Question

How do shipping costs decide the mode of transport when goods are shipped? Describe and compare the costs of at least four transport modes. What isn't the same mode of transport ideal for all shipments?

Answer 1

Shipping costs and decision on mode of transport.

Sea transport accounts for about 90% of the global trade due to its size and volume of cargo. The shipping cost are relatively lower for large volume of cargo as compared to air transport and thus shipping is less expensive and preferred for large volume of cargo

Explanation:

Describe and compare the costs of at least four transport modes

a) Sea transport

This is a mode of transport where goods are transported using ships on global waterways such as ocean, sea and other waterways. The shipping costs are low in sea transport as far as volume and size of cargo is concern. This makes this mode the least expensive and has an extensive coverage around the world.

b) Rail

This mode of transport is used on land to transport goods for relatively long distances. The costs associated is less compare to road transport and thus cost-effective and ideal for large volume of cargo. It is however limited to local destinations as compared to air and sea transport.

c) Air

This mode is mainly preferred in transportation of perishable goods and it is quicker. However its costs is high and thus very expensive for large cargo due to fuel costs and speed requirements. It is least preferred for large and bulky goods.

d) Road transport

As compared to rail transport, road transport is more expensive for long distances but cheap for short distances. Its costs are lower compared to air transport but is limited on coverage.

Variations in shipment modes

Different shipments requires different mode of transport due to the following factors:

i. Costs

ii. Reliability of modes

iii. Destinations coverage

iv. Urgency of goods

v. Volume and type of shipments