Freight Transportation Service Spectrum

Freight Transportation Service Spectrum

Source: adapted from Global Insight, Inc., TRANSEARCH database, and U.S. Department of Transportation Freight Analysis Framework data.

Cargo value and weight are related to the mode of transportation used and usually the outcome of a balancing act between cost, capacity, and level of service. Freight offers a whole spectrum of transport services, each with its own cost, speed, and reliability characteristics. On one side of the spectrum, air cargo is the fastest, but the most expensive, which caters to high value and time-sensitive cargo. On the other side of this spectrum, maritime transport offers low costs, high capacity, but low speeds. While this is suitable for bulk trades (e.g. oil and raw materials), containerized shipping is coping with low speeds by offering high service frequency. Rail transportation is in the middle of this spectrum.

The freight service spectrum is obviously conditioned by geography and underlines a duality between maritime and inland transportation:

  • Inland transportation is serviced by the whole range of transport services, implying greater costs/time options, including intermodal rail. Still, inland transport systems usually have capacity constraints because of more limited water transportation options on fluvial systems.
  • Intercontinental transportation is facing a dichotomy where shippers are constrained by two opposite options; air and maritime. Freight can either be placed on the fast or the slow lanes, implying different supply chain management strategies.