7 Factors That Play a Key Role in choosing The Right Mode of Transport For The Goods Movement.
Table of Contents
Right Mode Of Transport
Different types of goods require different type of transportation. The type of transportation of the goods depends on several factors:
• The products of the company and their type, e.g. perishables or non-perishables, breakables etc.
• Supplier production lead times.
• Product availability.
• Source of supply i.e. the pick-up destination, e.g. China or others.
• Customs and Excise rules, such as duty, quarantine regulations and others.
The primary modes of transport are Railways, Roadways, Airways, Waterways and Pipelines.
Depending on the type of consignment, the budget considerations, and the speed at which the delivery needs to be made, each mode of transport has its own advantages and disadvantages. Sometimes, depending on the client, market or geographical demands and requirements, more than one mode of transport may be needed to deliver the goods to their destination.
When selecting the most suitable mode of transport to get products from point A to B, there are several factors that need to be considered. The selection of the right transportation mode is very critical to the business and the logistic management. An effective use of transportation equipment and modes reduces shipping and logistics costs considerably.
Export planning is not so simple. 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. The important thing is to make the right selection and come up with the right and the most cost-effective combination of modes of transport.
When deciding which mode of transport to use, certain factors should be taken into consideration.
Factors That Play a Key Role in Selecting Mode of Transport Are
1) Cost of Transport
When selecting the best and most suitable transport for exportation of products, the budget is the most important consideration. Costs vary based on the type and amount of goods needed to be transported. It is important to keep in mind that the cost of transport influences the cost of goods.
If heavy or bulky products are being transported over a long distance, inland, then rail transport is the most economical. Land transport, typically by trucks, is best suited for small amount of goods being transported over short distances, as it also saves packing and handling costs. The cheapest mode of transport is water transport, albeit the slowest too, but most suited for heavy or bulky goods that need to be transported over long distances, where time is not an important factor. Air transport is the best option for transportation of perishable, fragile and valuable goods, even though it is the most expensive.
It is important for importers and exporters to 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
The reliability and regularity parameters of different transport modes, differ from each other. The urgency and speed by which the goods are to be delivered, influences the decision as to which mode of transport to use. All modes of transport, land, ocean and air, are affected by bad weather such as heavy rains, snow, fog and storms, which may cause delays.
Another crucial factor influencing the selection of a mode of transport is the safety and security of goods in transit. Land transport is more preferred to railway transport because the losses are less.
From the safety point of view, sea transport is the most risky, as water transport exposes the goods to the perils of sea, and the long duration of travel adds to the risk factors. Certain types of packaging also helps in safeguarding the goods in transit and are highly recommended, but they do influence costs as well.
Some goods also require special facilities such as refrigeration or special security measures that need to be taken into consideration when selecting a mode of transport.
4) Characteristics of goods
When selecting the mode of transport, the size and weight of goods play a crucial role. Land and air transport primarily cater to fragile and small shipments. Rail and sea transport are a more suitable option for heavy shipments.
How dangerous, fragile or high value the products are, also influences the selection of the transport mode. For breakable and fragile, high value products, air and land transport are the best option.
Transportation costs are add-on cost on the sale price of a product. The transport costs add to how much the goods can be sold for, to make a profit. Hence budget requirements need to be considered accordingly. The volume or weight of the goods play a key role in determining which method of transport is the best value. Also the type of good in terms of urgency of delivery, such as how perishable the goods are, and how quickly they need to arrive, influences the choice of mode of transport.
Typically, water transport is the most cost effective, and is mostly suitable when there is no hurry, and the goods are bulky or heavy, and need to be carried a long distance. Rail transport is relatively inexpensive for these types of goods. The advantage of road transport, in terms of cost is that there are savings to be made on the costs of handling and packaging. Air transport is one of the most expensive modes, but has the benefit of being fast, so is best suited for perishable and fragile goods.
Air transport is the best option for long distances requiring urgent and speedy transport, to meet deadlines or because the goods are perishable or fragile. Motor transport is faster than rail transport for short distance deliveries. However, for longer haul journeys rail is faster and more economical.
Water transport is often not suitable where time is a factor.
The most flexible mode of transport is Motor or road transport, as it is not constrained by factors such as flight times, shipping routes or pre-scheduled timetables. Motor transport can operate day and night, at personal convenience, to suit all time frames, and has the added advantage of door-to-door delivery.