Types Of Shipping: What Should I Evaluate When Choosing?
The different types of freight such as cowtown express for instance directly impact the final delivery price for your customer, so it is essential to understand each one and choose the model that best suits your business profile. When choosing, you must consider several variables such as type, the quantity of cargo transported, and distance traveled to the destination.
It is also necessary to assess whether the cargo will need extra security or whether it will be necessary to hire a partner carrier to complete the delivery. It is essential not to forget about documentation and taxes that impact the final value, regardless of the type of freight chosen.
What Are The Types Of Shipping?
When you choose the ideal type shipping for your business, there is a decision that needs to be made: Better understand the two types of shipping that will help you make this decision.
The CIF freight (Cost, Insurance and Freight) means Cost, Insurance and Freight. In this mode, the responsibility, transport risk management, and costs are the responsibility of the cargo shipper. In this case, taxes are levied on the value of freight and merchandise. The customer pays a single amount (the product’s price, taxes, insurance, and shipping) used as a basis for calculating the Tax on Circulation of Goods and Services (ICMS). This type of shipping is recommended for companies that sell directly to the final consumer (B2C), such as e-commerce.
The Shipping FOB (Free On Board) means free on board. The supplier, in this case, is no longer responsible for the cargo at the time it is dispatched for delivery. The customer, in turn, is responsible for the logistical processes, such as payment for all insurance and transport costs upon delivery.
In these types of freight, taxes are specific to transport services. This modality is recommended for trade between companies (B2B), as the buyer often already has its logistical processes and a partner network that can optimize the delivery time and cost.
What Is The Freight Contracting Models?
There are four types to consider when contracting freight: normal, subcontracting, redeployment, and intermediary redeployment.
Regular shipping is the most common mode. The product is collected from the sender by the carrier and then delivered to the recipient. There is no company or supplier involved in the middle of this transaction.
The subcontracting model occurs when the carrier hires another company to deliver the products to the customer. The journey is carried out only by a carrier such as cowtown express amongst others. This usually happens when the delivery area is outside the carrier’s coverage route or delivery times are too short of supporting the operation.
Two carriers carry out the reshipment of the delivery route. The carrier hired by the customer travels from A to B, and the partner hired by the carrier travels from point B to the destination.
The contracted company does not collect the product or deliver it to the destination of this type. The carrier responsible for the intermediary redeployment receives the goods from a carrier and carries out the intermediary transport to the point where another carrier will make the final delivery.
Types Of Cargo: Differences Between Fractional Cargo And Stocking.
Cargo characteristics can also influence how the service is performed, costs, and delivery times.
It is recommended for orders with few items or reduced volume. For transportation to be worthwhile, the vehicle needs to have its load filled with orders from other customers.
This modality is more economical as it serves several companies at once and indirectly divides the freight cost. And orders are normally distributed at delivery points.
It is recommended for orders in large quantities that occupy the entire capacity of the transport vehicle, taking full advantage of optimization. In this case, the products go directly to a specific delivery point, and the shipping is paid in full by the buyer.