Different types of goods call for different types of transportation, and selecting a suitable mode of transportation is crucial for any business. Network design is being used in supply chains for the effective use of transportation equipment that reduces shipping and logistics costs for the organization. The primary methods of transport are Railways, Roadways, Airways, Waterways, and Pipelines. These should be used in a way where they can help in reducing lead time and costs of transportation.
Choosing the right transportation mode depends on many factors such as the type of consignment, the budget, and the speed at which the delivery needs to be made. Each of these methods comes with its own advantages and disadvantages.
Key factors to be considered in selecting a mode of transportation are:-
1. DESTINATION
The final destination of the goods will clearly have a direct influence on the transport service used. Certain modes of transport become a logical ‘rule of thumb’ for a particular market, unless there are reasons why other modes should be used. It is not surprising that over 80% of the UK’s exports to Western Europe are by road, and that the most common transport mode for our markets in developing countries is sea freight, although there is a growing use of air freight into those countries.
2. AVAILABILITY
In relation to the above comments, it is generally the case that the most available transport services, in terms of number, regularity, and quality, will be those most commonly used for certain destinations.
3. TYPE OF GOODS
There are many factors to do with the nature of the goods to be shipped, which will affect the mode used. These include:
- Size Large indivisibles (which cannot be ‘broken down’) require very special treatment and routing. It may also be that very dense cargoes cannot be moved as full loads because they will exceed legal weights;
- Segregation Some goods are liable to taint others or be easily tainted themselves. That is to say, they impart on other goods or pick up, odors that are not desirable. This may preclude the use of a normal group service.
- Fragility Not only does this affect the nature of packing, but also leads to modes of transport that minimize handling and maximize the speed of transit;
- Value Likewise, highly valuable goods will require minimum handling and maximum speed. It is also the case that certain services, for example, express, can provide greater levels of security and personal care than others;
- Perishable goods need the maximum speed of transit and often special stowage;
- Special Requirements Apart from the above, there are many other special needs which the transport method must accommodate. These include refrigeration, insulation, ventilation and even heating. Plus, all the packing, marking, and stowage requirements of hazardous goods.
4. SPEED OF TRANSIT
It is not only perishable or high-value goods that are appropriate to fast transit times, but also those for which there is an urgent demand. This would include items such as replacement components for broken-down equipment, or vehicles off the road. It should also be borne in mind that a faster transit invariably leads to earlier payment with calculable financial benefits. More on this later.
5. COST
A factor that is always of concern whenever choices must be made in the business. In the case of international transport, it is pretty obviously the case that the freight rate charged will differ from one service to another and that the fastest method, that is, air freight, will be the most expensive, and the slowest, usually sea freight, will be the cheapest. It is extremely important that the exporter is able to make accurate predictions of the freight costs, not only as an aid to the choice of mode of transport but also to ensure that the quoted prices adequately cover all costs.