International Freight Mode Selection

The process for selecting a suitable mode of transport, is split into four key stages, covering operational factors, transport mode characteristics, consignment factors, and cost and service requirements.

Operational factors

They can be external or internal in nature.

External factors includes

• The basic infrastructure in the country
• Trade barriers
• Law and taxation
• Financial institutions and services, and economic conditions
• Communications systems – Impact is due to the supporting processes and paperwork of freight movements
• Culture – Differing cultural aspects may influence how trade and commerce are undertaken.
• Climate – Extremes of weather, temperature and humidity can have a major impact on some products.

Customer characteristics

Most of these characteristics can also be considered for both national and international freight transport.

• Service level requirements – Delivery time constraints can mean that certain relatively unreliable modes cannot be considered.
• Delivery point constraints – It refers particularly to the physical aspects of delivery, including the location of the delivery point, any access constraints concerning the same.
• Terms of sale preference – There are a number of different terms of sale that can be used, ranging from ex works (at the supplier factory) to delivered duty paid (at the customer’s delivery point).
• Order size preference – The physical size of an order clearly has an impact
• Customer importance – Most suppliers have ‘A’ rated customers who are deemed to be their most important and who really must be given a delivery service that does not fail.
• Product knowledge – Some products or orders may necessitate some knowledge transfer to the customer at the time of delivery.

Physical nature of the product

It includes

• Volume to weight ratio
• Value to weight ratio
• Special characteristics (hazard, fragility, perishability, time constraints, security)

Other logistics components

These are the elements concerned with the classic logistics trade-offs and are

• Supply points – The location of raw material or component suppliers will clearly impact on route and modal choice.
• Production plants – The location of manufacturing and production plants
• Warehouses and storage facilities – Location of finished goods warehouses
• Depots – Inventory and stock-holding policy will usually determine where depots are located.
• Marketing plans and policies – These may affect transport choice because some plans and policies call for a very fast response time to customer orders.
• Existing delivery system – There may be elements of the existing delivery operation that need to be retained.