Please respond to both students separately with a minimum of 100 words minimum each
Discuss the criteria determining whether a company should source its materials and move its products via Air Freight versus via Sea Freight.
Most companies do not have the ability to insource all the materials needed to provide the product or services demanded by their customers. This is due the fact that most companies realize that there is a significant cost savings by letting companies that are really good at producing materials do that piece of the business. This allows a company to focus on what they are good at instead. There is also a significant amount of investment that company must do to provide its on materials. With sourcing they do not have to have that large investment and they can quite using that product whenever. After deciding that you wish to source your product comes the issue with having the product delivered to you. The two options that you have in most cases when it comes to international shipments is either by sea or air. Both air and sea shipments offer pros and cons to each mode of transportation. With air shipment you have the ability to have the product delivered to fast than that of sea transportations. Air transportation also has an increased amount of reliability with it too. With air you are able to easily track the product and predict arrival times. The down side to air transportation is the overall cost is significantly more. Sea transportation on the other hand offers a much more affordable transportation. However, sea transportation is much slower at shipping the product and can have issues with reliability. If you have a product that is high valued and in low demand then air transportation can be the best fit. This is because you are not having to ship the product consistently but only when its needed while still being able to meet and reliability concerns. If the product needed is always in consistent demand then sea transportation can offer the most affordable solution. The important aspect to this would be making sure you are setting inventory and lead times that can handle to cons of it.
Transportation is subject to a rise and fall in profit and operating costs no differently than any other business is affected by the economy. Every part of supply and demand is determined by the economy. When a company is seeking a transportation shipping option they can be comfortable that all shipping options are playing the same field as for how the market value is at that given time. There are however clear differences in the things that should be considered when looking to ship by air versus shipping by sea. The first consideration should be size. Ships can hold more cargo than air planes. This is a true statement for weight and cubic area. That is just simple physics. Think of how easily you can pick up heavy objects in water compared to the intense effort it takes out of the water. Another consideration is speed. It is faster for freight shipped air than it is for freight shipped sea board. Cost is competitive with each other. Most company’s think time is money. If it is cheaper for freight to go in a container on a ship but takes longer to arrive it could easily cost more to the company than paying more for faster delivery. Also consider the excess steps products might need to ship by sea. Most metal objects are required to be covered in some layer of anticorrosive protections due to the humidity that can be very damaging. I always take the opportunity to talk about the effects transportation has on the planet. While air planes do burn substantial amounts of fossil fuels and leave a large carbon imprint the historic evidence of planetary damage has not quite been assessed. The devastation to the world’s oceans and the ocean life that is so drastically affected has been documented and proven. Container ships leak oil and fuel, they carry evasive species around the world and they disrupt the migrating patterns of sea life. I had the opportunity to go to Busan South Korea the second largest shipping port in the world and observe the brownest dead looking foul smelling water that a train of container ships was sitting in.
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