What’s your mode?
Matching the Right Loads to the Right Modes
Finding the right freight mode for your shipments shouldn’t be a guessing game. Here’s an easy primer on how to match the two in the most efficient, cost-effective manner.
Despite what you may hear in e-commerce circles, not every shipment needs to get to its destination within one or two days, nor does it require expediting or extra oversight. On the other hand, some freight does require quick attention, faster delivery, and high levels of shipment visibility.
Somewhere in between these two extremes lie the bulk of orders that are moving around the globe at any given time—at a good clip, but not necessarily with an “extreme” sense of urgency. This is an important point because the mode of transportation that you choose can either help or hurt profit margins and bottom lines.
To make sure your shipments get to their destinations on time and without running up the cost meter, here’s an easy primer on how to match up the right loads with the right modes:
Full Truckload (TL): Shipping by truck is a popular freight option that’s used around the world. In the U.S. alone, over 70% of all the freight tonnage moves via truck. According to the ATA, these vehicles move 10.5 billion tons of freight annually using more than 3.4 million heavy-duty Class 8 trucks and with the help of more than 3.5 million truck drivers. For shippers, the most basic option is full truckload or “TL.” Used when there is enough product to fill an entire truckload, this mode reserves all of the space within a certain vehicle (usually a semi-trailer) for a single shipper and, in most cases, for a single destination. Full truckload can be especially beneficial for shippers whose products can’t come in contact with other products (e.g., those that may contaminate the freight), that will be redistributed via a centralized transportation hub, and/or that need to go from Point A to Point B in the most direct manner possible.
Here’s the bottom line: If your products can fill a full truckload (about 26 pallets or 3,500sf for a 28’ to 53’ dry vehicle, for example), and if you are delivering the goods to a single location, then TL is your best choice.
Less-than-Truckload (LTL): With this mode, you’ll be sharing space with other shippers, but in the process you’ll also be saving money (compared to TL). According to the ATA, LTL is usually meant for a quantity of freight “less than” that required for the application of TL rate (typically less than 10,000 pounds). In most cases, LTL freight weighs about 1,000-1,500 pounds and comprises a single pallet, but that weight and girth can increase according to the shipper’s individual needs (go too far beyond this average, however, and the shipment may be classified as TL). Most TL providers will charge you a “per mile” rate, which may vary according to what’s being shipped, the equipment being used, the distance that the freight will travel, and the total service time.
Here’s the bottom line: When you have too much stuff to ship via parcel but not enough product to fill an entire truckload, then LTL is usually the most economical choice.
Air: In today’s “we need that shipment yesterday” business environment, air has become a popular choice for shippers that have same-day, next-day, and two-day shipping requirements. According to the International Air Transport Association (IATA), air cargo transports over $6 trillion (USD) worth of goods and accounts for approximately 35% of world trade by value. Best for time-sensitive shipments, airfreight is reliable, speedy, and more costly than truck, rail, or ocean. However, when you need to get that critical part out the door and into your customer’s hands by the following morning—or risk having that customer’s assembly line be offline for a day or more—air freight comes to the rescue. In most cases, airfreight takes just a few days (or less) in exchange for a fee that’s about five to six times more expensive then ocean.
Here’s the bottom line: When you need to get the goods to their destination within a few days (or less) and shipping costs are less important than timeliness, opt for air freight.
Ocean: Most international shipments make their way in and out of the U.S. via ocean freight. So, if you’re transporting a large shipment that has 10-12-days (depending on weather and nautical conditions) to reach its destination, then ocean will be your best bet. When you go by sea, your shipments will be packaged securely for transport and then loaded onto shipping containers. Those containers come in several sizes, with 20-foot, 40-foot, and 40-foot high cube being the three most common options (the carriers have their own containers and volumes vary slightly according to the individual company). When they reach land, those containers (or, their contents) will be loaded onto trucks, rail, planes, or intermodal and transported to their final destination.
Here’s the bottom line: Air freight may be faster, but ocean shipping offers a reliable and cost-effective way to get your goods from one country to the next in a more eco-friendly way (since container ships have a lower carbon footprint than their airborne counterparts).
Intermodal: A combination of truck/rail/truck transport, intermodal is a good choice for shippers whose goods have to cover long distances and multiple modes of transportation. The Intermodal Association of North America (IANA) reports that a fleet of more than 34.5 million containers circling the globe is responsible for moving more than half of a billion shipments between shippers and customers worldwide on an annual basis. And, that about 95 percent of the world’s manufactured goods at some time travel in a container before they arrive at their final destinations. If, for instance, your shipment of garments is coming to New York from India—and if those goods need to be delivered to a retailer that has a Midwestern distribution hub—then intermodal may be the most viable option. However, if those garments have to be at that Midwestern hub quickly, then truckload is generally faster than rail.
Here’s the bottom line: The combined use of road, ocean, and rail transportation to get the goods across long distances makes intermodal an attractive choice for non-rush shipments.
Rail: If you’re transporting over long distances and/or shipping bulk items to your customers, don’t overlook rail as a viable mode of transportation. Often used as part of the intermodal process, rail is less flexible than over-the-road transport, but it can be more cost-effective when your freight has to cover a long distance (and isn’t in a huge rush to get there). A company that’s shipping bulk commodity products like grain, rice, or ore, for instance, will often use rail to cover those distances. Whether you need specialized cars (i.e., those that enable easy filling), refrigerated cars (for perishable items), or liquid cargo tanks, rail can usually accommodate.
Here’s the bottom line: If your company is situated near a railhead, and if your goods have to cover long distances and in a non-urgent environment, then rail will be a good option for getting those products to their destinations.
At DB Schenker, we can help you determine which transit mode works best for your specific shipping needs. Our knowledgeable logistics professionals can also help ensure that your products are packaged and loaded for safe transit. Whether you need FTL, LTL, air, sea, intermodal, or a combination of all of the above, call us today to discuss the best possible options for your shipment.
Last modified: 25.05.2017