There are key factors to consider in routing cargoes for shipping. Before taking a decision on which route or mode to use, some critical issues must be considered. These include:
A. The destination and Accessibility: The destination (and final place of delivery) of the goods, as well as accessibility, is usually a great influence on the choice of transport. Port and transport infrastructure at some destinations can be a major issue and should be carefully considered. For example, it is necessary to consider if the destination port can handle the type of vessel envisaged for transporting the volume/weight of goods when considering a charter. What is the draft of the port? Is suitable for handling equipment available?
Transport infrastructure should include road and rail network as well as distances between the sea or airport to the final place of delivery. After discharge of the cargo, on-carriage restrictions in terms of weight, height and width along the way to the final place of delivery should be given a thought.
B. The Type of Goods: The nature and characteristics of goods is an important factor when considering the mode of transport to use for international transportation. Characteristics of goods are perceived by their size, weight, value, fragility, perishability, pilferability as well as the hazards they can cause to other goods or persons handling them. These attributes make them unsuitable for carriage by some modes, while some other types of goods are restricted to a particular mode.
I. Weight / Volume: Weight and size are key elements when considering the characteristics of goods. Shipments with a weight exceeding 1000 kilograms, for instance, cannot be routed via express parcel or courier, but a small consignment of books weighing less than 20 kilograms can easily qualify for courier shipment. On the other hand, because rail has more weight capacity than other surface transport modes, bulky and heavy loads are more suitable for rail transportation. However, there are limitations on the height of the cargo. While rail may be suitable for heavy loads of long lengths, the road may be preferred for goods with higher heights.
A solution to heavy loads with large heights may lie in a combination of road and sea transportation using low loaders and ro-ro vessels. The need to have access to an inland site may require that an aircraft has chattered if the goods are heavy and bulky.
II. High-Value Goods: The value of some goods may be very high and for the purpose of security it would require less handling, minimal transit storage and fast transport. The modal choice would invariably be air, even though air transportation may be more expensive. The cost may probably be offset by less packaging, however insurance premium and less interest in capital tied up in the goods as these are some of the benefits of shipping by air.
III. Fragile Goods: These types of goods, such as electronics, require careful handling. So, the first thing is to ensure that they are well packed and properly marked to protect them from damage. They should also not be subjected to frequent handling during transit. Such goods are more likely to be shipped by air but if speed is not a major consideration then shipping them in the container by sea can be an option.
IV. Perishables: Perishable consignments such as pharmaceuticals, fruits, vegetables, meat, etc., require low temperature to prevent them from damage. Most carriers in all the transport modes have facilities for cargoes that are sensitive to temperature and humidity both at the terminals and on their carrying equipment or units. Generally, the sizes of perishable goods are such that most of them can be carried in ISO containers or unit load devices. A major consideration for routing perishable is speed. The faster the shipment gets to its destination the less it is likely to get damaged.
V. Pilferability: Certain goods, whether or not are of high value, are attractive. They include goods such as canned food items, spare parts for machines and vehicle spare parts. If they must go by sea, then shipping them in containers is most suitable. Beer in small cans can be quiet attractive to stevedores if shipped as break-bulk
C. The Requirements of the Consignee / Contract: Some requirements in respect of transport mode are usually indicated in the sales contract, letter of credit, incoterms or such other documents. Sometimes these documents specify the mode of carriage to be used. The importer may also have signed a carriage agreement with specific shipping lines or airlines, to use their services for a given period of time in return for discounts on freight. In such cases, the exporter must follow the agreement by using the specified carriers.
The sales contract or letter of credit may also specify that trans-shipment at an intermediate port is not allowed. The term of sale agreed between the importer and exporter may also stipulate a place where the cargo is to be delivered, leaving no room for the cargo to be routed elsewhere.
D. The Prevailing Situation or Circumstance at the Time of Shipments: There is a theory known as “situationism” which states that human behaviour is determined by the circumstances surrounding him rather than personal abilities. Situations can be a major influence in modal choice as a good choice and can become unsuitable in the next few hours. Situations such as strikes at the ports can cause delays to vessels or aircraft making such ports unattractive to shippers. Privacy and criminal activities at certain ports can cause such routes to be closed. Where these situations exist, the choice of modes becomes limited. The best mode becomes the one that is free from any problem.
E. Time Factor: The time it takes for a shipment to arrive at the destination is usually a major concern for the receiver. Transit times between origin and destination vary widely for modes. While it can take several days by the sea, shipping by air can take only a few hours. A fast mode of transportation implies a higher freight cost, but this may not be the case if other distribution costs are taken into account. Less time in the arrival of goods provides some benefits to a company. If the goods arrive at a time of high demands, it will allow for more sales and higher profits.
In nearly, every transportation, the faster the transit time, the less capital that is tied up in the goods, and this includes the costs of the goods, interest charges as well as the opportunity cost. Time is obviously important for certain classes of goods which must arrive at their destinations at a specified time in order to preserve their quality. Goods such as medicines, fruits, vegetables, require the shortest time of transit. Fashion goods and magazines which are time sensitive must be speedily dispatched. Where the amount of goods is cargo is large, a faster mode of transport can still be found within the surface transportation modes. Freight trains are faster than ocean vessels for the transportation of goods over long distances such as between Europe and China.
Routing and modal choice for international freight transportation can sometimes be a complex exercise. The primary aim of routing is to analyze the various modes of transportation that can be used and deciding on which one to use. The decision must be based on the most suitable mode in terms of cost, speed, safety, etc.
Contact us today, and let us help you secure and hasten your next shipment.
Photo Credit: Google Pics