel products that can’t be transported by other means of transportation.
The freight train is the heaviest mode of road transport, carrying large, heavy loads relative to the passenger capacity.
Freight trains offer a great alternative to going over seas and through mountains which is why almost 90% of cargo travels via rail in Canada.
Most long-distance trips can be made on rail with only short diversions through freight-only tracks.
Rail transport can be a highly limited service. Unlike road transport, which we use everyday, rail transportation is only able to operate on a traced path or a network of tracks and lines that were built specifically for trains and other rail vehicles to travel along.
Because of this, it’s very rare to see a new railway built for quite some time as building them can be extremely costly and time consuming.
Additionally, railways are limited in their reach due to their flat terrain and extensive construction. Thus, railways are primarily accessible in many cities and rural areas over short distances. This attribute makes rail lower cost and one of the primary players in the intermodal transportation as well as the ability to carry passengers and reduced environmental impact.
Rail vehicles are not influenced by traffic, train tracks that diverge or other types of switch offs between modes. This makes the rail the safest of the various modes for hauling long haul items across land with minimal risk.
This safe handling means trains commonly carry large quantities of bulk cargo such as coal, corn, iron, ore, natural gas and other commodities such as wheat which would be uneconomical to ship by truck.
Modes of transport: Intermodal
Logistics involves a cyclical process in which goods travel in stages from their origin to their final destination. Many times, this involves using multiple modes of transportation with different restrictions.
For example, consider a SMB in Germany shipping goods to the state of Oregon. Their transportation will most likely begin on road, be transferred to rail, then to maritime vessel, which transfers to rail in the U.S., and then arrives at its destination by road once again.
The purpose of intermodal transportation is to take advantage of the individual strengths of the different modes, thus a low cost transportation cycle,. This practice is known as intermodal transportation and is often necessary in logistics.
Historically, intermodal transportation presented many challenges for shippers and carriers. These included transferring shipments between modes with maximum efficiency and minimal damage.
Intermodal transport has been been made much easier by the advent of containerization because these containers can be easily transferred from ship to truck or train.
By developing a standardized system of intermodal containers that can be transferred between road, rail and sea transportation systems, warehouses and shipping yards can more safely and efficiently handle their workload.
Standard intermodal container dimensions are usually 8′ wide by 20′ or 40′ long with no standard in terms of height. However most containers range from around 8’5″ to 9′ tall.
In recent years, intermodal has experienced a substantial uptick with rising freight rates coupled with a shortage of available truck drivers on the market.
With intermodal shipping growing and competition in freight getting tougher, companies are now turning to other modes, primarily rail, to complete shipments.
In times like these when capacities are short, companies scramble to see how they can keep costs low while still maintaining fulfilment promise dates by reaching out to reliable suppliers that can help maintain their performance and provide timely delivery options.
Modes of transport: Pipeline
Pipeline shipping is not a traditional mode of transportation in the traditional sense.
Though it’s not as convenient or comfortable as riding in a limousine, there are a lot of benefits to this because it reduces carbon dioxide emissions by many tons and helps make things convenient for the consumer.
Pipelines transport unrefined fossil fuels such as gas and oil from their point of origin to the point where they can then be transferred to the refineries or another mode of transportation.
There are multiple aspects that facilitate in making a pipeline. The cost of transportation primarily lies in its construction, the diameter of the pipeline, and the viscosity and volume of fluid being transported.
Pipelines can be built above ground, underground, or underwater making them ideal for offshore drilling.
As the demand for crude oil rises, companies who mine and extract the petroleum by-product are shipping it increasingly more by pipeline transportation than by rail transportation.
While historically, crude oil was transported mostly by railway tankers because of the easily controlled nature of the shipments that option is no longer as favorable as pipeline transportation has become due to its increased level of safety and overall efficiency.
Regardless of the risks, however, pipelines have been a topic of controversy because of the damage it does to the environment by increasing fossil fuel emissions, thus bringing us ever closer to climate change, and slowing down sustainable energy as well.
The controversies surrounding the Trans-Alaska pipeline transportation system serves as an example for this.
Different modes of transportation each have their own advantages and disadvantages. As a logistics manager, one of your top responsibilities is to calculate the best modes of transportation for a specific shipment. Each factor plays into: volume, speed, distance, and cost.
What are your company values? Are you value driven when it comes to making decisions? Do you place as much importance on one thing, like volume or speed, than another? Do you focus more on the long-term, or do you think that cost is a priority?
By identifying what matters most to your company and how these values relate to each other, you can make an informed decision about what supplies or equipment work best and how you can grow your business with them.