Insights
Understanding the differences between air, sea (ocean), and land freight transportation services is complex. Each mode offers unique advantages and drawbacks, and the differences between modes will have a dramatic impact on both direct and indirect transportation costs.
Despite those facts and economic instability, the industry is forecast to increase in demand. As reported by Supply Chain Quarterly, “The baseline trucking demand forecast is for recovery by year-end, resulting in 2023 tonnage growth of 1.54%. Air cargo tonnage growth is forecasted slower than in recent years at 3.0% due to slowing e-commerce growth.” Meanwhile, maritime or sea freight transport services are expected to rise by 1.5%.
As freight forwarders, importers, exporters, and other shippers look for ways to increase efficiency, the differences between these freight options and their various transit time influencers will play a vital role. And it’s imperative for everyone to understand their basics.
Air Freight Transportation Services – Speed, Reliability & High Cost
The first and most iconic symbol of a speedy shipping option is air. Air freight shipping methods provide the necessary resources to help move freight efficiently and quickly. Unlike other types of freight, air transport gets freight to the destination in same-day or next-day delivery windows, depending on the distance.
With ever-increasing global demand, air freight services are gaining greater relevance and use, especially as e-commerce swells and same-day services become the norm. Plus, many are willing to pay a premium for this expedited service level and will overlook its higher costs.
Why?
Air freight is capable of carrying large volumes of goods over long distances in a short amount of time, allowing shippers to deliver products faster and more efficiently. Further, the regulation of the industry allows for enhanced traceability and accountability in shipping. But, it’s important to understand the added costs of going by air.
Air freight shipping is inherently more expensive than truckload or less-than-truckload, making it a difficult option for those concerned with total landed costs. It’s far from sustainable and is the most environmentally costly form of transportation. The cost difference can vary depending on the size and weight of the shipment, as well as the distance it must travel. Fuel surcharges and specific regulations further impact costs and expectations.
For instance, shipping lithium-ion batteries or other hazardous goods will carry additional risk versus sending textiles by air.
The true trick is knowing when to ship by air and assessing all other options that may be more cost-effective. But even still, additional issues, such as terminal operating differences, can dramatically affect overall air cargo plans. As a result, meaningful supply chain optimization of air freight must go far beyond simply choosing this speedy mode over others.
Sea Freight Transportation Services – Long Lead Times, Reliable & Cost-Effective
Sea or ocean freight services provide a reliable, efficient, and cost-effective option for businesses that need to move goods on an international scale.
Sea freight transportation offers a number of advantages for international shipping, including significant cost savings. Additionally, some shipments, especially oversized freight, may require seafaring transport due to size limitations in air cargo. This is especially appealing for businesses that need to move bulk items and/or who have extended lead times. Additionally, sea freight services are known for their reliability and consistency due to the fact that vessels largely follow a fixed route over time.
On the other hand, sea freight can take longer than any other form of transport due to the nature of international shipping routes. This means that businesses may need to evaluate their lead times and overall needs again. Still, it’s more efficient.
Land Freight Transportation Services – Speed Variability, Cost Effective & Fairly Reliable
Land freight, which includes both over-the-road (OTR) and rail transportation, offers benefits and opportunities not present in the other two primary modes. However, it’s important to realize transport by air, sea, or rail will inherently require OTR transport at some point, whether the first or final mile. In this form, OTR transport is well-suited for short- or long-haul distances across a contiguous strip of land and offers cost benefits over the air. However, OTR is subject to risk.
Such risks derive from external influences that can lead to delays or added expenses, such as regional variability in fuel costs versus traffic conditions.
Rail transport can handle the longest leg of land transport. Using rail is conditioned on lead times (speed of transport) and rail ramp locations. But again, the first and last mile needs OTR for delivery.
Work With the Experts in Blending Freight Options to Create the Right Service Level for Your Needs–GEODIS.
Shippers have the responsibility to ensure loads are packaged and arrive at their destination on time. This can be a daunting task, especially if goods need to travel across international borders and across multiple modes. Working with an expert in global forwarding provides shippers with the necessary resources and knowledge needed to create the perfect multimodal or single-mode transportation strategy for their business.
Above all else, remember this simple breakdown:
- Air – Expensive, Fast & Reliable
- Sea – Low-Cost, Slow & Reliable
- Land
- Rail – Low-Cost, Slow & Reliable
- OTR – Cost, Speed & Reliability All VARY.
- An expert to help you blend all freight options to get the right mix – PRICELESS!
Outside experts, e.g., GEODIS, help shippers create the most cost-effective routes. They will also provide resources to track and trace shipments throughout the entire journey from procurement through sea, rail, truckload, LTL, parcel, or any other type of freight shipping and beyond. In turn, your network partner works together with your team to maintain global compliance with all regulations to ship freight properly and avoid penalties. This all occurs atop their inherent experience in finding new opportunities for optimization. Get started by connecting with a GEODIS expert to get your freight quote today.
