The Role of Freight, Transportation and Logistics in Global Trade
07 June 2021
We do import and export
business in a highly complicated world with circuitous global supply chains,
rising shipping rates and increasing import tariffs. Components, raw materials
and finished goods often traverse the globe until they reach their final
destination – the customer. Freight shipments are moved from point-to-point by
transportation and logistics providers. How logistics companies can find their
customers? Export Genius global trade data covers shipping details
including business & contacts of importers & exporters. That crucial
data is useful to transportation & logistics companies in finding the best
prospects.
Getting domestic or
international freight to the proper destination on time and damage free
required tremendous coordination, interaction, networking and experience. Let’s
understand how freight, transportation and logistics all come together.
What is Freight?
The term “freight” refers to
commodities that are transported for commercial purpose via road, rail, sea or
air. When you are shipping goods, you must consider the following factors:
·
Size of the goods.
·
Nature of the goods: high value cargo that need
security, hazardous product or liquid product.
·
Quantity of the goods.
·
Package of goods for transport.
·
Destination, whether domestic, intra-state or
international.
Transportation
The five most common modes of
transport are roadways, airways, railways, waterways and pipelines. The process
of transporting goods, commodities and cargo is known as freight shipping.
Let’s study different kinds of transportation modes with their categories:
Road
Trucks are the most common way
to transport freight across the supply chain. Because of the cost & access,
trucks are the usually the default choice for transporting large quantities of
goods. Freight is categories into Full Truckload (FTL), Less Than Truckload
(LTL), Intermodal (ITML), Chassis and Multimodal (ML).
Rail
Railway is another important
mode of transport to move containers from one place to another. Most FTL or LTL
transport can be handled more economically vial rail freight. It is less
expensive as compared to air & sea transport modes. Freight rail handles the
transport of a huge volume of raw materials and finished goods including –
Intermodal (shipping containers and truck trailers of goods shipped to
retailers), Energy (Commodities including ethanol, crude oil and coal) and
Chemicals (Freight including caustic soda, plastic resin, fertilizers).
Sea
Seaway is a global trade
transportation through which goods in bulk are transported from one country to
another. Use of standardized shipping containers enhances efficiency and helps
to protect goods and ensures faster movement across the supply chain. The
freight forwarders arrange container or space within the shipping agent and the
shipment moves to port where it passes through all customs procedure. Once
freight is loaded, the container is put into the cargo ship and readied for
transport. Upon reaching the destination, the shipment again has to pass
through customs. Once duties and taxes are paid, the freight is released for
delivery and reached to the receiver.
Air
Air freight is most beneficial
for high value and time-sensitive cargo such as goods of
pharmaceutical/healthcare, electronics, aerospace and automotive industry. Air
freight provides a variety of shipping options including – Next Flight Out,
Consolidated, Deferred and Air Charter. Air transport is used for specific
categories of cargo including but not limited to – Perishable goods, Live
animals, Top priority cargo for immediate delivery, Extremely high value cargo,
especially for additional security and Small quantities of goods or cargo with
small volume metric weight.
Who are Involved in Shipping
Freight?
Freight Forwarders
Freight forwarders gather up
and merge small shipments or may also break down larger shipments into smaller
shipments that are more transportable. They can provide a variety of services
like Ocean transportation, Air transportation, Inland transportation,
Documentation of international import & export, Customs clearance, Freight
rate negotiation, Container tracking, Cargo insurance, Warehouse storage and
Customs compliance.
Freight Brokers
Freight brokers connect
shippers with the carriers but do not take responsibility of freight possession.
They handle the negotiation of freight rates, optimize transportation routes,
arrange transportation, optimize shipping logistics and handle insurance claims
on behalf of shippers.
Others
NVOCC, Shipping Carriers,
Customs Brokers, Third Party Logistics Providers and Shippers also have their
respective roles in freight, transportation and logistics.
Are you new to import-export
business? First of all, understand role of every freight, transportation and
logistics service providers. Find out which one suitable for you as per your
cargo needs.
