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In economics, the words cargo and freight refer in particular to goods or produce being conveyed – generally for commercial gain – by water, air or land. Cargo was originally a shipload. Cargo now covers all types of freight, including that carried by rail, van, truck, or intermodal container.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 facility.
Economics is the social science that studies the production, distribution, and consumption of goods and services.
Produce is a generalized term for many farm-produced crops, including fruits and vegetables. More specifically, the term produce often implies that the products are fresh and generally in the same state as where and when they were harvested.
Commerce relates to "the exchange of goods and services, especially on a large scale". It includes legal, economic, political, social, cultural and technological systems that operate in a country or in international trade.
Multi-modal container units, designed as reusable carriers to facilitate unit load handling of the goods contained, are also referred to as cargo, specially by shipping lines and logistics operators. Similarly, aircraft ULD boxes are also documented as cargo, with associated packing list of the items contained within. When empty containers are shipped each unit is documented as a cargo and when goods are stored within, the contents are termed as containerised cargo.
A unit load device (ULD) is a pallet or container used to load luggage, freight, and mail on wide-body aircraft and specific narrow-body aircraft. It allows a large quantity of cargo to be bundled into a single unit. Since this leads to fewer units to load, it saves ground crews time and effort and helps prevent delayed flights. Each ULD has its own packing list so that its contents can be tracked.
Transportation types: Cargo can travel via many different modalities:
Seaport terminals handle a wide range of maritime cargo.
A port is a maritime commercial facility which may comprise one or more wharves where ships may dock to load and discharge passengers and cargo. Although usually situated on a sea coast or estuary, some ports, such as Hamburg, Manchester and Duluth, are many miles inland, with access from the sea via river or canal.
Air cargo, commonly known as air freight, is collected by firms from shippers and delivered to customers. Aircraft were first used for carrying mail as cargo in 1911. Eventually manufacturers started designing aircraft for other types of freight as well.
Airmail is a mail transport service branded and sold on the basis of at least one leg of its journey being by air. Airmail items typically arrive more quickly than surface mail, and usually cost more to send. Airmail may be the only option for sending mail to some destinations, such as overseas, if the mail cannot wait the time it would take to arrive by ship, sometimes weeks. The Universal Postal Union adopted comprehensive rules for airmail at its 1929 Postal Union Congress in London. Since the official language of the Universal Postal Union is French, airmail items worldwide are often marked Par avion, literally: "by airplane".
There are many commercial aircraft suitable for carrying cargo such as the Boeing 747 and the bigger An‑124, which was purposely built for easy conversion into a cargo aircraft. Such large aircraft employ quick-loading containers known as unit load devices (ULDs), much like containerized cargo ships. The ULDs are located in the front section of the aircraft.
The Boeing 747 is an American wide-body commercial jet airliner and cargo aircraft. The first wide-body airplane produced, it was the first plane dubbed a "Jumbo Jet". Its distinctive hump upper deck along the forward part of the aircraft has made it one of the most recognizable aircraft. Manufactured by Boeing's Commercial Airplane unit in the United States, the 747 was originally planned to have 150 percent greater capacity than the Boeing 707, a common large commercial aircraft of the 1960s. First flown commercially in 1970, the 747 held the passenger capacity record for 37 years.
A cargo aircraft is a fixed-wing aircraft that is designed or converted for the carriage of cargo rather than passengers. Such aircraft usually do not incorporate passenger amenities and generally feature one or more large doors for loading cargo. Freighters may be operated by civil passenger or cargo airlines, by private individuals or by the armed forces of individual countries.
Most nations own and utilize large numbers of military cargo aircraft such as the C‑17 Globemaster III for logistical needs.
Popular commercial aircraft transformed to a cargo aircraft such as Saab 340A is designed for high revenue and profitability in short / medium haul operations.
Trains are capable of transporting a large number of containers that come from shipping ports. Trains are also used for the transportation of water, cement, grain, steel, wood and coal. They are used because they can carry a large amount and generally have a direct route to the destination. Under the right circumstances, freight transport by rail is more economic and energy efficient than by road, especially when carried in bulk or over long distances.
The main disadvantage of rail freight is its lack of flexibility. For this reason, rail has lost much of the freight business to road transport. Rail freight is often subject to transshipment costs, since it must be transferred from one mode of transportation to another. Practices such as containerization aim at minimizing these costs. When transporting point-to-point bulk loads such as cement or grain, with specialised bulk handling facilities at the rail sidings, rail mode of transport remains the most convenient and preferred option.
Many governments are currently trying to encourage shippers to use trains more often because of the environmental benefits.
Many firms, like Parcelforce, FedEx and R+L Carriers transport all types of cargo by road. Delivering everything from letters to houses to cargo containers, these firms offer fast, sometimes same-day, delivery.
A good example of road cargo is food, as supermarkets require deliveries daily to replenish their shelves with goods. Retailers and manufacturers of all kinds rely upon delivery trucks, be they full size semi trucks or smaller delivery vans. These smaller road haulage companies constantly strive for the best routes and prices to ship out their products.Indeed, the level of commercial freight transported by smaller businesses is often a good barometer of healthy economic development as it is these types of vehicles that move and transport literally anything, including couriers transporting parcel and mail. You can see the different types and weights of vehicles that are used to move cargo around.
Less than truckload (LTL) cargo is the first category of freight shipment, which represents the majority of freight shipments and the majority of business-to-business (B2B) shipments. LTL shipments are also often referred to as motor freight and the carriers involved are referred to as motor carriers.
LTL shipments range from 50 to 7,000 kg (110 to 15,430 lb), being less than 2.5 to 8.5 m (8 ft 2.4 in to 27 ft 10.6 in) the majority of times. The average single piece of LTL freight is 600 kg (1,323 lb) and the size of a standard pallet. Long freight and/or large freight are subject to extreme length and cubic capacity surcharges.
Trailers used in LTL can range from 28 to 53 ft (8.53 to 16.15 m). The standard for city deliveries is usually 48 ft (14.63 m). In tight and residential environments the 28 ft (8.53 m) trailer is used the most.
The shipments are usually palletized, stretch [shrink]-wrapped and packaged for a mixed-freight environment. Unlike express or parcel, LTL shippers must provide their own packaging, as carriers do not provide any packaging supplies or assistance. However, circumstances may require crating or other substantial packaging.
Air freight shipments are very similar to LTL shipments in terms of size and packaging requirements. However, air freight or air cargo shipments typically need to move at much faster speeds than 800 km or 497 mi per hour. Air shipments may be booked directly with the carriers, through brokers or with online marketplace services. While shipments move faster than standard LTL, air shipments don’t always actually move by air. In the US, there are certain restrictions on shipments moving via air freight on passenger aircraft. Shippers in the US must be approved and be "known" in the Known Shipper Management System before their shipments can be tendered on passenger aircraft.
In the United States, shipments larger than about 7,000 kg (15,432 lb) are typically classified as truckload (TL) freight. This is because it is more efficient and economical for a large shipment to have exclusive use of one larger trailer rather than share space on a smaller LTL trailer.
By the Federal Bridge Gross Weight Formula the total weight of a loaded truck (tractor and trailer, 5-axle rig) cannot exceed 80000 lbs in the United States. In ordinary circumstances, long-haul equipment will weigh about 15,000 kg (33,069 lb), leaving about 20,000 kg (44,092 lb) of freight capacity. Similarly a load is limited to the space available in the trailer, normally 48 ft (14.63 m) or 53 ft (16.15 m) long, 2.6 m (102.4 in) wide, 2.7 m (8 ft 10.3 in) high and 13 ft 6 in or 4.11 m high over all.
While express, parcel and LTL shipments are always intermingled with other shipments on a single piece of equipment and are typically reloaded across multiple pieces of equipment during their transport, TL shipments usually travel as the only shipment on a trailer. In fact, TL shipments usually deliver on exactly the same trailer as they are picked up on.
Shipments are typically categorized as household goods, express, parcel, and freight shipments:
Often, an LTL shipper may realize savings by utilizing a freight broker, online marketplace or other intermediary, instead of contracting directly with a trucking company. Brokers can shop the marketplace and obtain lower rates than most smaller shippers can obtain directly. In the LTL marketplace, intermediaries typically receive 50% to 80% discounts from published rates, where a small shipper may only be offered a 5% to 30% discount by the carrier. Intermediaries are licensed by the DOT and have requirements to provide proof of insurance.
Truckload (TL) carriers usually charge a rate per kilometre or mile. The rate varies depending on the distance, geographic location of the delivery, items being shipped, equipment type required, and service times required. TL shipments usually receive a variety of surcharges very similar to those described for LTL shipments above. In the TL market, there are thousands more small carriers than in the LTL market. Therefore, the use of transportation intermediaries or brokers is extremely common.
Another cost-saving method is facilitating pickups or deliveries at the carrier’s terminals. By doing this, shippers avoid any accessorial fees that might normally be charged for liftgate, residential pickup/delivery, inside pickup/delivery, or notifications/appointments. Carriers or intermediaries can provide shippers with the address and phone number for the closest shipping terminal to the origin and/or destination.
Shipping experts optimize their service and costs by sampling rates from several carriers, brokers and online marketplaces. When obtaining rates from different providers, shippers may find a wide range in the pricing offered. If a shipper in the United States uses a broker, freight forwarder or other transportation intermediary, it is common for the shipper to receive a copy of the carrier's Federal Operating Authority.Freight brokers and intermediaries are also required by Federal Law to be licensed by the Federal Highway Administration. Experienced shippers avoid unlicensed brokers and forwarders because if brokers are working outside the law by not having a Federal Operating License, the shipper has no protection in the event of a problem. Also, shippers normally ask for a copy of the broker's insurance certificate and any specific insurance that applies to the shipment.
Overall, shipping costs have fallen over the past decades. A further drop in shipping costs in the future might be realized through the application of improved 3D printing technologies.
Governments are very concerned with the shipment of cargo, as it may bring security risks to a country. Therefore, many governments have enacted rules and regulations, administered by a customs agency, to the handling of cargo to minimize risks of terrorism and other crime. Governments are particularly concerned with cargo entering through a country's borders.
The United States has been one of the leaders in securing cargo. They see cargo as a concern to national security. After the terrorist attacks of September 11th, the security of this magnitude of cargo has become highlighted on the over 6 million cargo containers enter the United States ports each year.The latest US Government response to this threat is the CSI: Container Security Initiative. CSI is a program intended to help increase security for containerised cargo shipped to the United States from around the world. Europe is also focusing on this issue, with a number of EU-funded projects underway.
There are many different ways and materials available to stabilize and secure cargo in various modes of transport. Conventional load securing methods and materials such as steel strapping and plastic/wood blocking & bracing have been used for decades and are still widely used. Present load securing methods offer several other options including polyester strapping and lashing, synthetic webbings and dunnage bags, also known as air bags or inflatable bags.
Practical advise on stabilization is given in the International Guidelines on Safe Load Securing for Road Transport.
Freight transport is the physical process of transporting commodities and merchandise goods and cargo. 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 as well. "Logistics", a term borrowed from the military environment, is also used in the same sense.
Containerization is a system of intermodal freight transport using intermodal containers. 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 completely 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 is a large standardized shipping container, designed and built for intermodal freight transport, meaning these containers can be used across different modes of transport – from ship to rail to truck – 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, such as simply container, cargo or freight container, ISO container, shipping, sea or ocean container, sea van or (Conex) box, sea can or c can.
United Parcel Service (UPS) is an American multinational package delivery and supply chain management company.
Package delivery or parcel delivery is the delivery of shipping containers, parcels, or high value mail as single shipments. The service is provided by most postal systems, express mail, private courier companies, and less than truckload shipping carriers.
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. 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.
FOB, "Free On Board", is a term in international commercial law specifying at what point respective obligations, costs, and risk involved in the delivery of goods shift from the seller to the buyer under the Incoterms standard published by the International Chamber of Commerce. FOB is only used in non-containerized sea freight or inland waterway transport. As with all Incoterms, FOB does not define the point at which ownership of the goods is transferred.
Rail freight transport is the use of railroads and trains to transport cargo as opposed to human passengers.
Freighting refers to the hauling of cargo, historically, using a dog team to mush goods cross-country. During the North American gold rushes, such as the Klondike Gold Rush, dogs were valuable draft animals, going where horses could not and withstanding harsher weather.
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.
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 relatively small freight. The alternatives to LTL carriers are parcel carriers or full truckload carriers. Parcel carriers usually handle small packages and freight that can be broken down into units less than 150 pounds (68 kg). Full truckload carriers move freight that is loaded into a semi-trailer. Semi-trailers are typically between 26 and 53 feet and require a substantial amount of freight to make such transportation economical.
A freight forwarder, forwarder, or forwarding agent, also known as a non-vessel operating common carrier (NVOCC), is a person or company that organizes shipments for individuals or corporations to get goods from the manufacturer or producer to a market, customer or final point of distribution. Forwarders contract with a carrier or often multiple carriers to move the goods. A forwarder does not move the goods but acts as an expert in the logistics network. These carriers can use a variety of shipping modes, including ships, airplanes, trucks, and railroads, and often do utilize multiple modes for a single shipment. For example, the freight forwarder may arrange to have cargo moved from a plant to an airport by truck, flown to the destination city, then moved from the airport to a customer's building by another truck.
Freight companies are companies that specialize in the moving of freight, or cargo, from one place to another. These companies are divided into several variant sections. For example, international freight forwarders ship goods internationally from country to country, and domestic freight forwarders, ship goods within a single country.
Dimensional weight, also known as volumetric weight, is a pricing technique for commercial freight transport, which uses an estimated weight that is calculated from the length, width and height of a package.
A specialized set of jargon describe the tools, equipment, and employment sectors used in the trucking industry in the United States. Some terms may be used within other English-speaking countries, or within the freight industry in general. For example, shore power is a term borrowed from shipping terminology, in which electrical power is transferred from shore to ship, instead of the ship relying upon idling its engines. Drawing power from land lines is more efficient than engine idling and eliminates localized air pollution. Another borrowed term is "landing gear", which refers to the legs which support the front end of a semi-trailer when it is not connected to a semi-truck. Some nicknames are obvious wordplay, such as "portable parking lot", in reference to a truck that carries automobiles.
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 freight broker, in freight transport (cargo), over land in the United States by truck is often used as part of the logistics. This may be part of an overall shipbroking using a cargo broker, a freight forwarder, third party logistics broker (3PL), and even a fourth-party broker, when outsourcing is needed for freight transportation. The brokering can be single mode or by multimodal transportation and can use specialized brokers on a permanent basis or as needed to ensure timely traffic management.