A Guide To e-Commerce Transit Options & Tips For Success
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When you travel on vacation, it’s natural that you look for the best mode of transport to save time and money. In e-commerce transit, the same mentality applies.
E-tailers have always wanted to streamline the ways their goods are transported from one place to another, but many of them stop at the thought of having to compare the numerous transit methods available.
To simplify things for you, this article examines the pros and cons of four common e-commerce transit options. We’ll also look into some e-commerce transit trends and challenges to help you stay on top of the game in the e-commerce space. Let’s get started!
E-commerce transit options
- Road transportation
- Rail transportation
- Marine transportation
- Air transportation
- E-commerce transit trends & challenges
E-commerce transit options
When it comes to transport of goods, there are four major options: trucks, trains, ships and planes. They fall into the categories of road, rail, maritime and air transportation respectively.
In this section, we’ll examine the pros and cons of each of these e-commerce transit options, so you can decide which is best for your online business.
1. Road transportation
Road transportation refers to the transit of goods on roads, usually in trucks. This type of transportation is traceable, low-cost and rather flexible, but has limited capacity and is prone to accidents and delays.
Following, the pros and cons of trucking will be examined in detail.
Advantages of road transportation
- High traceability: Thanks to built-in GPS and fleet management software, you can track and locate your goods in transit on a real-time basis.
- Relatively low cost: Given that ships have high maintenance costs and jet fuels could be prohibitively expensive, trucks are a relatively economical choice for e-commerce transit. They don’t require specialized infrastructure, such as a port, station or airport either.
- Fewer restrictions: When you transport goods with trucks, there are less limitations on what you can put in those vehicles. This consideration is key for sellers of perishable goods (not recommended in shipping containers) or “dangerous goods” (e.g. lithium batteries), which are subject to regulations when transported in commercial aircraft.
- Wide range of options: There are trucks of many different types and sizes to choose from. For instance, you may use box freight trucks to move large and heavy items (e.g. furniture), refrigerated trucks to transport perishables, or flatbed trucks for easy loading and unloading.
- Possibility of door-to-door delivery: Online shoppers today expect not only delivery to their neighborhood, they demand delivery to their doorsteps — and trucks can do that. Although trucking isn’t always the most cost-effective solution for last-mile delivery, consider it an option you may use when selling to local customers.
Disadvantages of road transportation
- Limited load capacity: The average freight truck can carry cargo of 10-25 tons, but that load capacity pales in comparison with what ships, trains or planes can hold. For transporting bulky items in large quantities, trucking may not be your best option.
- Susceptible to delays: Bad weather and traffic congestion are the nemesis of road transportation. They cause delays — often unavoidable ones — to the delivery of your goods.
- Prone to accidents: Road accidents happen more often than most drivers would like to admit. In the United States alone, around 500,000 trucking accidents occur every year.
Summary: Pros and cons of road transportation
2. Rail transportation
Trains are known for their reliability, eco-friendliness and high load capacity. However, they aren’t always accessible (e.g. in remote areas) and have rigid routes and schedules.
Below is a list of benefits and drawbacks of trains as an e-commerce transit method.
Advantages of rail transportation
- Dependable: When it comes to e-commerce transit, trains are the epitome of logistical reliability. Traffic jams aren't an issue on the rails, and trains are much less vulnerable to the elements (e.g. fog and snow) which often hold up flights and cause delays.
- High load capacity: A freight train can easily haul a few hundred tons of cargo without stretching the limit of its load carrying capacity. What’s best is that extra railcars can be added to expand the capacity of a train.
- Minimal environmental impact: Rail trains are 3X to 4X more fuel-efficient than trucks, hence emitting 75% less greenhouse gases on average. For businesses (as well as customers) that care for our Mother Earth, rail transport is the option to use.
Disadvantages of rail transportation
- Limited accessibility: Not all destinations have access to railroads, especially in rural areas. Multiple transfers are often required, and you may have to resort to road transport to deliver goods to their final destinations.
- Lack of flexibility: Train routes and schedules cannot be changed to suit individuals’ needs, so rail transport isn’t really for time-sensitive shipments.
- Not suitable for small loads and short distances: Shipments in small quantities result in under-utilized capacity, and the costs of handling and booking a freight train don’t usually justify the benefits across short distances. In these cases, road transport would be a more economical choice.
3. Marine transportation
Ships are best for their unmatched capacity, safety and affordability. Yet, there’s one fatal drawback with this e-commerce transit method that may agitate your customers.
Read on to learn about the pros and cons of ocean freight.
Advantages of marine transportation
- Ultra-large capacity: Among the four major modes of freight transport (trucks, trains, ships and planes), ships are hands-down the winner in terms of size and volume. They can accommodate a few thousand tons of goods, even oversized ones.
- An economical choice: Planes and ships are popular options for long-distance freight transport, but the latter has significantly lower fuel costs. Marine transportation is an economical choice if time isn’t a concern to you (see disadvantages below).
- Shipment safety: Ships are slow-moving vessels, which means your goods are usually safe from major collisions during transit. Knowing that your cargo is subject to minimal crashes, you may save on e-commerce packaging costs, too.
Disadvantages of marine transportation
- Very slow: The major drawback of ocean transport lies in its speed. Deliveries that take 1-2 days to complete with an aircraft might take weeks or months via the sea route.
Summary: Pros and cons of marine transportation
4. Air transportation
Air transport promises speed and reliability, but there is (literally) a price to pay. Here are the pros and cons should you wish to find out more.
Advantages of air transportation
- Speedy deliveries: Air freight is quick and reliable. Planes can move your goods across the globe in days (sometimes overnight), making them the go-to option for express international shipping.
Disadvantages of air transportation
- Very expensive: Air freight costs 4X to 5X more than road transport, and is priced 12X to 16X higher than ocean freight. The numbers clearly speak for themselves — there’s a price to pay for the speed.
- Many restrictions: With air transport, there are size, weight and product limitations. For example, everyday items such as aerosol whipped cream, lithium batteries and dry ice are considered “hazardous goods” on planes and are subject to rigorous regulations.
E-commerce transit trends & challenges
Road, rail, ocean and air freight are four transit options that have been around for decades. Understanding their advantages and disadvantages will, no doubt, help you make the call on how your goods should be moved around.
Yet, as we sail into the uncharted waters of e-commerce in a dynamic world, new challenges lay ahead and e-tailers must be well aware of them. Here’s what you need to know.
1. Multi-modal transportation is key to logistical agility
If the years-long Covid-19 outbreak has taught us anything, it’s to expect the unexpected.
Fuel price volatility, equipment shortages and labor scarcity are but some challenges faced by the transport and logistics (T&L) industry — which serves millions of e-commerce businesses worldwide — and there are certainly more to come.
In these difficult times, winning e-tailers are able to quickly adapt to changes in the macro environment. This is how they survive and thrive against the headwinds.
For instance, diversification of the carrier mix proves to be an effective solution for e-commerce sellers to minimize the impact of logistical disruptions.
While the long-haul trucking sector was plagued by consistently high driver turnover rates, and activities on the sea were constrained by the shortage of shipping containers due to border closures, railroads became the go-to option for e-commerce transit amid the pandemic.
And that’s why the railway industry saw increased activity when its road and ocean counterparts suffered blows in unprecedented ways.
Going forward, multi-modal transportation is here to stay.
At the best of the times, a strong mix of transit methods helps e-commerce sellers maintain robust and efficient supply chains (e.g. sea freight for import and road transport for last-mile delivery); and in times of crisis, they will guard you against disruptions in certain industries.
2. Cross-border transits are inevitable in a borderless world
Importing goods from overseas is nothing new, but cross-border e-commerce – which entails shipping to global customers – is the next big thing to watch for.
In fact, 76% of online shoppers today have made purchases on site outside of their home regions, with the top reasons being better prices, access to products unavailable locally and discovery of new items.
On the issue of cross-border online shopping, one report revealed an interesting trend: consumers from regions with high living costs (e.g. France and Singapore) tend to buy from China and other regions in Southeast Asia, where production costs (hence product prices) are comparatively lower.
Whether you like it or not, the era of borderless commerce is here.
To successfully ride this wave of opportunity, e-tailers must be prepared to tackle the wealth of challenges of cross-border e-commerce logistics — costs, speed, compliance and many others — or you’re bound to lose the war.
3. Technology has a major role to play in transport and logistics
Applied in the right way, technology can tackle many recurrent problems faced by e-commerce businesses.
For example, artificial intelligence now assists with routing vehicles and optimizing drop-off routes, Elon Musk from Tesla is pushing for self-driving cars, and Amazon has plans to use drones for package delivery.
These are technologies in action that have profound implications on how e-commerce transit works in the future.
By automating tasks that were laborious to complete, businesses will be able to reduce their dependence on human workers significantly. The result? Increased efficiency, lower costs and higher speed it is.
Some last words
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