How to Choose the Right Type of Cargo Transportation

Which type of transport is the most cost-effective for your cargo? The efficiency of international cargo transportation depends significantly on the type of transport used. The best choice often depends on balancing the following criteria:

1. Minimizing Transportation Costs. Opt for modes of transport with the lowest operational costs or tariffs, such as sea freight for large volumes over long distances.
2. Minimizing Transit Time. Air freight is the fastest option, suitable for urgent or high-value shipments, but it comes with higher costs.
3. Reliability. Choose transport modes with the least risk of delays. Rail and air freight are generally more reliable than sea transport, which can be affected by port congestion or weather conditions.
4. Maximizing Transport Capacity. If transporting large quantities, sea freight offers the highest capacity, followed by rail and road transport.
5. Availability. Select a mode that can be readily deployed when needed. Road transport is often the most flexible and available option for shorter distances or complex routes.
6. Safety of the Cargo. Ensure the mode of transport protects the goods from damage, loss or theft. Containers are highly secure for sea and rail transport, while specialized trucks provide added safety for road transport.
7. Adaptability to Conditions. Opt for transport services that can operate under varying conditions, such as extreme weather or remote locations. Road and rail are less affected by climate compared to air or sea transport.

Choosing the Right Method for International Cargo Transportation

In some cases, shippers prioritize a single, most important criterion when selecting a mode of transport for their goods. A common example is choosing air transport based on minimizing the time the goods spend in transit. This illustrates that even when multiple criteria are considered, they are often reduced to a single metric—usually cost—on which the final decision is based.

For instance, when selecting air transport, it is assumed that the expenses and financial losses caused by delayed delivery of goods outweigh the costs of using the most expensive and least efficient transport method. Air transport is chosen despite its higher costs, as its speed aligns with the shipper’s priorities.

When choosing a mode of transportation, it is crucial to avoid substituting one criterion for another, as this can lead to incorrect decisions. For example, while airplanes have the highest technical speed of movement, this does not necessarily translate to the fastest delivery. Aircraft may not always be able to transport oversized cargo or ensure the quickest delivery time.

There are situations where a truck can deliver goods to their destination faster than an airplane. This is because ground transportation does not require initial delivery to an airport, unloading and reloading, as well as the additional technological processes necessary for air transport.

Assessing Cargo Delivery Costs

Cost evaluation can be applied to all criteria, not just the direct calculation of transportation expenses. For example, it is possible to estimate losses due to anticipated cargo damage, limited availability of transport services or insufficient carrying capacity. This perspective highlights the importance of identifying a single indicator as the selection criterion for transportation methods: expenses associated with cargo delivery.

The level of expenses is influenced by numerous factors that must be accounted for in accordance with the Total Cost Concept. This approach ensures that the operation of individual components within the logistics chain is optimized to minimize the overall costs.

In this case, low transportation reliability is not only the time delay of goods relative to the planned schedule, but also the associated losses, such as:

• Idle time of the main production line at the factory due to the absence of required components.
• Losses from delayed market entry with a product compared to competitors.
• Losses due to the disruption of a lucrative contract, among other potential impacts.

Factors Affecting the Cost of Freight Transportation

Several factors influence the total cost of freight delivery from Europe to Ukraine, including reliability of delivery, cargo safety, availability of transport services and others. In practice, detailed calculations for criteria values across various options are not always conducted to choose the best mode of transport. Often, qualitative assessments such as “more” vs. “less,” “expensive” vs. “cheap” or “better” vs. “worse” are sufficient for decision-making.

In addition to the aforementioned factors, other key considerations influencing the choice of transportation method include:

• Financial stability of the carrier.
• Availability of additional services, such as freight forwarding, cargo consolidation, and delivery.
• Flexibility of transport routes.
• Capability for rerouting cargo during transit.
• Regularity of transport operations.
• Qualification of the carrier’s personnel.
• Cargo tracking in transit via communication systems.
• Flexibility of tariff schemes for transportation.
• Ease of submitting transport requests.
• Quality of transportation services.
• Environmental friendliness of the transport vehicles.

The list of factors considered by each company when selecting a carrier can vary significantly and may include several dozen criteria. 

A common approach to solving multi-criteria decision-making problems is to prioritize one key indicator while treating other criteria as constraints. For example, in logistics, this might mean selecting the transport method based on minimum transportation tariffs, but with the condition that the delivery occurs no later than a specified deadline and that the carrier assumes full responsibility for the safety of the cargo or goods. The formulation of the objective function and the selected constraints may differ depending on the transportation conditions and the preferences of the decision-makers.

Choosing the Right Transport Mode for Cargo Delivery

In certain situations, the choice may arise between road and rail transport (for distances of up to 1000–1500 km) or between air and road transport (for urgent, perishable or high-value cargo). For the transportation of bulk and relatively low-value goods (such as ores, construction materials or liquid cargo), water and rail transport may compete with each other, though water transport usually offers lower delivery costs.

At the same time, one mode of transport may replace another. For instance:

• Road transport often replaces rail transport for long-distance deliveries due to its speed advantage, despite higher costs.
• Rail transport can displace road transport, even over shorter distances, when environmental regulations limit the ecological impact of transport activities.

Characteristics of Transport Modes

• Rail Transport: Commonly used for bulk and regular shipments over long distances. Its efficiency is pronounced in cases where environmental considerations and volume capacity are key factors.
• Maritime Transport: Alongside river transport, maritime shipping has historically been pivotal for large-scale containerized freight. It is widely utilized for international freight shipments, with coastal shipping fleets handling deliveries between coastal points, particularly in regions like the Russian Far East.
• River Transport: Primarily suited for low-value bulk goods where speed and high cargo integrity are not priorities. It is especially effective for transporting construction materials (e.g., sand, gravel, limestone or sand-gravel mixtures). These materials can often be unloaded at virtually any riverbank location, with the riverbed dredged if necessary.
• Road Transport: Essential for connecting cargo to major transport networks and enabling other modes of transport to function. It is unparalleled for delivering smaller consignments (ranging from a few kilograms to 20–40 tons) and is particularly effective for consolidated cargo, especially when speed is critical.

Road transport remains a crucial component of the logistics network due to its flexibility, speed and ability to handle diverse delivery needs.