Introduction
The transport process is a set of operations with cargo and vehicles, as a result of which the cargo changes its position in space. The essence of transportation work is to change the location of freight. Transport as a control object is a set of united elements for the implementation of the carriage process. According to Sreenivas and Srinivas, “A good transport system in logistics activities could provide better logistics efficiency, reduce operation cost, and promote service quality” (5). The transport process plays a significant role in the logistics of business: it takes thirty percent of logistics costs and significantly influences the logistic system performance. Transporting is necessary for any step of production: manufacturing, delivery, etc. This essay will compare and contrast the transport process of solar panels from the United States to Australia, and the transport process of coal from Australia to the United States, as well as discuss the factors affecting the cost and efficiency of transport processes.
Solar Panels
The Sun plays an exceptional role in the life of the Earth. The whole organic world of our planet owes its existence to the Sun. The Sun is not only a source of light and heat but also a source of many other types of energy. Humanity needs energy, and its needs are increasing every year. At the same time, the reserves of traditional natural fuels such as oil, coal, and gas are finite. Therefore, it becomes increasingly necessary to use non-traditional energy resources, primarily solar, wind, geothermal energy, along with the introduction of energy-saving technologies.
Solar panels were invented in the middle of the twentieth century as a tool to convert solar energy into electricity. Typically, it consists of several combined photoelectric converters, also known as photocells, semiconductor devices that directly convert solar energy into a constant electric current. Solar panels bring many benefits: they are weather-resistant, cost-efficient, do not require maintenance expenses, and are easily installed. The two major manufacturers of solar panels in the United States are First Solar and Sun Power. The only manufacturer of solar panels in Australia has been continuously suffering from the low prices of Chinese imports.
Coal
Coal is the product of plant remains that died many millions of years ago, the decay of which was interrupted by the cessation of access to air. People have been using coal as a source of energy since ancient times, along with firewood. Initially, it was found on the surface of the ground; however, later, it was deliberately mined. All types of coal can be used to produce heat. When burned, it releases much more heat than wood or other solid fuels. According to the Department of Industry, Innovation, and Science, “Coal is a fossil fuel accounting for around 40 percent of total world power generation”.
Australia, despite its remote geographical location from the developed countries, manages to hold powerful positions in the global economic arena. Australia’s nature is rich in minerals, and its mining industry is the most successful export industry. The largest branch of the mining industry is coal. Currently, Australia is the leading supplier of metallurgical, thermal, and black coal to the world market, especially in Asian countries. Although the United States has many coal reserves, lately, mines are increasingly being closed down, and the production has decreased by twenty percent (Koch). The amount of imported coal is increasing because importing is much cheaper than the cost of coal mining in the U.S.
Transporting Solar Panels
The transport process does only imply moving products from one place to another. There are also significant elements such as packaging, loading, and handling. The delivery process of solar panels, as well as safe, proper, and efficient packaging, is essential because inadequate transportation can leave scratches and damage a panel, causing additional expenses for the company. This aspect of the solar industry is often ignored. According to Niclas, “good packaging is essential to reduce the potential impacts of various, high probable factors that can occur during transport, such as rough handling during loading and unloading, walking on the pallets by workers, stress vibrations to the modules while being carried in a truck on a bumpy road, bouncing of badly-packed modules on a pallet while shipped via sea.” In this case, solar panels have to be shipped over a long distance. Therefore, packaging, loading, transporting, and unloading should be performed correctly.
It appears that currently, there are no officially established standardized transportation manuals. A basic packaging procedure goes as follows: solar panels are usually placed vertically or horizontally in a box. Each module stack has several separators in between and extra protection on the corners. Then, the box is sealed and wrapped in plastic film. Typically, depending on the order quantity, pallets hold approximately thirty panels and are shipped across the ocean. Usually, in horizontal packaging, panels are separated with plastic or carton boxes which are not strong enough. When packed horizontally, the weight can exert pressure on panels on the bottom, and small cracks can be formed. The effect of these cracks can be seen only after the utilization of solar panels. Vertical packaging, on the other hand, is a better solution for preventing the formation of cracks. In this case, panels are tightly bonded to each other, leaving no space in between to avoid any movements and damage. Thus, transporting solar panels requires extra careful handling and packaging, especially when it is being sent overseas.
Transporting Coal
Transportation of coal, contrary to solar panels, is less delicate but still requires many resources, workers, and heavy machinery. The most common way to transport coal inside the country is via trains or ships. Some statistics show that shipping costs less expensive than trains. Since coal is traveling from Australia to the United States shipping method fits best. Maritime transport – is one of the oldest and most energy-efficient methods of transferring goods and people, which has not lost its relevance up to today. The United Nations reports that “Maritime transport is essential to the world’s economy as over 90% of the world’s trade is carried by sea, and it is, by far, the most cost-effective way to move en masse goods and raw materials around the world” (“International Maritime Organization Profile”).
From Australia, coal is primarily exported from the East of the country. Some of the main ports are Abbot Point, Brisbane, Dalrymple Bay, Gladstone, Hay Point, and Newcastle. According to Open Sea, “In general, most of the coal exported out of Australia is mainly shipped to China, South Korea, and Japan. Panamax and Capesize vessels are primarily utilized in this trade, and the loading rate is very high with a Panamax vessel loaded within about one day only; however, in some cases, the waiting time is long due to the congestion.” (“Coal: The “Black Gold” of Dry Bulk Shipping.”). Typically, coal is delivered in rail wagons to the loading port and loaded onto a loading conveyor. Quick loading is also important as it allows for reducing freight costs.
Storage space is a common issue because of the vast amount of exported coal. Australian Coal Charter is a major voyage charter party that is used for coal trades (“Coal: The “Black Gold” of Dry Bulk Shipping.”). Thus, although transporting coal sounds less complicated, it requires appropriate equipment for loading and unloading.
Factors that Affect Cost and Efficiency
Nowadays, international trade has become an essential part of the economy because it allows the import of necessary products and the export of others. However, according to Behar and Venables, “international economic interactions remain small relative to interactions that take place within national borders” (1). It happens due to the factors such as long-distance, weather conditions, borders, political restrictions, or high costs of transportation. Some of the most important factors that affect the cost and efficiency of transport processes between Australia and the United States are discussed further.
Ocean
Firstly, intercontinental transportation is usually long-distance and requires an extended delivery time. Since energy use associated with transportation is significant, this factor can significantly affect the efficiency of the transport process. Furthermore, when shipping across the ocean, the transport process highly depends on weather conditions, and it can impose certain restrictions or even dangers. The Pacific Ocean is in constant motion, and weather is often changeable as it continuously interacts with the atmosphere. According to Gubbins, “Wind forces generated by the ocean weather systems can build up the very large wave and swell patterns resulting at best in slowing the ship’s speed over the ground, at worst in damage to the ship, passengers, cargo or crew, and in some cases in total loss of the vessel” (47). Thus, weather plays a critical role: it can slow down the delivery time, damage the cargo or cause its loss.
Even with the presence of highly developed navigation systems, loss of cargo or container also seems to be a common contributing factor to the cost of the transport process. According to World Shipping Council, more than five hundred containers are lost every year due to human-caused mishaps, and almost two thousand containers are lost due to catastrophic events annually. These statistics have a growing tendency. Nevertheless, the maritime transport industry has been taking measures to improve container safety and minimize loss through various safety conventions, revising standards, and implementing codes of packing. It is also important to note that, as a consequence, ship transportation contributes to air pollution.
Borders
Complex, mandatory regulations at borders can affect the efficiency of transport processes between Australia and the United States. Free Trade Agreement between the two countries was signed in 2015, and since then, the mutual trade of goods and services has increased. In order to export any product, domestic government regulations and international agreements of both countries have to be carefully taken into account to reduce additional costs. For instance, the Department of Industry, Innovation and Science of Australia reported that mining has special export control regulations, which are “federal laws that prohibit the unlicensed export of certain commodities or information for reasons of national security or protection of trade.” On the other hand, to import goods to Australia, importers have to classify and go through self-assessed declaration procedures of the Australian Customs and Border Protection Service (Australian Trade and Investment Commission). These procedures can be challenging and confusing.
Unexpected changes in import or export policies, as well as other political events, can also significantly complicate transport processes. According to Gubbins, “Political events can cause problems that are both track related and operationally significant” (48). For instance, a country can sanction a specific product from importing due for various reasons. In this case, Australia could forbid the import of solar panels due to already existing high competition with Chinese suppliers. It would result in larger losses for American importers. Thus, being informed and having an adequate amount of knowledge about such regulations, tariffs, taxes, permits, and export subsidies is highly recommended for efficient transport processes as goods that fail to meet the requirements can be seized by border protection agencies in both countries.
Transportation Costs
Transportation costs are most likely the most important factors influencing the efficiency of the transport process. Researchers note that “During the last century, the improved effectiveness, larger ships and even more effective organization of maritime operations lead to a steady reduction of transport costs and a better quality of services” (Jugović et al. 26). Indeed today, due to the developed international trade, maritime transport has become more available. The calculation of transportation cost is usually based on such subfactors as season, service charge, fee, container capacity, and currency fluctuations. Depending on the time of a year, fees can alter; fees upon arrival to the port and before leaving it can also vary. Since currency is different in the two countries: the Australian dollar is more expensive, prices for transport may be slightly modified. Container capacity also affects the cost in small order quantities. However, in this case, this factor appears to be irrelevant because exports and imports will be in large quantities. Thus, transportation cost is also dependent on many other details, and its price significantly dropped due to the progress in the industry.
Conclusion
As discussed earlier, ocean freight is an extremely popular and affordable means of intercontinental and domestic transportation of goods and raw materials. The greatest advantage of maritime transport is the ability to move big amounts of cargo in one ship once. In addition, it is the cheapest method of transportation. Disadvantages include a relatively slow speed of ships and the probability of cargo loss due to weather conditions.
Australia and the United States of America agreed to free trade in 2015. Since then, the bilateral business has positively influenced the economy in the countries. A mutual interest can be observed in this case: the U.S. needs imported coal due to a decline in mining rates and high costs, whereas Australia has only one manufacturer of solar panels. Transportation of solar panels requires exceptional care during all steps: packaging, stacking, and unloading because they can easily be damaged. Even a microcrack in a solar panel can cause serious malfunction later. Coal, on the contrary, requires heavy machinery and equipment such as rails, cranes, and conveyors. Factors such as long-distance and ocean weather, border regulations, and international policies, as well as season, currency, and fees, have been identified to influence the cost and efficiency of transport processes between two countries.
Works Cited
Behar, Alberto, and Anthony J. Venables. Transport Costs and International Trade. Web.
Department of Industry, Innovation, and Science. “Coal.” Industry.gov.au, Web.
Gubbins, Edmund J. Managing Transport Operations. Kogan Page Limited, 1996.
“International Maritime Organization Profile.” Business U.N., Web.
Jugović, Alen, et al. “Factors Influencing the Formation of Freight Rates on Maritime Shipping Markets.” Scientific Journal of Maritime Research, vol. 29, 2015, pp. 23-29.
Koch, Wendy. “U.S. Coal Imports Surge While Exports Plummet.”USA Today. 2014, Web.
Niclas, D. “Basics of Solar Panel Packaging.”Sinovoltaics, 2014, Web.
“Coal: The “Black Gold” of Dry Bulk Shipping.” Open Sea, Web.
Sreenivas, M. and T. Srinivas. The Role of Transportation in Logistics Chain. Web.
World Shipping Council. Survey Results for Containers Lost at Sea – 2014 Update. Web.