Why use water freight?
Why should UK businesses make use of water freight?
Often the arguments put forward for water are about the benefit to the country and indeed the world as a whole – reducing road congestion or helping avert climate change for example. But the case for water for freight movements within Europe is a sound business one – it can aid a company’s supply chain and their ability to compete in business.
Five reasons for companies to use water freight:
Customers can realise substantial savings in their supply chain by making use of short-sea, coastal and inland waterways. Sea freight allows users to aggregate volume on the largest scale available for any mode.
Consequent savings on employment costs, fuel and operational expenses mean that water can provide a service that can remove cost from the supply chain.
Despite the efficiency of the modern supply chain problems can occur with all modes. Accidents, infrastructure failure, weather, labour disputes and many other issues can create problems. It is sensible therefore to have available to a company all the available modes, so that, for example, in the event of weather disruption on roads alternative methods of delivery are available. A spread of modes, including water freight provides the greatest resilience for a company’s supply chain, reducing exposure to risk.
Oil typically makes up 35% of road freight costs, but only around 17% of water freight costs. This means that whilst road freight costs will fluctuate substantially with changes in oil prices, water freight gives greater price stability, allowing better business planning.
Consumers and businesses are increasingly taking note of the carbon footprint of products and of the companies’ environmental credentials that supply them.
Businesses are also now increasingly requiring information on pollution management as part of tender processes. Government is now starting to account for transport carbon emissions and to allocate reductions that should be met by the sector under various carbon budgets..
All companies, as part of best practice processes, need to at least examine the potential for utilising more pollution efficient modes.
Oil prices. Road congestion. Infrastructure tolling. Carbon taxes. EU regulation. There are few certainties for what will come for the European supply chain but many threats. So it is good business practice to have answers ready for potential problems that that can be anticipated.
Utilising water freight today allows companies to have a system in place to prevent adverse consequences if any future issues should make traditional networks less viable.