One of the most important decisions that any producer must make is how to ship the merchandise from the place of origin to the place of destination. This instance is even more relevant if the producer intends to export, since distances are even greater.   

In his book “Building an Import/Export Business”, Kenneth Weiss, an international trade expert, explains that “in international transportation, moving goods from one country to another can enhance or destroy the profitability of an import or export deal. Importers and exporters are inevitably involved in transportation functions such as packing, shipping, and insurance. If these functions are not handled properly, your goods can arrive too late, in poor condition, or not at all.”

This is why it is so important for producers to be acquainted with the available options for shipping merchandise overseas and decide which is the most appropriate depending on the factors that are in play.

1. Freight forwarders or direct contact with the transportation mode?

The first decision that exporters must make is if they wish to engage a freight forwarder.  

“Most exporters, and nearly all importers, use freight forwarders”, explain Jim Sherlock and Jonathan Reuvid, from The Institute of Export of the United Kingdom. “Their basic function is to act as intermediaries between shippers, with goods to send, and carriers with space to be filled.” They also provide professional advice and assist with documentation and customs clearance.

Sherlock and Reuvid mention four advantages in engaging this service. The first is that businessmen can use the experience of these professionals: “all forwarders should have a good grasp of basic international trade procedures and be able to give advice in a wide variety of areas, not just on physical distribution.” Second, exporters can use the contacts and the personal relationships that have already been established by the forwarder. In third place, these professionals typically find physical facilities for exporters to store their products in transit, for example. Finally – and maybe most important-, convenience: “many exporters and importers choose to do what they do well, which is to manufacture or procure goods and sell them overseas, and are very happy to subcontract the physical distribution problems to third parties.” 

But producers must also consider two significant disadvantages of this system. On the one hand, the exporter loses control over the process when it is delegated to a forwarder, which may be a cause of concern for certain businessmen. On the other hand, the cost of using this service can be considerable. 

2. Method of transportation

In general, there are five main options for transporting products: 

• Truck: most export products travel at least part of the distance in trucks, although there are very few who travel the whole distance through this means.   
• Train: currently, the railway transport of goods has decreased immensely. However, many products still travel at least part of the journey on railway lines.  
• Airplane: Sherlock and Reuvid explain that “the traditional use of air for high-value, low-volume cargoes will always exist but there is now a clear trend towards the increased use of air transport for many other cargoes.” In other words, not only those selling through eBay use air freight to deliver their products; it is also being used by producers of perishable goods, such as commodities or seafood. 
• Ship: Kenneth Weiss explains that “the largest weight and volume of international cargo, by far, are moved by ocean freight. The ability to handle huge weights and volumes provides a huge cost advantage.” 
• Multimodal transport: multimodal transport combines several modes of transportation for a single trajectory. For instance, Weiss explains, “a container may be transported from the factory to the port on a truck, which is then lifted onto a vessel and taken to the destination port and finally trucked to the consignee. Some shipments add rail to this scenario so that your cargo might travel on three kinds of conveyance under one bill of lading.”

Sherlock and Reuvid offer exporters certain tips for deciding the most convenient option, which can be summarized in five questions:

1. Where do you have to deliver your products? If the final destination is an island, for instance, road transportation should be ruled out. 
2. What is the availability of transport services in your country?
3. What type of product do you wish to ship? It is important to keep in mind factors such as size, segregation requirements (e.g., some products can be sensible to certain types of odors), fragility, value, date of expiry, or any other special requirement.
4. How fast must your product reach its destination? “It is not only perishable or high value goods which are appropriate to fast transit times”, explain Sherlock and Reuvid, “but also those for which there is an urgent demand.”
5. How much can you pay for transportation? In principle, the fastest transport mode (air transport) is usually the most expensive, and the slowest (sea transport) is less expensive. However, Kenneth Weiss explains that sometimes, even it terms of cost, air transport can be more convenient: “If your $100,000 export shipment arrives 10 days earlier because it was sent by air, you may get paid 10 days earlier. The value of that to you, at 12 percent interest, is $100,000 × 10/360 × 0.12, or $333. ”This is why Weiss recommends exporters to continue “to check and double-check rates and costs.”