Air and Ocean Shipping Options: The Strategy of Modal Shifts
By May 7, 2014 oncomments powered by Disqus
Ursula Borzym provides a comparison between ocean and air shipping and dicusses how modal shift may bring long term benefits and solutions to a supply chain
We live in a world of customization and personalization. Everything from the color of your phone to the side dish you get with fast food is all tailored to an almost individual level. The transportation industry is no different. There are options for everyone’s unique supply chain.
However, sometimes when looking to manage costs, many shippers forget to take advantage of those options. One such option is the mode of transportation. When made for the correct reasons, a modal shift can bring powerful solutions and long term benefits to any supply chain.
So let’s look at air and ocean options. When is it right to switch from one to the other? When does it make sense to stick with your current mode? Like many logistics questions, these questions do not always come with easy answers. Because we live in a world of options, the answers aren’t always one size fits all.
Should I use air or ocean service?
Typically, the number one reason to choose air service is the speed of delivery. Moving your cargo through the air allows for a truncated time table compared to ocean service. However, air service does come with one main drawback: Price. The cost difference between ocean and air service can be severe. This focus on cost is a large contributor for shippers to look at ocean shipping options. Ongoing alliances between ocean carriers build reliability and integrity for ocean service, which makes the mode an even more appealing option—even for time-sensitive freight like perishables, fashion, and auto parts. By adding predictability to ocean service, a strategic, optimized plan for the rest of the supply chain can help meet delivery dates and maximize shelf life.
Will ocean service really work for me?
As I mentioned earlier, not all options are right for all people. For example, despite the lower costs and increased predictability of ocean shipments, certain commodities will continue to rely on air service. Items with a very short shelf life, companies with huge inventory carrying costs, and commodities forbidden from ocean vessels are just a few examples of supply chains that are probably not ready to shift from air to ocean service just yet.
And while the alliances between ocean carriers produce increased reliability, those same alliances can cause complications. For example, if three ocean carriers work together, one week you may have a vessel from one carrier, and another week you have the same vessel but a different carrier. Each carrier has their own set of rules about what commodities are allowable. So even by shipping the same product on the same vessel every week, if a different carrier is in charge, your product could be denied because the rules have changed.
Is there anything I can do to make it easier?
There are always strategies and best practices you can utilize to streamline any process. The right logistics provider is key to managing strategic modal shifts. Be sure to communicate with your provider to ensure clear visibility and expectations. While your provider may be great at securing air service, having the maturity to do the same quality job for ocean service may not be possible. Work with a provider who has the size and scale across all modes you want to utilize to ensure you aren’t limiting your capabilities or potential savings.