Advantages And Disadvantages Of Shipping

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Shipping is the movement of goods using a motorised vessel in ocean or inland water channels. Vessels are specifically designed to suit the goods that are being transported. Australia is the world’s fifth-largest shipping nation in terms of tonnes shipped and kilometres travelled. Shipping is the primary interface between Australian and the international markets due to Australian being isolated by sea and shipping having a significant advantage over Air due to the ratio between capacity and cost. Also since the Australian economy is based on the production of natural resources the only way to move this cargo to export is by water. In the Domestic market how ever, shipping only accounts for 16.8% in 2011/12. Majority of the domestic cargo moved is bulk commodities such as iron ore, petroleum and aluminium ores, this accounting for 70% of the coastal shipping market. The major corridors for shipping are between Weipa and Gladstone (in Queensland) and the Pilbara and Port Kembla accounting for 30 per cent and 20 per cent, respectively, of total domestic sea freight. The figure below shows the major ports located around Australia. The largest movement of goods, import and export are in the Ports located in the capital cities and including Port Hedland and Broome due to the large flow to bulk goods…show more content…
Planes being able to reach speeds of up to 900km/h. This can considerably reduce lead times, meaning lower inventory level and small inventory carrying costs for a shipper.
Reliable – Air has stringent to strict schedules for Air traffic control, their for delays in transportation are minimal. Planes taking off and land on time. Therefore, are good for the flow in a supply chain
The following states Air Freight disadvantages:
Cost – air freight is the most expensive mode to move goods. High fuels cost, expensive infrastructure, strives costs up. Air has a large fixed cost but low variable
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