Mode of Transport for Export Import Business:-
It is very crucial to understand and know what type of transportation will be cost-effective and efficient. For international trade, mode of transport and distribution are been considered as the key factors. The choice would actually depend based on –
- Higher customer services
- Timely delivery schedules
- Lower logistics cost
- Proper inventory levels
- Import and export can be done through four different ways, namely –
The mode of transport depends on the terms specified in the contract entered between the exporter and importer. These are the following modes of transport that are normally, mentioned in the contract.
1. Sea Transport :-
There is a popular phrase – Old is Gold. Sea transport is the oldest mode of transportation used in transporting goods. It is categorised by low cost and high capacity. It is suitable for the shipments of large volume of objects transported for long distances when the delivery time is not important. International transportation could be delayed due to slow speed, environmental aspects, inflexible routes & schedules.
However, the sea transport includes the limited network of routes and costs higher for loading, unloading and trans-shipment of commodities. To reach the final destination from sea ports further transportation is also needed and there may be additional costs for land transportation.
2. Air Transport :-
Air transport is the least utilized mode of transport in international trade and the newest among all modes of transport. It is the best way for quick delivery and distribution of goods. It is the safest methods of transport and variety of goods can be imported or exported through this mode.
Air transport involves higher costs than modes and not suitable for all items and also need to pay taxes at each airport. It is highly expensive but still used by traders on a large scale. The other transportation is needed to reach the goods from the airport to its destination.
3. Rail Transport :-
Rail transport is a cost effective and efficient way to move the goods. It plays a major role in the regional trade of the country and commerce activities. It can carry relatively large quantities of goods from medium to long distances and other advantages include low transport costs, environmental friendly and higher reliability than road transport. Most of the cargo’s transported by railways comprises bulk items such as coal, iron ore, cement, fertilizers, raw material for steel plants, finished steel products and petroleum. In remote regions, routes and timings are inflexible. There are some regions all over the globe have a proper rail system which is a huge setback for remote regions.
4. Road Transport :-
Road transport is more flexible than any other mode of transport. It is easy to track shipments, the consignments can be secure and private, schedule transport and pay the relevant fees. It includes the ability to deliver cargo from door to door with high flexibility and without need for further trans-shipment. The way of motor vehicles network and crossing national borders is quick and efficient.
There are also so many risks for road transport such as long distances cargo delivery takes more time due to traffic delays and breakdowns. There is the risk of goods beings damaged and toll charges are high in some countries.
Factors affecting selection of the mode of transport
Security –
It is very important to protect the goods from partial and full damage. In terms of safety of products, transportation through sea is riskier as compared to other modes of transport. To protect the goods in transit, some specific types of packaging are been advised.
Transportation Cost –
When choosing how to best transport products for exportation, your budget should be the most important factor when making decisions. Cost of transport will influence the cost of goods. Water and rail transport is suitable for bulky and heavy goods, while land transport is best for small goods. Air transport is suitable for expensive and perishable goods.
Availability –
In terms of door-to-door transport, availability should be considered.
Reliability and service regularity –
Transport modes differ in regularity and reliability. Decision on mode of transport would be influenced by the speed and urgency of the product. Land, air and ocean transport are usually been affected by that of the bad weather such as snow, heavy rains, storms and fog, which may cause delays.
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