Comprehending Freight & its Meaning, Types, Factors & More
Freight is the transportation of goods crucial for businesses, whether it’s delivering finished products to customers or moving raw materials from suppliers to manufacturing units.
It ensures the timely delivery of goods to customers and efficient supply chain management, guaranteeing the seamless running of business affairs. Thus, understanding freight is crucial for companies in the category mentioned above.
Keep reading to delve deeper into its importance and impact.
Freight – What Exactly Is It?
Freight refers to transporting materials and goods from one point to another using various modes, such as trucks, aeroplanes, ships, etc. This system plays a crucial role in the supply chain management of businesses across multiple industries and drives international trade.
Freight is indispensable for businesses as it ensures the seamless flow of goods throughout the supply chain. It’s the backbone of commerce, facilitating the movement of goods between manufacturers, suppliers, distributors, and consumers.
For instance, freight ensures that raw materials are delivered promptly to manufacturing units, enabling production to proceed smoothly. It also ensures the timely delivery of finished products to distributors and retailers, guaranteeing efficient access for consumers.
Exploring the Types of Freight
Freight transport modes can be broadly classified into five categories:
1. Road Transport
Road transport involves transporting goods and materials on land via trucks and other vehicles. It is one of the most common freight transportation methods, allowing door-to-door delivery and reaching almost any destination. Porter is a leading provider in this field, offering reliable and efficient road freight solutions.
However, it can be affected by adverse weather and traffic congestion, which can increase transportation costs.
2. Rail Transport
Rail transport refers to the transportation of goods by land using trains. It is a cost-effective solution for transporting large quantities of goods over long distances. Additionally, it is usually faster than road transport as it is not affected by traffic congestion.
However, it offers less flexibility as it depends on a network of rail lines and terminals for operation.
3. Ship Transport
Ship/ocean transport entails using ships to transport goods and materials via sea. It is generally used for delivering goods in large quantities across countries and continents and is the most cost-effective method for long-distance shipments. But it is also the slowest.
4. Air Transport
Air transport involves the transportation of goods via aeroplanes. It is the most expensive freight transportation mode for urgent or time-sensitive shipments over long distances.
Flight cancellations due to adverse weather conditions can cause severe delays, leading to supply chain disruptions.
5. Multimodal Transport
Multimodal transport entails the usage of several transportation modes to facilitate the transfer of goods and materials. It generally involves a combination of road, rail, air and ship transport, providing higher flexibility and cost-effectiveness compared to a single mode of transportation.
This freight transport mode is usually more suitable for complex supply chains that require the involvement of multiple transportation modes for goods to reach their destination.
Understanding the Importance of Freight in Logistics
Freight is vital for smooth supply chain management, ensuring goods move on time while keeping costs low. Businesses count on freight for safe and affordable delivery, using different methods to streamline the process and track shipments.
Now that we have covered the meaning of freight and its types, it’s time to elaborate on its importance:
1. Role of Freight in Supply Chain Management
Supply chain management entails organising the secure flow of goods and services, from sourcing raw materials to delivering finished products to the end user. Freight ensures the timely and efficient movement of goods between various points of the supply chain while minimising costs and ensuring adequate availability of goods per market demand.
2. Impact of Freight on Business Operations
For businesses to profit, they need to ensure safe and timely delivery of goods, and that too cost-effectively. To do so, they can transport goods across short and long distances using various freight modes. Moreover, they can easily opt for alternative transportation modes in case of disruptions and keep track of the goods as they reach the end user.
Key Players in the Freight Industry
The freight industry consists of many key players, including freight forwarders who manage logistics and collaborate with carriers for transportation, carriers who physically transport goods, and shippers who oversee packing and labelling.
The following are the key players who are responsible for the functioning of the freight industry:
1. Freight Forwarders
Freight forwarders act as intermediaries between import and export companies and businesses that need their services. They cater to aspects like making storage arrangements for the goods before they are shipped, planning the transportation process, ensuring they get through customs without hassles, etc.
However, they do not handle the transportation of the goods. They partner with transportation companies that can ship products via road, rail, air, and ocean.
2. Carriers and Shippers
Carriers are entities responsible for physically transporting goods from one location to another. They are liable for the timely and safe delivery of goods and often offer a range of services like freight forwarding, warehousing and fulfilment, distribution, etc.
Shippers, on the other hand, are individuals or companies that arrange transportation. They are responsible for packing, labelling, and preparing the items for shipment and contacting carriers to transport them from their destination.
3. Customs Brokers and Freight Agents
Customs brokers are professionals who oversee transactions related to international shipments. They are responsible for customs entry, documentation, examination, checking counterfeit and contraband goods, and other related tasks.
Meanwhile, freight agents are independent contractors linking shippers with reliable carriers willing to transport their goods.
3 Key Factors Affecting Freight Pricing
Understanding the complexities of freight charges involves considering three key factors: distance and route, size and weight, and freight class and density. Have you ever wondered how these factors influence the pricing of freight services?
Well, these are explained below:
1. Distance and Route
Usually, the greater the distance between the pick-up point and the delivery location, the higher the freight charges. Additionally, the route taken by the transportation company to complete the delivery can also affect the distance and prices.
2. Size and Weight
Freight-related charges can vary based on the size and weight of the package. The size (package length, width, and height) directly impacts the space required for transportation.
Additionally, all transportation modes have a weight limit when carrying goods. Thus, the larger the package and the heavier the freight, the higher the price.
3. Freight Class and Density
Freight class refers to the standard shipping industry pricing classification and measurement for carriers and shipping businesses that are less than truckload (LTL) carriers. It includes the following elements:
- Density
- Storability
- Liability
- Ease of handling
On the other hand, freight density refers to the space needed for the shipment and can affect the shipment type and overall charges of freight.
Now that you understand what freight is and its importance for your business, all that is left to do is to hire a reliable logistics partner. In this regard, Porter for Enterprise can be an ideal choice.
We provide logistics and delivery services for both business-to-business (B2B) and business-to-consumer (B2C) companies in 20 cities across India.
Additionally, we provide two-wheelers, tempos, and mini trucks on demand for bulk deliveries and transport a wide array of goods, such as parcels, bulk couriers, FMCG items, agricultural goods, pharmacy and medical supplies, e-commerce merchandise, etc.
Handle business logistics like a pro with Porter! At Porter Enterprise, we provide hassle-free logistics solutions for businesses of all sizes, ensuring seamless transportation with our fleet of vehicles.
Frequently Asked Questions About Freight
1. How is freight different from cargo?
Freight usually refers to transporting goods via trucks, trains, or vans. Meanwhile, cargo refers to the overseas transportation of goods via ships, ocean carriers, or aeroplanes.
2. What are the common challenges in freight transportation?
Increasing operational expenses, business process enhancements, logistics management, and compliance with changing environmental regulations are common challenges in freight transportation.
3. What is freight vs shipping?
Freight involves transporting large quantities of bulky items. On the other hand, shipping includes a broader range, from small packages to larger loads, without size or volume restrictions.
