Determining the ideal mode of transportation when shipping goods globally can be challenging, and the process requires ongoing analysis. The analysis will help keep an organization's or a company's supply chain efficiency and cost-effective. While there are many choices when it comes to shipping goods globally, the main decision is to decide whether to use air freight or sea freight. After sourcing materials, a company ought to determine what mode of transportation to use to move its goods. The decision depends on a number of factors. Some of these factors include cost, speed, safety, and capacity (Collings, 2013).
With regard to cost, sea freight seems cheaper, but it is vital to understand how each is billed. In sea freight, ocean shipping is billed by a container (Chi, 2019), whereas in air freight is billed through chargeable weight (Chi, 2019). For large, heavy shipments, sea freight is much cheaper. However, as the size of the shipment decreases, the margin between the cost of air freight and sea freight decreases (Chi, 2019). With regard to speed, air freight is faster compared to sea freight. Air freight takes hours, a day or two to reach its destination, whereas sea freight can take weeks to arrive (Collings, 2013). Therefore, if the goods outsourced are required to reach the destination fast, a company can opt to use air freight. However, if the products that are to be shipped are for future use, the company can decide to use sea freight.
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With regard to safety, air freight is much safer compared to sea freight. Although there are risks of a plane crash, those risks are very small (Chi, 2019). Air regulators also handle, store and secure packages very well. With regard to capacity, sea freight offers more capacity. This is regardless of the sizes and shapes of the goods (Collings, 2013). Overall, the mode of transportation a company opts to use after outsourcing materials depends on the cost of transportation, speed, safety consideration, and capacity of goods to be shipped.
References
Chi, B. (2019). Air freight vs. ocean shipping: Which is right for your cargo? [Online]. Retrieved January 30, 2020, from https://www.chrobinson.com/blog/freight-services/air-ocean-shipping-options-strategy-modal-shifts/
Collings, J. (2013). Ocean freight vs. air freight. [Online]. Retrieved January 30, 2020, from https://shippingandfreightresource.com/ocean-freight-vs-air-freight/#
