Executive Summary
The firm has been able to maintain a large consumer base based on its efficient delivery by means of air and sea freight based on the urgency and size of the phones in transit. Air transportation has been very effective in terms of transporting phones that are delicate and on high demand in the US. Sea shipment has been effective in transporting the phones in bulk, especially in cases when they are not in high demand. There are however various advantages and disadvantages associated with each mode of transportation of the items which have been addressed and regulations, policies and drawbacks that the company should look into.
Air Transport
Pros
Air transport is efficient mode of transport for goods with high urgency as it is fast and may thus be able to cover he distance between the two countries. In terms of custom duties, air transport provides cheaper storage facilities for the goods. Shipment by air is much more reliable than shipment by sea. Most international airlines stick to their scheduled time without failure as compared to the sea vessels. Flights are very regular as flights between China and US are fixed daily and hence a single delay can be fixed in a matter of hours, thereby ensuring that customers are not kept waiting for days, or weeks. Accessibility of the shipment is also another factor to consider since air shipments are more inland than the sea which is at the coastline. It is easy for the suppliers to access the goods, especially if they are located in the huge cities that cannot access the coastline.
Delegate your assignment to our experts and they will do the rest.
Cons
Despite being an efficient and effective mode of transportation for goods, air transport is quite expensive in comparison to other modes of transport, specifically sea transport.
Air transport also contributes to pollution of the environment, which is contrary to the responsibility of the company. Being a public company, it is expected to contribute to environmental conservation even though the alternative forms of transport are quite slower and unreliable. Air transportation also causes noise pollution which is unhealthy to the population (Rau, 2011).
Sea Freight
Pros
On the other hand, sea transport enables the firm to maximize the transportation load while minimizing on the costs since it provides a cheaper mode of transportation for bulky goods (AnyLogic, n.d.). Sea freights also minimize the risk of damage of goods in transit since the slow travel ensures that goods are safe. This mode of transport is also indispensable o trade as it allows the country to gain markets in other countries where the transport vessel parks oat the port to refill.
Cons
In as much as sea transport enables the firm to transport goods in bulk, sea transport takes longer time to deliver and this may inconvenience most customers who need the mobile phones urgently. As a result, the company may get negative reviews which will ultimately cause it to lose some of its customers and thus result in losses. Water transport is also not reliable as bad weather affects transportation. Storms and hurricanes hinder the movement of vessels at sea and also cause the delivery of goods to be delayed. Bad weather may also destroy the goods in transit, seeing as they are electronic in nature. It is also difficult to monitor goods the exact location of goods at sea since no particular location of the vessel can be established and no scheduled time of arrival can be given. The customs and excise duties rendered on imported goods is also relatively expensive and may cause the company to spend too much money on exporting the mobile phones.
In terms of environmental pollution, oil spillage from ships causes a layer which prevents aeration to aquatic life causing pollution and suffocation thereby destroying it.
Regulations
The company should ensure that the protective casings on the phones are waterproof and able to protect the screen and other parts of the phone from getting damaged during transport. It should also give it’s a customers a week’s notice on arrival of goods so as to cater for any delays that may be experienced during transportation.
Policies
The company should establish warehouses close to the airport and coastline so as to cut down on any costs that may be incurred when the goods are being stored in a warehouse within the airport or at the sea port. This will ensure that there is an effective supply chain in the cities surrounding the ports and the manager of the warehouse will be able to keep regular and accurate statistics of the goods being supplied (AnyLogic, n.d.). This way the warehouse manager will be able to keep track of the movement of the product and be accountable for the goods and the amount of money deposited into the company’s account. This will also ensure that the company is able to make maximum profits which will cover up for the losses incurred during transportation.
The firm should also provide a company car to all the warehouses to ensure that the goods can be transported whenever they are needed. The company car will also ensure that the goods are safe, contrary to hiring one which may not handle the goods with enough care.
Drawbacks
Developing warehouses next to ports will require high levels of security to ensure that the goods are well protected from unauthorized persons. This will incur extra costs on the firm since more security personnel will be required to guard the warehouses and expensive technology will have to be purchased to ensure that the goods are secure. This may result in the company increasing the prices of mobile phones s as to cater for these expenses,
References
AnyLogic. (n.d.). Transportation and Warehousing. Retrieve from http://www.anylogic.com/areas/transportation
Rau, R. (2011, August). 4 Factors for Considering Air Freight vs. Ocean Freight. Universal Cargo. Retrieved from https://www.universalcargo.com/4-factors-for-considering-air-freight-vs-ocean-freight/
