Cargo Types by Sea, Air, and Rail

cargo type freight mode

Cargo (or freight) is goods or products transported, generally for commercial gain, by ship or aircraft, although the term is now extended to intermodal train, van or truck.

The choice of transport mode is the result of a number of factors, of which cost is important, but so are service levels, frequency and the general time value of transporting goods.

Different cargo types by sea, air and rail depends on what’s the most cost-effective way. Here’s basic rules not only applied to transport from China, but to the whole international logistics industry.

Goods Production Stages and Freight

Freight of Supply Chain

There is a direct relationship between goods production and freight systems, which can be associated with the three main stages of the value chain:

  • Raw materials. Most raw materials are undergoing three major transformations.
    • First is extraction, which is the process of gathering raw materials (harvesting, drilling, mining, cutting, depending on the nature of the natural resource).
    • The second is transshipment, which refers to the consolidation and storage process of bulk cargo, mainly occurring at ports and railway terminals. For example, a large proportion of tonne-kilometres transported by sea is bulk cargo.
    • Tertiary processing is the conversion of raw materials into components that can be used for manufacturing. Since economies of scale are strong drivers, processing activities tend to be closer to markets with specialized and high-capacity transportation modes and infrastructure (tankers, pipelines, mineral or grain bulkers, etc.). They often form port-industrial complexes.
  • Semi-finished products. This stage involves the manufacturing and assembly of parts and finished products. Depending on the complexity of the product, a complex series of connections and their associated processes occur between multiple enterprises in the form of manufacturing clusters. Intra-industry linkages tend to be horizontal, as firms attempt to control most stages of manufacturing a product or group of products. Depending on the product, the mode of transportation used varies, from air freight for high-value goods to containerized or less-than-truckload shipments of parts. Globalization has fundamentally changed this phase, with opportunities to exploit new manufacturing and assembly opportunities in low-cost locations through outsourcing and offshoring.
  • Finished goods. This stage involves the distribution of the finished product to the consumer market. The first process is distribution, which involves issues such as packaging, warehousing, and transporting the product to the market. This tends to occur in logistics areas where distribution centers are concentrated in accessible locations, such as ports or near major highways. Retailing is usually the final stage of the value chain where consumers (individuals and businesses alike) obtain products. Most movements tend to be regional, and trucking tends to be the dominant mode of distribution. E-commerce is an activity that has dramatically transformed the retail and distribution industry through home delivery.

Sea Cargo

Currently, shipping volume is accounted for 80% of total international transportation, and containers are used in most long-haul cargo transportation.

The reason of sea transport being adopted so widely is, because the following obvious advantages compare with other international freight shipping ways:

1. Carrying routing capacity.

Sea transportation is not like trains, cars which are limited by rails and roads, it has an extensive natural waterway to carry the goods which makes its ability to a high level.

2. Large carrying volume.

Vessel transport capacity is far greater than the rail transport and cars. For example, a 10 thousand tons ship is generally equivalent to the load capacity of 250 to 300 wagons.

  • Automobiles are usually carried on specialized roll-on/roll-off ships.
  • Break bulk cargo is typically material stacked on pallets and lifted into and out of the hold of a vessel by cranes on the dock or aboard the ship itself.
  • Bulk cargo is usually defined as commodities that are neither on pallets nor in containers. They are not handled as individual pieces, the way heavy-lift and project cargoes are. Alumina, grain, gypsum, logs, wood chips, etc. are bulk cargoes.
  • Containers are the largest and fastest growing cargo category at most ports worldwide. Containerized goods includes everything from auto parts, machinery and manufacturing components to shoes and toys to frozen meat and seafood.

3. Low shipping costs.

In accordance with the view of scale economies, as the large volume, long distance, sharing transportation costs per unit is very low, then total freight rate is low relatively.

Although sea transport has above advantages, but there are also some inadequacies. For example, sea transportation delayed by climate and natural conditions, shipping date is not so accurate as trains and is more risky. In addition, sea transport speed is not as fast as trucks or trains.

Air Cargo

Air cargo, commonly known as air freight, is a modern mode transportation, compare with sea transport, rail transport, it has the advantages of fast transport, high-quality, and not limited on ground conditions. Of course it cost more.

It is the most suitable way for delivering urgently needed supplies of fresh goods, precision instruments, valuable goods, etc.

In just about all businesses, time is money. So, does the higher cost of shipping by air get diffused by the increase in speed? Also keep in mind that as we move forward, technology is consistently making shipping by ocean faster. This is happening through better vessels, faster management resources and more accurate communication.

Rail Cargo

Trains are capable of transporting large numbers of containers that come from shipping ports. Trains are also used for the transportation of steel, wood and coal.

They are used because they can carry a large amount and generally have a direct route to the destination. Under the right circumstances, goods transport by rail is more economic and energy efficient than by road, especially when carried in bulk or over long distances.

If rail freight from China to Europe, it will save about 70% than by air, while the transit time will be shorten 50% than by ocean.

There are many advantages of railway transport, generally it’s not influenced by climatic conditions, so it can ensure an annual normal transport, and loading is larger, speed is fast, high continuity, and less risk during the transport operation.

The main disadvantage of rail freight is its lack of flexibility. For this reason, rail has lost much of the logistics business to road transport.

When you have goods to transport, the first thing is to determine the cargo types and find what’s the most suitable way for delivery.

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