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How Does The Shipping Industry Work?

How Does The Shipping Industry Work?

The international shipping industry is responsible for 90% of the world’s trade. If there were no shipping, import/export of manufactured and affordable goods, raw materials and intercontinental trade would not be possible. Trade via sea continues to expand across the world, facilitating domestic and global trade of commodities and finished products, while also facilitating manufacturing and delivery of goods to consumers. According to ATA reports, the trucking industry moved 10.23 billion tons of freight in 2020 and generated $732.3 billion in revenue!
The shipping industry is equipped with a wide variety of commercial transport methods from railcars to “intermodal” container shipping. The industry relies on four major modes of transportation: marine, air, rail, and freight (trucking).

How Does The Shipping Industry Work?

To understand how the shipping industry works, it is essential to review how each of the four methods of transportation work individually.


The marine industry includes general cargo ships, tankers, bulk carriers, and container ships. General cargo ships carry a variety of items including materials and goods which are loaded on pallets. The container ships carry stacks of uniform steel containers. This method is known for its efficiency as it allows bulk shippers to convey their commodities, for example, forest products, grain, coal, and iron ore in large amounts. The tankers are also equipped to carry chemicals, crude oil and liquid cargo, such as noncured petroleum products. The marine industry is also cost efficient. According to a survey by the World Shipping Council, a kilogram of coffee can be transported from U.K. to Thailand for as low as $0.15.


The commercial air cargo sector included expedited delivery services, for example, FedEx, UPS and DHL. 60% of air cargo is flown from one destination to another through dedicated air freighters, whereas the rest is transported within the lower cargo holds of passenger aircrafts to trade or consumer end points.


In rail transportation the cargo is transported via regional and national rail networks. Rail networks allow for commodities to be transported in bulk, either within secure cars or open railcars. The rail sector plays a pivotal role in intermodal transportation. The containers are specifically designed and transferred from one mode of shipping to another without intervention. For example, a container coming into a port via ship can be transferred to a nearby rail yard car with help from an automated port transfer system. Commercial rail is an asset to one-third of U.S. exports.


Freight includes two major categories: full truckload and less than truckload. Full truckload caters to bulk goods, whereas less than truckload carries goods for small businesses, using only a portion the truck’s capacity. Therefore, reducing costs because businesses only pay for the space needed. According to statistics, the American Trucking Association transports 70% of the total freight tonnage in the U.S., each year. This sector of transportation facilitates the movement of goods from one port to another. The freight industry also plays a pivotal role in enabling domestic commerce.

The shipping industry has made access to raw material easier and has consequently aided the development of economies. It enables the manufacture of affordable goods and products with the lowest environmental footprint and costs.


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