Freight

The term 'freight' refers to the transportation of goods in bulk from one location to another. It could involve a multitude of items from raw materials for production to finished products ready for consumption. The type of goods being transported as freight can vary vastly, including commodities like grains, metals, or crude oil, manufactured goods like electronics, furniture, or clothing, or even vehicles.  The freight transportation industry is a crucial component of the global economy. It enables trade between countries and regions, allowing each to produce what it's best at and import what it needs from others. Without efficient freight transport, the modern global economy as we know it wouldn't exist.

Key takeaways

  • Definition: Freight is the bulk transportation of goods, essential for global trade.
  • How it works: The freight process involves stages like pick-up, transport, and delivery, necessitating careful planning.
  • Types: Different freight types include truckload, less than truckload, intermodal, parcel, air, and sea, each suitable for different needs.
  • Pros and cons: Freight transport offers scalability and versatility but poses potential risks like damage, environmental impact, delays, and logistical complexity.
  • Explore your options: Partnering with freight leaders like uShip can enhance efficiency, offer competitive rates, and streamline operations.

How it works

The nature of the goods being transported as freight can range vastly. This can include raw materials like coal or grain, intermediate goods like car parts or steel, and finished products like electronics or furniture. The goods can be anything from perishable items such as food, to non-perishable commodities like clothing or machinery.

Freight transportation plays a crucial role in both domestic and international trade. It enables businesses to get their products to market, whether that market is a retail store in the same country or a customer on the other side of the world. It's an essential part of the supply chain, linking producers and consumers and enabling the efficient flow of goods.

Freight transportation is usually a commercial activity carried out by freight carriers, which are companies specialized in moving goods. These carriers operate fleets of vehicles, such as trucks or ships, and they charge a fee based on factors like the weight and dimensions of the cargo, the distance to be traveled, and the type of goods.

It's worth noting that the term 'freight' can also be used to refer to the charges or rates applied for the transportation of goods. So, when we talk about 'freight costs' or 'freight charges,' we're referring to the cost of transporting goods.

In terms of the logistics, freight typically involves a number of stages, including:

  • Pick-up: The goods are collected from the shipper, which could be a factory, warehouse, or port.
  • Consolidation: If the goods don't fill a whole truck, shipping container, or other transport unit, they might be combined with other goods for the journey.
  • Transport: The goods are transported to their destination. This might involve a single journey, like a truck driving from a factory to a store, or multiple stages, like a shipping container being loaded onto a truck, driven to a port, loaded onto a ship, then unloaded at the other end and put onto another truck or train.
  • Deconsolidation: If the goods were consolidated with others for the journey, they'll be separated out at the other end.
  • Delivery: The goods are delivered to the consignee, which could be a retail store, a warehouse, or a customer's home.

Each of these stages involves careful planning and coordination to ensure that goods are transported efficiently and arrive in good condition. It's a complex process, but it's essential to our global economy.

Freight types

Truckload (TL) or full-truckload (FTL): This type of freight is used when the volume of freight is enough to fill an entire truck or close to it. The shipment generally goes directly from the shipper to the consignee without being transferred to other trucks, which reduces the risk of damage. The truck is dedicated to a single load, making it faster than other options for large shipments. However, if the load doesn't fully utilize the truck's capacity, there can be inefficiencies as you're still paying for the whole truck.

Less-than-truckload (LTL): In the case of LTL freight, multiple shipments from different shippers are combined to fill a truck. This is a cost-effective solution for smaller shipments as you only pay for the portion of the truck that your freight occupies. The drawback is that your freight will likely be handled more frequently as it's loaded and unloaded along with other shipments, increasing the risk of damage. It can also take longer as the truck makes multiple stops to pick up and deliver shipments.

Intermodal: Intermodal freight involves the use of multiple modes of transportation — trucks, trains, ships, or airplanes — to complete a shipment. The goods are usually packed in shipping containers that can be transferred between different modes of transport without unloading the goods. This is a cost-effective and environmentally friendly way to ship freight over long distances as each mode of transport is used where it's most efficient. However, it can be slower than other methods and the multiple handoffs between modes can increase the risk of damage or delays.

Parcel: This is used for small, lightweight shipments. Parcel carriers like UPS, FedEx, and DHL offer door-to-door service and fast delivery times. The downside is the cost, as it's typically more expensive per unit weight than other modes. Also, there's usually a limit on the size and weight of parcels.

Air freight: This is the fastest way to transport goods over long distances. Air freight is perfect for high-value goods, perishable items, or other freight that needs to arrive quickly. The tradeoff is the cost, as air freight is typically the most expensive mode of transport.

Sea freight: Sea freight, or ocean freight, is used to transport goods in large quantities over long distances. It's the most cost-effective way to move large volumes of goods internationally, but it's also the slowest mode of transport. Goods transported by sea freight are usually packed in large shipping containers.

Pros and cons

Pros

  • Efficient for large shipments: Freight transport is particularly efficient when dealing with large volumes of goods. The cost per unit tends to decrease with the increase in the number of goods transported, making it an economical choice for businesses that deal with large shipments.
  • Variety of transportation modes: With freight, goods can be transported by a variety of means including road, rail, sea, or air. Each of these options has its own benefits and can be chosen based on the nature of the goods, the urgency of the delivery, and the distance to be covered.
  • Economies of scale: As the volume of goods transported increases, the cost per unit decreases. This is due to the fixed costs associated with transport, such as fuel and labor, being spread across a larger number of goods.
  • Supports global trade: Freight transport enables businesses to reach markets all over the world. By moving goods from places of surplus to places of demand, it helps businesses expand their customer base and access materials and products not available locally.

Cons 

  • Potential for damage or loss: Goods transported as freight are subject to the risk of damage, especially during loading and unloading or if the goods are not properly secured. There's also a risk of loss due to theft or misrouting, particularly for valuable goods.
  • Environmental impact: Freight transportation, particularly by road and air, can have a significant environmental impact. It contributes to air pollution, noise pollution, and, in the case of sea freight, potential water pollution. This is becoming an increasingly important consideration as businesses seek to reduce their carbon footprint.
  • Delays: Freight transportation can be subject to a variety of delays. These can be due to weather conditions, traffic congestion, breakdowns, logistical issues, or customs clearance for international shipments. Delays can disrupt supply chains and potentially lead to financial loss.
  • Costs: Freight can be expensive, particularly for smaller shipments. Costs include not just the direct cost of transportation but also packing costs, insurance, customs duties for international shipments, and potentially storage costs if goods need to be stored before or after transportation.
  • Complexity of logistics: Coordinating the movement of goods, particularly for intermodal freight or international shipments, can be complex and requires careful planning. It may require dealing with multiple transport providers, customs authorities, and regulatory bodies. Errors or misunderstandings can lead to delays, extra costs, or legal issues.

Explore your options

Now that you've deepened your understanding of freight and its integral role in the trucking industry, it might be time to consider your options for optimizing your freight operations. FreightWaves Ratings proudly partners with leading freight companies such as uShip, an established leader in the freight industry. 

uShip offers comprehensive shipping solutions tailored to the diverse needs of businesses within the trucking sector. By leveraging their vast network, innovative technology, and logistical expertise, you can fulfill all your shipping needs with efficiency and reliability. This partnership enables you to access competitive rates, broaden your reach, and streamline your freight operations, ultimately driving the growth and success of your trucking company.

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