Road transport is ideal for small consignments whereas rail transport would be suitable for heavy or bulky items. Air transport would be more suitable for perishable and for speedy delivery of goods but it comes at a higher cost. However, sea transport is more ideal for longer distances if time is not a factor. Hidden costs like package cost, insurance premium, finance charges etc. may add to the final cost. Hence, it is important to study all the various factors before choosing the cost-effective transport mode. In the current world where time is money, it is critical to select the correct mode of transportation to deliver goods in an effective manner. The type and volume of goods, delivery timeline, geographical locations and regulatory requirements at different places are some of the major factors that determine the selection of transport mode. The main types of transport modes include air, sea, road and rail transport. Every mode of transport has their advantages and disadvantages. This article discusses the factors that should be taken into consideration when deciding on the transport mode for moving goods.
Nature of Product and Transport Cost
The size, weight and volume of goods plays a vital role in selecting the mode of transport. Air and land transport options are favored for fragile and less weight shipments. If there is no urgency sea and rail transports are suitable for heavy weight and long distance shipments. In the case of fragile, high value and hazardous goods, air and land transport modes are preferred over other modes due to the nature of the goods. Export planning is a not a simple process.
Total cost of transport from “Origin to Destination” would need to be carefully considered when choosing mode/modes of transport. Cost will make a significant impact on the selling price. Thus, the final cost must be decided based on transport cost. Henceforth, budget is the primary consideration for selecting the transportation mode. Rail transport is most economical when heavy or bulky products are being transported over a long distance via land. Land transport, typically by truck, is more suitable for lesser volume of goods for shorter distance. It also saves picking and handling cost. The cheapest mode of transport is water transport, but it is also the slowest mode. However, it is most suitable for heavy and bulky goods that are needed to be transported over longer distances when there is no urgency in delivery of goods. The best option to transport consumable, treasured and fragile goods is air mode although it is typically the most expensive mode. Thus, overall consideration of transportation cost is most important for imports and exports. It is also important to keep in mind the ‘hidden costs’ such as insurance and finance charges while calculating total cost.