Part of being an International Logistics Manager is to ensure your company shipments are transported in the most efficient and the most cost effective way. High freight costs can very quickly erode the profit margin on your goods and, after all, the aim of business is to make a profit. Having the experience to know which freight forwarding method to use can be the difference between making a profit and making a loss. So, which is the best shipping option to use? International Air, Sea, Road and Rail freight services all have their own unique advantages and disadvantages depending on your company circumstances and capacity.
International airfreight is the most expeditious way to transport freight but it comes at a cost – airfreight is inherently the most expensive. Flights can be either direct e.g. Osaka, Japan to London, UK, or indirect e.g. Osaka, Japan to Dubai, UAE to London, UK. Not all routes have direct flight links so be aware your goods may need to travel via an indirect route. Sometimes when there are options of both direct and indirect flights the indirect routes can be slightly cheaper. This is because they go through smaller airports that have lower airport taxes. The more times your goods are handled the increased risk of damage or delay so I would recommend using a direct flight if you can. With limited space availability on flights and rates based on gross or volumetric weight (whichever is the most) airfreight can quickly become the least cost effective option. With this in mind airfreight should, ideally, only be an option for urgent, time sensitive shipments.
If your shipment is urgent and has been booked onto a flight there is no guarantee it will actually fly as planned. Like all vehicles, planes have strict weight limits. If poor weather means the plane needs to take on more fuel freight will be ‘bumped’ and removed from the flight to keep the weight down. Also, if they airline has higher passengers numbers than expected they will also bump freight as the airline can make more money selling passenger seats than freight. If your shipment is bumped it will be booked on the next available flight.
For obvious reasons all goods being loading on-board a plane need to go through security. Just like your suitcase when you go on holiday your freight is scanned by several different methods before being cleared for loading onto the plane. If you are shipping a particularly dense item, which cannot be scanned successfully, it will need to be inspected by another method. This can include hand searching or swabs taken for chemical analysis. As these additional security scans take more time, at busy periods, this will often mean the freight will miss the flight while these necessary processes are completed. If the goods fail the additional security scans the goods may not be allowed to fly at-all.
At the moment, with the reduced number of passenger flights due to lockdown travel restrictions, airfreight rates are even higher than usual.
- Quickest Option
- Efficient Service
- Ideal for Urgent shipments
- Can be costly
- Limited space available
- Shipment could get bumped
- Shipment could be delayed if it fails security scans
- Increase risk of damage or delay with indirect routes
International sea freight can be one of the most reliable and economical ways to transport goods but can also be the slowest. Sea freight is ideally suited to dense, palletised shipments since the freight is calculated on the volume used within the shipping container. There are two options: FCL, full container load, in which you fill the shipping container and LCL, less than container load in, when you do not need the full capacity of the container – a consolidation service. Both FCL and LCL can be very cost effective ways to transport freight. There are many different sizes and shapes of sea freight containers depending on your company requirements.
Vanning and Devanning
Vanning is the process of loading and packing freight into a freight container and devanning is the unpacking and unloading, also known a stuffing & de-stuffing. If your company is shipping via FCL you can carry out the vanning and devanning of your freight at your own warehouse. If your company has the capacity this option can be extremely beneficial in avoiding vanning/devanning costs plus the associated collection and delivery costs. This is not an option for LCL shipments as this happens at a container freight station(CFS), which is a warehouse facility that specialises in consolidation freight.
Deep Sea and Short Sea
Depending on how far you are shipping the sea freight it be known as either a deep-sea shipment or a short-sea shipment (SSS). Deep-sea shipping refers to shipping via intercontinental routes, across oceans. Short sea shipping refers to either costal travel or short distances e.g. within Europe.
- Reliable service
- Many container types available
- Option of Deep or Short Sea services
- Goods secure within container
- Slow transit time
- Additional cost may be incurred if your company has limited capacity
- Central and Inland locations will incur higher collection/delivery costs to/from port
Probably the method we are most familiar with – goods being transported via road networks in vans and lorries of all shapes and sizes. Road freight networks are very efficient and well established in most countries. It is a good balance of speed and economy giving a good alternative to the cost of airfreight and economic benefit of sea freight.
Road freight can give a variety of services depending on the urgency of the goods with many carriers offering same day dedicated vehicles, next day and economy services. Keep in mind that road freight with a transit time of 2-3 days, and moving through several different countries, will be moved through a series of road network hubs. These are transit warehouse facilities that will unload the freight from one trunk and load onto the next relevant trunk. A trunk (or trunking service) is a regular road freight route between hubs e.g. London, UK to Birmingham, UK. As your shipment passes through these hubs, being handled multiple times, there is an increased risk of damage or the goods being misrouted. The more roads hubs the shipment goes through the higher the risk of both.
Many road freight forwarders have excellent tracking facilities for shipments. Using a booking or tracking number you are able to monitor the progress of the shipment as it is scanned at each location. In the last stage of delivery process, often called the ‘last mile’ many carriers offer active vehicle tracking using a GPS system onboard the delivery vehicle. This is ideal to monitor the delivery to your (or your customers) address in real-time.
Road freight is normally used along side airfreight and sea freight to complete the collection/delivery of shipment to/from ports. As it is rare shippers & customers deliver or collect directly from ports themselves.
- Good balance of speed and cost effectiveness
- Variety of services available
- Tracking available
- Established Networks
- Risk of damage
- Risk of being misrouted
- Speed of delivery directly dependent on distance
Transporting goods by rail is an option, which has huge benefits but, at the moment, is hindered by limited capacity and routes. The main benefit of rail freight is the speed – it is quicker than sea and road freight and can be a cost effective option, being cheaper than airfreight. Rail freight is also LCL or FCL just like sea freight so, if you are currently using sea freight and you have a rail freight option, it would be worth considering rail for the more time sensitive shipments.
At the moment the main rail freight routes in/out of Europe are the China rail lines with schedules such as:
- China to Warsaw, Poland – 12 days
- China to Hamburg, Germany – 15 days
- China to UK via Duisburg, Germany – 24 days
- China to Moscow, Russia – 18 days
This service offers a saving of up to 50% on transit times compared to sea freight and a freight cost saving of up to 70% compared to airfreight.
- Good saving on transit time compared to sea freight
- Big saving on freight cost compared to airfreight
- Goods secure within container
- Reliable established network
- Extremely limited services
Multimodal transport can be a combination of any of the freight forwarding methods, which are paid for by the same party (buyer or seller). This can give an near infinite combination of choices. Such as:
- Part airfreight, part road freight a shipment to gain some of the speed of airfreight with incurring the full cost to destination.
- Part road freight part sea freight when you are shipping to customer on a different continent without a direct road link
- Short Sea freight UK to Europe then Road Freight to avoid road freight congestion at the main ports such as Dover.
So which is the best?
So which is the best freight forwarding service to use? It all comes down to two factors:
If you don’t have much of one you will need more of the other!
For the shipping of stock, efficient forecasting and planning will give you the widest choice of options. Try and give your company as much time as possible to help keep the shipping costs down – weigh up all your options to find the correct balance. Do you need to airfreight the same goods every week/month? Why not create a larger shipment and ship via sea freight to keep a safety stock level.
For determining the best option for customer deliveries gain as much information as you can. For example: does your customer really need goods shipped via airfreight to be delivered the next day if it’s a Friday? If they close for the weekend what is the point in the extra delivery cost? Offer the option of a road freight service being delivered Monday morning.
Weighing up the pros and cons with each shipping method, allowing for the time available against the cost will provide the best options. With this information you can help find the best solution for your companies, suppliers and customers.