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.
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:
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).
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).
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 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 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 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.
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.