Shipping services are the transportation of goods or cargo via air, sea, rail, or ground. The goods might be on pallets, in boxes, crates or in other containers as they move from one location to another.
Each form of transportation has its benefits, such as price, safety, or speed. Knowing which mode is best for each load will help you manage your shipping business effectively.
How Do Shipping Services Work?
Shipping services involve third-party contracts that shippers sign to ensure their business functions optimally. This involves agreeing to when and where to pick up and deliver the freight, how large the freight will be, how often the freight company will complete the shipping service, and more.
Some shipping services are one-time, such as in the case of spot freight where one delivery is agreed upon for timing and price. Other shipments occur daily, weekly, or monthly to transport goods from rail yards or ports to a warehouse to await customer orders and fulfillment.
Transit times and guarantees are large factors in how companies that ship goods decide to contract for those services. The cargo location is another deciding factor in whether the goods will travel via air, sea, rail, or ground.
Shipping Services Explain
A shipping company no longer simply moves the freight from one location to another, even though that is a key service. However, these companies are also important players in the supply chain with a variety of services, including fulfillment, warehousing, and inventory.
Understanding the various services that a delivery agent might discuss with you will prepare you for negotiating shipping services.
A shipment company can transport goods in four different ways, those being air, land, sea, and rail. Alternatively, the freight company might offer intermodal shipments, which is when multiple types of transportation are used to get the goods from one point to another.
Freight companies might specialize in one type of shipping or they might offer full-service shipping to give companies the options they need to succeed. We’ll explain the four types of shipping modes alongside the benefits of each.
Warehouse Management System
A warehouse management system makes overseeing goods simpler and fulfillment faster once a customer places an order. These systems offer the following key functions:
- Inventory tracking
- Slotting locations
- FIFO controls
- Product location for picking
- Information that aids in loading the products for delivery
These systems rely on electronic logging devices and scanners to log everything going in and coming out of the warehouse. Then, once you scan a product, you can scan the bay or the slot that it is located in for fast identification and picking purposes later.
Clear digital inventory helps with preventing damage or loss of the goods while in the warehouse and can inform warehouse employees when it is time to rotate the items to protect freshness.
Warehouse management systems offer real-time data that connects everything that is happening on the floor to the supplier. The supplier can see when it’s time to deliver additional goods and contract shipment services to keep the warehouse stocked.
While warehousing has set policies and procedures, the shipping services company can adjust the services to meet the needs of each shipper. A large benefit of this service is that it provides detailed inventory reports to help you anticipate needs, avoid backorders and handle returns with ease.
Inbound processes handle inventory via quick, accurate details. Without proper inbound processes, shippers will see errors in inventory and warehousing will not be able to justify why a product is in a certain location.
Reducing receiving errors makes for an efficient and effective warehousing business, which shipping service companies are experts at. When done right, inventory will match inbound receipts and important details about manufacturing and expiration dates, serial and lot numbers, purchase order data, and more will be logged for a full view of the product for ease of management.
Warehouse fulfillment is when a third-party logistics, or 3PL, company houses products or raw materials required to create the products at its location. That way, manufacturers require smaller facilities and can specialize in making products instead of managing inventory.
A large benefit of using a third party for fulfillment purposes is that you won’t have to hire or train warehouse professionals. That would require unique specialties and a deep understanding of the supply chain, so third parties are beneficial for that reason among others.
You’ll have a team of experts who pick and replenish the goods using specialized equipment and tools that they maintain and oversee. That way, the goods get loaded directly onto freight carriers to transport them to their next or final destination seamlessly.
4 Types of Shipping Modes
Each shipping mode offers unique benefits to both manufacturers and customers. Learn more about the various modes and what to expect along the way.
Shipping Through Air
Air shipping uses aircraft to move goods, which makes it the fastest mode of transportation. That speed makes it a useful way to ship goods and tends to experience less interruption from weather and traffic than other modes.
Due to removing the chances for land obstructions, air freight is reliable, though expensive. You’ll find it useful for transporting any type of goods that is not overly heavy or that might be too large to fit inside of a standard freight aircraft.
The timeline for air freight delivery is generally one to two days. If you’re transporting perishable goods, shipping via air is often the best choice as it’s an express shipping option that ensures the goods will reach their destination without spoiling.
Benefit of Shipping Through Air
- Speedy delivery option
- Reliable due to reduced interruptions
- Best shipping option for perishable goods
- Shipping option for nearly anything
- Ideal for express shipping
Shipping Through Land
Shipping via land is one of the oldest forms of transporting goods. It’s useful no matter if you’re transporting goods locally, nationally, or internationally to neighboring countries.
Generally, land shipments are conducted via truck, though rail shipping is another form of land shipping we’ll discuss below. Trucks are ideal when you’re moving large goods, like construction materials or vehicles.
Transporting goods via trucks is generally cheaper than the other options, but the main downside is that it’s a slower process. Road transportation often involves goods that need to be transported short distances. For that reason, some shippers offer hyperlocal or intra city deliveries via bike, motorbike, or car.
Land shipment is best for heavy or bulky goods that can’t go via air freight. For instance, an example of heavy goods would be appliances.
Benefits of Shipping Through Land
- Inexpensive shipment option
- Reaches exact location or final destination
- Works well for heavy or bulky goods
Shipping Through Sea
Sea shipping offers benefits for both military and commercial use cases. Because of the size of freight ships, you can transport larger quantities of goods than you can via air. Generally, goods travel in shipping containers when going by sea.
This is one of the slowest transportation modes, but it’s also inexpensive and effective, especially when you’re in need of international transportation.
Benefits of Shipping Through Sea
- Ideal for large quantities
- Works for a variety of types of goods
- A very safe option
Shipping Through Rail
Rail shipping is moving goods via train. And while this can be a cost-effective transportation mode, you have to consider the total expense since most businesses will need to move the goods by truck from the rail yard once it arrives.
Some businesses strategically place themselves near a railway station or along a rail line for fast, effective delivery. But many companies will rely on intermodal shipping services where the freight moves from rail to truck or vice versa.
Rail shipping is effective for larger goods. Some countries have stronger rail systems than others, meaning you might find it works well in some areas and not so great in others.
Benefit of Shipping Through Rail
- Good for bulky items
- Ideal for businesses located near rail stations
Things To Consider When Choosing a Shipping Method
Most companies require a mix of shipping services in order for goods to travel from the manufacturing location to the warehouse and from the warehouse to the customers. By choosing your transportation modes based on the location, size, and speed requirements of your goods, you can better manage your shipping and logistics budget.
Here’s what you need to consider when evaluating shipping methods!
Budgets are often the most important factor in deciding which shipping method to use. However, the price of freight shipping will vary based on the size, weight, and volume of goods being transported.
The heavier or farther goods must travel, the more expensive the transportation will be. In order to successfully manage your costs, you might want to consider rail shipping.
If you have no time constraints, sea shipment will be the best option for getting goods to their final destination. But if the goods are perishable, paying more for air freight will ensure you don’t suffer financial losses due to spoilage.
When evaluating your shipping expenses, don’t forget the hidden costs of things like insurance, and the risks of loss, or damage. These costs will impact the final price of the shipment.
Type of Freight
Although you’ll be working hard to manage your budget, the type of goods might dictate which mode of transportation you must use regardless of price.
For example, smaller goods offer options for any transportation, while larger goods move best via truck or sea. Lighter goods can travel via any transportation mode, whereas heavier goods are best suited for rail or sea freight.
Higher value or more fragile goods are better suited for land and air transportation. Again, suffering a loss or damage to the goods will impact the total cost of transportation, meaning it’s sometimes best to pay more for the transportation.
Speed is often another crucial factor for many companies when determining transportation modes. The speed at which you decide to ship the goods will impact your customer relationships and the experience they have with you, so choose wisely.
For goods that must arrive quickly, consider air freight. That said, if you have plenty of time on your hands, feel free to manage your budget with sea freight.
Balancing your budget with the need to delight customers will help you grow your business and build a good reputation in your industry. You don’t want to be known for shipping delays or high prices.
The freight service you select will directly impact how safe your goods are while in transit. Sea freight carries the greatest risk since there are many perils while in the sea and the longer shipping timelines leave your goods susceptible to damage.
Transporting via roads is safer than the rails since most companies experience fewer losses with this transportation mode. However, if you want the safest transportation available, opt for transport via air.
Optimizing Shipping With the Right Transportation Mode
Evaluating shipping services requires that you know about each transportation mode in depth and understand their benefits as well as their limitations. Budgeting is only one of many factors to consider when contracting with a shipping company. For best results, you’ll need to do a full analysis before deciding how to transport your goods and raw materials.
Shipping types include truck, rail, air and sea freight. You might see these referred to as standard, ground or express shipping.
Basic shipping is often the least expensive and slowest option. It is also called economy or ground.
Shipping services include warehousing, fulfillment, inventory management, inbound freight, outbound and customer delivery. Many shipping service companies also offer services for returns and customer service.