Posted in Operations and Supply Chain Terms, Total Reads: 247
The business definition of shipping is “a very basic and common medium of getting cargo moved from one place to another, or from one person to another”. It is the physical process of transporting commodities and goods merchandise from one location to another.
Logistics is most often used synonymously with the term “shipping”.
There are different modes of shipping as under:
i) Land or ground shipping refers to transportation of goods by train or truck. Even in air and sea shipping. Ground transportation is necessary to move the cargo from its production facillity to the seaport or airport and then further to its final destination as the production facility may or may not always be located near the ports.
ii) Shipping using ships is one of the most important modes of shipping. It is referred to as merchant navy. Merchant navy is the lifeline of world economy as it carries more than 90% international cargo with approximately 102,194 commercial ships in operation worldwide.
iii) Air shipping is done using specialised cargo aircraft and also in the luggage of passenger aircraft. This is the fastest but the most expensive mode of transport for long distance freight.
iv) Intermodal shipping refers to shipments which typically involve more than one of the above listed modes. International shipping containers are mostly common transported via road, rail and ship.
INCOTERMS are generally used in international shipping operations which are published by the International Chamber of Commerce (ICC). They are generally used to clearly communicate the costs and risks associated with the transportation of goods. They were first published in 1936 and have been periodically updated with the eighth version published in 2010.