When it comes to logistics there is not a single correct answer on how supply chains should be constructed and executed. There are a variety of variables that come into play, therefore, the best results will be derived from supply chains with custom solutions. When a company is just starting out and setting up their supply chain, a common question is how am I going to get my product from a manufacturer in Asia to a retailer in the US? Do I need air freight services or ocean freight services?
As with most things in life, both ocean and air freight services have pros and cons. So, which is best suited for you? Here is a basic checklist to help you find which transportation method is better suited for your supply chain:
Time of Product Arrival: As they say time is money, but just how much is your time worth? If you need your product delivered overseas in less than a week, then air freight is your mode of transportation. Air freight also allows the capability to deliver within 24 hours – for a premium charge - of course. If you have planned accordingly and allowed 2-6 weeks for delivery, ocean freight is your mode of transportation. For example, goods shipped from China, on average, take around 14 days to reach the West Coast or 30 days to reach the East Coast according to an Economics and Statistics Administration analysis
Cost: Regardless of the method of international shipping you choose there are a variety of costs that go into play, including container fees, packaging, terminal handling, and broker fees. However, according to the World Bank, the cost of airfreight estimates 12-16 times more expensive than ocean freight. The greatest factor as mentioned above is speed. The more time you have available the more money you can save.
Product Safety/Reliability: Laws and regulations are in place to mitigate risk for both methods of transportation. Air freight services have proven to be more reliable with less damages. Since there is less time your product is in route the premium cost also accounts for more safety. Ocean freight services have a greater probability of damaged goods. As the voyage is longer it I s subject to greater risk.
Tracking: Whether you choose to use ocean or air freight services for your product, both allow tracking capabilities. At any time, you can trace your products location and find out if it is on schedule to arrive early, on time or late. Track and trace is a must in today’s digital world.
Transporting freight by either ocean or air has its pros and cons. It may ultimately cost more to ship freight by ocean and have it arrive late, than to have originally shopped by air and arrive on time. To develop a successful supply chain, look for a solution that is custom to your company’s needs. RAK Logistics specializes in developing custom logistics solutions that will get your product from A-Z.
Contact us today to learn how RAK Logistics can provide a global solution for your supply chain.
Check out our recent white paper to learn more about importing to the United States from Overseas.
