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An Intro to Shipping: Using Smarter, More Efficient Logistics

Posted on by wildfireDev1

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The United States has the largest freight transportation system in the world.  Viewed objectively, the statistic are staggering: four million miles of public roads…140,000 miles of railroad tracks operated by freight carriers…25,000 miles of navigable waterways…9,800 coastal and inland waterway facilities…and 5,200 public-use airports…

With an infrastructure that most nations only dream of, choosing how you get your products from one point, to another point, and perhaps even to a third point is a crucial decision with a calculus that involves multiple variables.  Shipping products faster, safely and more efficiently is a major contributor to customer satisfaction.

Staying abreast of current trends in the transportation industry can help you maximize your company’s profits.  For instance, today we are seeing many companies beginning to move their supply chain and shipping centers to southern states, where it’s more cost effective.  North Carolina industrial warehouse market in metros like Charlotte and other areas are poised for growth in 2012, especially with sizable new spec warehouses in the pipeline for the first time since 2009.

Shipping to areas with high—and low—population densities tend to affect prices, too. Sending trucks to large cities can be expensive because of city restrictions that prevent access to large trucks.

Shipping to rural areas tends to be more expensive as well.  If there’s no freight to carry out, carriers will charge extra fees to cover the expenses of moving vehicles with no cargo.

Ocean shipping: In 2010, Shanghai surpassed Singapore as the busiest port in the world. In the U.S., Los Angeles ranks as the busiest port, though it’s only the 16th most trafficked in the world.

Ocean shipping accounts for about 90 percent of world trade, with over 50,000 merchant ships operating worldwide. Shipping containers are sized at 20 and 40 feet long, and are sold by LCL (less-container-load) and FCL (full-container-load). Cargo ships are used to carry a wide variety of goods, from clothing to chemicals to cars. Bulk carriers, as its name implies, are ships specially designed for carrying loose items, like grain, in bulk.

Generally, shipping aboard an ocean freighter is much more cost effective, though slower, than shipping via air. Shipping rates depend on a variety of factors, including the weight, length of distance traveled, and product type.

Air:  The busiest cargo airport in the world?  Memphis International Airport.

Coming in second and third are Hong Kong and Shanghai–both are poised to take over as the busiest cargo airports in the world within the next few years.

Moving products via air is the most expensive—but fastest—way to ship.   In recent years, air shipping has become more expensive due to new TSA rules and rising gas prices.

Some companies opt to send a portion of their products by air, and the rest by land or sea, in order to limit their costs. Small, perishable items are ideal for air transport.

Shipping costs for air freight are based on a dimensional weight, rather than an actual weight.

Trucking: Trucking is the most common method of freight transport over land in the United States.

Products can be shipped in a variety of trucks, including dry van, flatbed, small parcel, and LTL, or less-than-truckload.

Trucks are the most common method of transport within the country, both for raw materials like lumber and consumer goods like food products.

Trucking prices are on the rise.  Safety standards currently being set by the U.S. transportation authority will put new restrictions on carriers.

Costs for trucking goods vary depending on weight and distance traveled.

Rail:  Rail shipping is the most cost-effective mode of transportation for products that need to travel more than 700 miles on land. But rail transport can take a while.

A single rail car-load can carry up to 200,000 pounds of freight–which is more than three truckloads.

Rail shipping works best for dense, heavy freight that can be double stacked. Paper products, for example, are ideal for long-distance intermodal shipment since they are not fragile and can be stacked easily into containers.

The price for rail transportation is usually a little bit cheaper than trucking.  A cross-country trip would take between five to seven days.

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