Type of Transport: The Choice Between Rationality and Contingency

Even in ancient times, freight transport was fundamental for the commercial development of every people. In more recent times, with the advent of globalization, freight transport has assumed the role of a true cornerstone of the economy.

The main types of transport currently used worldwide are: air, sea, and land. The choice among the various types of transport has always been influenced by rational considerations guided primarily by a series of drivers, such as cost, time, type of goods, and value of goods.

In this article, we present an in-depth look at the main types of transport, highlighting the advantages and objective limitations of each.

Road Transport: Strengths and Limitations

Road transport is the primary type of transport used in Italy and is the only type that allows for “door-to-door” service, both in “dedicated” and “groupage” modes.

Its strengths:

• Reduced costs
• Door-to-door capability
• Reduced transit times for national and continental shipments
• Possibility of multiple origin and destination points
• Simplified traceability

Its limitations:

• Problems and delays caused by force majeure (traffic, vehicle breakdowns, etc.)
• Not suitable for intercontinental travel, due to time and cost
• High environmental impact

Rail Transport: Strengths and Limitations

Rail transport is particularly suitable for moving large quantities of goods. It is potentially the most cost-effective, but the lack of supporting infrastructure negates this possibility, due to the need for additional movements (e.g., by road).

Its strengths:

• Reduced costs with suitable infrastructure
• Flexibility for the type, shape, and size of goods to be transported
• Reduced impact of force majeure (traffic, etc.)
• Faster than sea transport

Its limitations:

• Need for integration with road transport due to infrastructure shortages

Sea Transport: Strengths and Limitations

Ship transport is used for long distances, especially when the goods to be transported do not have a high value and do not present a high risk of damage/perishability.

Its strengths:

• Reduced costs over long distances compared to other transport types
• Very high carrying capacity
• Ability to transport dangerous goods

Its limitations:

• High transit times
• Need for integration with road transport
• Traceability not always immediate
• High incidence of force majeure

Air Transport: Strengths and Limitations

Air transport is the safest and fastest type of transport. For these reasons, it is used for urgent and/or high-value goods.

Its strengths:

• Safety
• Speed

Its limitations:

• High costs
• Limitations in terms of type, weight, and size of goods to be transported

Transport Today: The Effects of the Pandemic and the War

How are choices about the type of transport changing today, after witnessing the consequences of a pandemic and a war, whose effects are still tangible?

We know that the scarcity of some commodities and the increased demand for others has led to a rise in prices for raw materials and semi-finished products. At the same time, we have witnessed the paralysis of logistics and transport, resulting in a partial interruption of transport and delivery delays. Companies have therefore found themselves, and still are, having to combat strong pressures in supply chains and adopt completely new models in Supply Chain Management.

In light of the new situation, among the drivers to evaluate when choosing the type and means of transport today, we must consider another, the most important: availability.

The availability of the type and means of transport is not an absolute concept and varies based on the specific contingency. In just a few months, for example, we have witnessed singular and contrasting phenomena:

• Lack of container availability departing from China, resulting in
  • uncontrolled increase in freight rates
  • delivery delays
  • adoption of alternative transport methods: intermodal with a focus on rail transport
• Blockages of rail transport for connections between China and Europe, regarding passage through Russian territory, due to the Russian invasion of Ukraine and consequent geopolitical tensions. This has the following main consequences:
  • the search for new sea routes
  • increased costs
  • further deterioration of the global supply chain

So, what advice can we offer today on the topic of transport to try and contain, as much as possible, delays and costs?

• Support and encourage infrastructure development.

The potential of rail transport is not fully exploited due to a lack of infrastructure. Strengthening it would always provide a valid alternative to sea transport, leading to cost reductions.

• Choose the most advantageous terms of delivery.

It’s not about choosing the most advantageous delivery terms for the buyer or seller, but rather allocating transport responsibility to the party with more leverage over freight forwarders, in order to gain an economic and service advantage across the entire Supply Chain.

• Carefully select carriers and freight forwarders.

While striving not to jeopardize relationships with long-standing carriers and freight forwarders, when choosing new ones, it is advisable to consider those with financial and structural solidity, availability of means, and a variety of transport types.

• Sign agreements with freight forwarders and review them periodically.

A written agreement always represents an additional form of protection that, in cases of reduced availability of means from freight forwarders, can truly make a difference in the level of service.

Periodic review of agreements also allows for adaptation to market changes, always seeking the most convenient solution.

It all comes down to reacting to vulnerability, which contingency sometimes forces upon us, with diversification of possibilities and flexibility.

Makeitalia: Your Ideal Partner for Freight Transport Management

At Makeitalia, we also support companies in managing and optimizing their transport operations.

If you need further information for any business requirements, please contact us without obligation through the dedicated page on our website, available at the following link: Contacts.

We will be happy to listen to your needs and chat with you, to jointly evaluate an optimal process for your company.

Furthermore, we offer a training course dedicated to Road Freight Transport. You can learn more about the program by clicking here.