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Freight transport, also referred as freight forwarding, is the physical process of transporting commodities and merchandise goods and cargo. [1] The term shipping originally referred to transport by sea but in American English, it has been extended to refer to transport by land or air (International English: "carriage") as well. "Logistics", a term borrowed from the military environment, is also used in the same sense.
In 2015, 108 trillion tonne-kilometers were transported worldwide (anticipated to grow by 3.4% per year until 2050 (128 Trillion in 2020)): 70% by sea, 18% by road, 9% by rail, 2% by inland waterways and less than 0.25% by air. [2]
Land or "ground" shipping can be made by train or by truck (British English: lorry). Ground transport is typically more affordable than air, but more expensive than sea, especially in developing countries, where inland infrastructure may not be efficient. In air and sea shipments, ground transport is required to take the cargo from its place of origin to the airport or seaport and then to its destination because it is not always possible to establish a production facility near ports due to the limited coastlines of countries.
Much freight transport is done by cargo ships. An individual nation's fleet and the people that crew it are referred to as its merchant navy or merchant marine. According to a 2018 report from the United Nations Conference on Trade and Development (UNCTAD), merchant shipping (or seaborne trade) carries 80-90% of international trade and 60-70% by value. [3] : 4 On rivers and canals, barges are often used to carry bulk cargo.
Cargo is transported by air in specialized cargo aircraft and in the luggage compartments of passenger aircraft. Air freight is typically the fastest mode for long-distance freight transport, but it is also the most expensive.
Cargo is exchanged between different modes of transportation via transport hubs, also known as transport interchanges or Nodes (e.g. train stations, airports, etc.). Cargo is shipped under a single contract but performed using at least two different modes of transport (e.g. ground and air). Cargo may not be containerized.
Multimodal transport featuring containerized cargo (or intermodal container) that is easily transferred between ship, rail, plane and truck.
For example, a shipper works together with both ground and air transportation to ship an item overseas. Intermodal freight transport is used to plan the route and carry out the shipping service from the manufacturer to the door of the recipient. [4] [5]
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The Incoterms (or International Commercial Terms) published by the International Chamber of Commerce (ICC) are accepted by governments, legal authorities, and practitioners worldwide for the interpretation of the most commonly used terms in international trade. Common terms include:
The term "best way" generally implies that the shipper will choose the carrier that offers the lowest rate (to the shipper) for the shipment. In some cases, however, other factors, such as better insurance or faster transit time, will cause the shipper to choose an option other than the lowest bidder.
Door-to-door (DTD or D2D) shipping refers to the domestic or international shipment of cargo from the point of origin (POI) to the destination while generally remaining on the same piece of equipment and avoiding multiple transactions, trans-loading, and cross-docking without interim storage.
International DTD is a service provided by many international shipping companies and may feature intermodal freight transport using containerized cargo. The quoted price of this service includes all shipping, handling, import and customs duties, making it a hassle-free option for customers to import goods from one jurisdiction to another. This is compared to standard shipping, the price of which typically includes only the expenses incurred by the shipping company in transferring the object from one place to another. Customs fees, import taxes and other tariffs may contribute substantially to this base price before the item ever arrives. [6]
Maritime transport or more generally waterborne transport, is the transport of people (passengers) or goods (cargo) via waterways. Freight transport by sea has been widely used throughout recorded history. The advent of aviation has diminished the importance of sea travel for passengers, though it is still popular for short trips and pleasure cruises. Transport by water is cheaper than transport by air or ground, but significantly slower for longer distances. Maritime transport accounts for roughly 80% of international trade, according to UNCTAD in 2020.
Containerization is a system of intermodal freight transport using intermodal containers. Containerization, also referred as container stuffing or container loading, is the process of unitization of cargoes in exports. Containerization is the predominant form of unitization of export cargoes, as opposed to other systems such as the barge system or palletization. The containers have standardized dimensions. They can be loaded and unloaded, stacked, transported efficiently over long distances, and transferred from one mode of transport to another—container ships, rail transport flatcars, and semi-trailer trucks—without being opened. The handling system is mechanized so that all handling is done with cranes and special forklift trucks. All containers are numbered and tracked using computerized systems.
An intermodal container, often called a shipping container or ISO Container, is a large standardized container designed and built for intermodal freight transport, meaning these containers can be used across different modes of transport – such as from ships to trains to trucks – without unloading and reloading their cargo. Intermodal containers are primarily used to store and transport materials and products efficiently and securely in the global containerized intermodal freight transport system, but smaller numbers are in regional use as well. These containers are known under a number of names. Based on size alone, up to 95% of intermodal containers comply with ISO standards, and can officially be called ISO containers. Many other names are simply: container, cargo or freight container, shipping, sea or ocean container, container van or sea van, sea can or C can, or MILVAN, SEAVAN, or RO/RO. The also used term CONEX (Box) is a technically incorrect carry-over usage of the name of an important predecessor of the international ISO containers, namely the much smaller prior steel CONEX boxes used by the U.S. Army.
A container ship is a cargo ship that carries all of its load in truck-size intermodal containers, in a technique called containerization. Container ships are a common means of commercial intermodal freight transport and now carry most seagoing non-bulk cargo.
The Incoterms or International Commercial Terms are a series of pre-defined commercial terms published by the International Chamber of Commerce (ICC) relating to international commercial law. Incoterms define the responsibilities of exporters and importers in the arrangement of shipments and the transfer of liability involved at various stages of the transaction. They are widely used in international commercial transactions or procurement processes and their use is encouraged by trade councils, courts and international lawyers. A series of three-letter trade terms related to common contractual sales practices, the Incoterms rules are intended primarily to clearly communicate the tasks, costs, and risks associated with the global or international transportation and delivery of goods. Incoterms inform sales contracts defining respective obligations, costs, and risks involved in the delivery of goods from the seller to the buyer, but they do not themselves conclude a contract, determine the price payable, currency or credit terms, govern contract law or define where title to goods transfers.
Intermodal freight transport involves the transportation of freight in an intermodal container or vehicle, using multiple modes of transportation, without any handling of the freight itself when changing modes. The method reduces cargo handling, and so improves security, reduces damage and loss, and allows freight to be transported faster. Reduced costs over road trucking is the key benefit for inter-continental use. This may be offset by reduced timings for road transport over shorter distances.
In transportation, freight refers to goods conveyed by land, water or air, while cargo refers specifically to freight when conveyed via water or air. In economics, freight refers to goods transported at a freight rate for commercial gain. The term cargo is also used in case of goods in the cold-chain, because the perishable inventory is always in transit towards a final end-use, even when it is held in cold storage or other similar climate-controlled facilities, including warehouses.
A cargo ship or freighter is a merchant ship that carries cargo, goods, and materials from one port to another. Thousands of cargo carriers ply the world's seas and oceans each year, handling the bulk of international trade. Cargo ships are usually specially designed for the task, often being equipped with cranes and other mechanisms to load and unload, and come in all sizes. Today, they are almost always built of welded steel, and with some exceptions generally have a life expectancy of 25 to 30 years before being scrapped.
A merchant ship, merchant vessel, trading vessel, or merchantman is a watercraft that transports cargo or carries passengers for hire. This is in contrast to pleasure craft, which are used for personal recreation, and naval ships, which are used for military purposes.
CMA CGM is a French shipping and logistics company founded in 1978 by Jacques Saadé. It is the third largest container shipping company in the world, with a presence in 160 countries through 400 offices, 750 warehouses, 155,000 employees and a wide fleet of 593 vessels. CMA CGM serves 420 of the world’s 521 commercial ports and operates 257 shipping lines. The company is headquartered in Marseille, France. The name is an acronym of two predecessor companies, Compagnie Maritime d'Affrètement (CMA) and Compagnie Générale Maritime (CGM), which translate as "Maritime Freighting Company" and "General Maritime Company", respectively.
Rail freight transport is the use of railways and trains to transport cargo as opposed to human passengers.
Truckload shipping is the movement of large amounts of homogeneous cargo, generally the amount necessary to fill an entire semi-trailer or intermodal container. A truckload carrier is a trucking company that generally contracts an entire trailer-load to a single customer. This is as opposed to a less-than truckload (LTL) company that generally mixes freight from several customers in each trailer. One advantage Full Truckload (FTL) carriers have over Less than Truckload carriers is that the freight is never handled en route, whereas an LTL shipment will typically be transported on several different trailers. Truckload shipments are typically run on 48' or 53'dry van trailers which will hold 24 or 26 pallets respectively.
A freight rate is a price at which a certain cargo is delivered from one point to another. The price depends on the form of the cargo, the mode of transport, the weight of the cargo, and the distance to the delivery destination. Many shipping services, especially air carriers, use dimensional weight for calculating the price, which takes into account both weight and volume of the cargo.
Less-than-truckload shipping or less than load (LTL) is the transportation of an amount of freight sized between individual parcels and full truckloads. Parcel carriers handle small packages and freight that can be broken down into units less than approximately 150 pounds (68 kg). Full truckload carriers move entire semi-trailers. Semi-trailers are typically between 26 and 53 feet and require a substantial amount of freight to make such transportation economical. The term LTL can refer to the freight itself, or to the carrier that transports the such freight.
A freight forwarder or forwarding agent is a person or a company who co-ordinates and organizes the movement of shipments on behalf of a shipper by liaising with carriers. The carriers may use a variety of shipping modes, including ships, airplanes, trucks, and railroads, and often use multiple modes for a single shipment. A freight forwarder does not move the goods but acts as an agent in the logistics network and will carry out freight consolidation, rate negotiations, shipment tracking, customs and other documentation, among other tasks. FIATA describes a freight forwarder as the "Architect of transport".
Drayage is the transportation of shipping containers by truck to its final destination. Drayage is often part of a longer overall move, such as from a ship to a warehouse. Some research defines it specifically as "a truck pickup from or delivery to a seaport, border point, inland port, or intermodal terminal with both the trip origin and destination in the same urban area". Port drayage is the term used when describing short hauls from ports and other areas to nearby locations. It can also refer to the movement of goods within large buildings such as convention centers. Drayage is a key aspect of the transfer of shipments to and from other means of transportation. The term drayage is also used for the fee paid for such services.
In the ocean shipping trade, neo-bulk cargo is a type of cargo that is a subcategory of general / break-bulk cargo, that exists alongside the other main categories of bulk cargo and containerized cargo. Gerhardt Muller, erstwhile professor at the United States Merchant Marine Academy and Manager of Regional Intermodal Planning of the Port Authority of New York and New Jersey, promotes it from a subcategory to being a third main category of cargo in its own right, alongside containerized and bulk cargo.
A shipping container is a container with strength suitable to withstand shipment, storage, and handling. Shipping containers range from large reusable steel boxes used for intermodal shipments to the ubiquitous corrugated boxes. In the context of international shipping trade, "container" or "shipping container" is virtually synonymous with "intermodal freight container", a container designed to be moved from one mode of transport to another without unloading and reloading.
A bill of lading is a document issued by a carrier to acknowledge receipt of cargo for shipment. Although the term is historically related only to carriage by sea, a bill of lading may today be used for any type of carriage of goods. Bills of lading are one of three crucial documents used in international trade to ensure that exporters receive payment and importers receive the merchandise. The other two documents are a policy of insurance and an invoice. Whereas a bill of lading is negotiable, both a policy and an invoice are assignable. In international trade outside the United States, bills of lading are distinct from waybills in that the latter are not transferable and do not confer title. Nevertheless, the UK Carriage of Goods by Sea Act 1992 grants "all rights of suit under the contract of carriage" to the lawful holder of a bill of lading, or to the consignee under a sea waybill or a ship's delivery order.
The freight technology sector, also known as FreightTech, refers to software companies and technologies which assist in supply chain management and the movement of freight. In the five years following 2014, investment in FreightTech companies grew from $118 million to $3 billion per year.
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