Jun. 3, 2021

Balance Speed and Cost with New Ways to Plan Your Transport Mode Mix

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So much of logistics is in flux right now. With demand at full throttle, the ocean market is choked out. Capacity is scarce, and transit times are long. Airfreight can provide quick relief in times of congestion, but it’s expensive.

What you’re looking for is the perfect balance of speed and cost. Decide which to prioritize by considering your products’ life cycles. Then, align your shipment strategies with your company’s sales opportunities.

If there were ever a time to refine your modal mix—this is it.

When Speed Matters

Faster is generally better when it comes to shipping. And faster when your competitors are slow or demand is unpredictable could help you triumph.

Determine how much speed your shipments need based on your product life cycles. This approach positions you to capitalize on sales demand and limit costs related to holding goods.

Here are a few instances where your company might tolerate higher shipping costs to gain speed and reliability:

  • New products are ripe for airfreight. Quicker cargo arrivals make it easier to stick to launch plans, satisfy the initial rush of demand, and build trust with your customers.
  • Seasonal products are another air contender. If you have a few weeks of allergy season to sell air purifiers, you want your bigger orders on a plane. Then when demand lessens, you might transition back to ocean shipping.
  • Trendy product categories perform best when available ASAP. Fast fashion, emerging tech devices, or the kids’ toy of the moment may have unknown windows of opportunity.

A quick tip: You may find it easier to justify the costs of speed if you blend landed costs over time—a quarter or a year—rather than try to flatten them in the short term.

Overcoming Volatility

Speedier shipping can also help to squeeze the most opportunity out of any products that are subject to unexpected market conditions. Many companies have been on a roller coaster for the past year-plus, relying on extreme agility to survive.

Now, as airfreight capacity begins to return alongside passenger travel, it could be worth it to invest in faster transport for at least two different fluctuations. Companies that experienced a spike during stay-at-home orders might want to capture the last of a good thing. And those waiting for the release of pent-up demand might want to be ready to go when a wave hits.

Customizing Your Modal Mix

You don’t have to think of your modal mix as an either-or choice; it’s not just air versus ocean. You could choose airfreight in the short term, even if you return to the ocean market later. Or book some of your shipments with premium services, like an expedited vessel and transloading to a truck, to split the difference.

Put that hard-earned agility to good use by figuring out when and how to shift your transport modes based on your business.

Sign up for Logistics Rewired: How to Build the Right Modal Mix When Space Is Tight to learn more about demand patterns and cost factors that could influence your decisions.

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