Strengths And Disadvantages Of Intermodal Transportation
SilicaChem could use intermodal to serve the stable part of the demand and use road transport to serve the fluctuated part. However, sophisticated planning and good relationship with carriers and customers would be required in this mixed mode alternative.
Another alternative the company could consider is using multiple carriers in intermodal transport. As illustrated in Appendix 1, the quotations of the same route or activity from two carriers can be significantly different. Therefore, it is beneficiary for the company to understand the cost components of carriers and the rationale behind the quotations, in order to grasp the opportunity of better deal and more reliable service (Jennings and Holcomb, …show more content…
However, sea freight has several weaknesses that decision makers need to be aware of. Firstly, it has a much longer transit time, which falls beyond the 1-2 week lead time required by the end customer. Therefore, high level of inventory in pipeline and warehouse is needed and urgent air freight shipment is necessary. Secondly, various kinds of delays can frequently occur during sea freight transportation, owning to pre-shipment delay, bad weather, or other disturbing factors (Rushton, 2010). Unreliable delivery could add handling, coordinating and back order cost to the supply chain. Lastly, compare to air transportation, sea freight is exposed to more risk of damage, which may require better packaging and thus increases packaging cost (Rushton,