Glosario Logístico What are the differences? Port-to-Port vs Door-to-Door

In the fast-changing modern business environment of rapid production, retail, and consumption, seamless logistics determines the competitiveness of a company. Logistics services like on-time supply of raw materials, inventory management, and delivery services have a direct impact on a company’s performance. Also, this can be a determining factor for consumers’ satisfaction and loyalty. A company that can swiftly respond to consumers’ needs and provide reliable delivery services can gain the upper hand in the market.

As such, the logistics has played an important role in promoting cross-border trade, business competitiveness, and consumer satisfaction and is regarded as indispensable. In this blog, we are going to closely look at exemplary types of transportation — Door-to-Door, Door-to-Port, Port-to-Port, and Port-to-Door.

⦁ Door-to-Door Transport
It delivers cargo from the origin to the final destination. It is convenient and quick but relatively costly compared to other types of transport as it is direct and has comprehensive options.
It usually uses both land and sea transportation modes.

⦁ Recommended Incoterms for Door-to-Door
The best incoterms for the Door-to-Door is DAP (Delivered at Place), which means that a buyer has the responsibility for receiving cargo at the agreed destination.
Through this transportation, a seller can guarantee whether the cargo is handed over and bear the costs of the whole process of the transportation.

⦁ Door-to-Port Transport
Under this condition, it delivers cargo from the origin to a port of loading and then the goods are delivered by a vessel to the destination port. It is favorable to exporters who have difficulties arranging transportation up to the port of origin.
Generally, it uses multi-modal transport of land and sea.

⦁ Recommended Incoterms for Door-to-Port
When delivering from the origin to a port, the expenses and risks are on the seller. Therefore, the best options are DPU (Delivered at Place), the simplest condition; CIP (Carriage and Insurance Paid To), which allows a seller and a buyer to bear the costs and risks together and the buyer takes charge until the unloading of goods; CPT (Carriage Paid To), which holds a seller responsible for the process up to loading and a buyer for inland transport at the destination; CRF (Cost and Freight) or CIF (Cost, Insurance and Freight), which indicates a buyer is in charge of contracts of transportation and inland transport at the destination, and a seller assumes the safety of goods from the origin to a port.

⦁ Port-to-Port Transport
It is a way of delivering freight from the port of loading to the port of discharge.
The transportation costs of this service are relatively low as cargo-shipping companies don’t cover inland transport in both origin and destination. It is recommended to carriers and it mainly utilizes ocean transport.

⦁ Recommended Incoterms for Port-to-Port
For a seller, CIF (Cost, Insurance and Freight) Incoterm is desirable. The seller is responsible for taking cargo to the destination and the risks are transferred when the goods are loaded on the ship at origin.

⦁ Port-to-Door Transport
It allows the cargo to be delivered from a port to the final destination and the cargo is required to be received at a port. A carrier is in charge of inland transport and completes the loading. It mainly covers inland transport.

⦁ Recommended Incoterms for Port-to-Door
CPT (Carriage Paid To), which requires the goods to arrive at an agreed place chosen by a buyer, or DDP (Delivered Duty Paid), which lets a seller to transport goods to the buyer’s warehouse or a building, would be appropriate.

Through Door-to-Door transport, the cargo is delivered from the warehouse near a seller to the customer’s address. It contributes to elevating consumer satisfaction with convenience and quick delivery.

In the process of the transport, it ensures monitoring of a status of the cargo and safe and on-time delivery. It is utilized in a wide range of areas, such as parcel, cargo and express delivery services.

By using Door-to-Door delivery, the parcel delivery industry can send goods to customers’ doorstep swiftly and with ease. Logistics companies can figure out real-time delivery status through a cargo tracking system and delivery management system. It allows the companies to provide services to customers with more visibility.

Additionally, Door-to-Door transport is widely adopted for industrial cargo like chemical or automotive parts. As safe and on-time delivery is essential for these freight, services from specialized logistics companies are preferred. As such, Door-to-Door delivery helps improve customer satisfaction and competitiveness of companies.

Advantages

Secure Loyal Customers by Shortening Transporting Time: As the cargo is delivered from the origin to the final destination, customers don’t have to deal with extra processes to get the product. It not only promotes customer satisfaction by shortening delivery time but also dramatically cuts down on time from receiving an order to delivery for service providers, fostering loyalty of customers.

Real-time Cargo Tracking and Easy Management: Logistics companies can see the real-time location and delivery status and offer visible information to customers. It ensures safe delivery, lowering risks of damage or loss.

Consumer Convenience: Transporting companies coordinate with agents instead of buyers, allowing customers to save time and costs.

Disadvantages

High Costs for Delivery: Costs are relatively higher than other modes of transport. As each cargo needs to be delivered separately, the distance and time for delivery increases, resulting in a rise in fuel and labor costs. Moreover, areas available for service are limited, so the service might not be applicable to some areas with lower accessibility.

No Guarantee for Delivery Dates: Depending on the process, location of a seller/buyer, or delays, goods might arrive earlier or later than expected

Differ by Transporters: Door-to-Door service relies highly on the expertise and efficiency of carriers. If an issue that is hardly manageable by a shipper occurs, it could cause a delay in the logistics process.

These days, demand for Door-to-Door services has soared due to the booming e-commerce market.

While it is easy to use and convenient, costs are high. Thus, companies should strike a balance by deliberating on the pros and cons to establish optimal logistics strategies that can meet customer demand and business goals.

Door-to-Port is a service transporting freight from the origin to the port of discharge. Some cargo is delivered by road and the rest is sent by vessels.

The general process of the Door-to-Port follows the subsequent procedure: When a shipper requests transportation, a logistics company picks up the cargo and moves it to the port of loading by road (truck, rail, etc.). When the cargo arrives at the port, it passes through unloading and storage processes and it departs to the port of destination by sea. Lastly, the goods are delivered again by road to the final destination.

Thus, the Door-to-Port delivery reduces transportation distance and costs. Also, out-sized cargo can be readily handled by a large vessel. Particularly, it is beneficial to international trade.

For instance, if a domestic company exports goods to China, the company can opt for Door-to-Port transport. It picks up the cargo from the nearby factory to move it to Busan port and transport it with a vessel to Shanghai. When the cargo arrives at the port of Shanghai, it requires inland transport again to reach the final destination.

To conclude, Door-to-Port transport efficiently connects inland and maritime transport, cutting costs and time. In particular, it is appropriate solution for long-haul trade.

Advantages

Clear Liability: As it only covers transportation between origin and a port, it costs relatively less and has clear liability for transportation.

Easy to Handle Materials: It allows easier handling of industrial or construction materials as it can transport a large amount of cargo through vessels.

Low Pressure for Management: Since a service provider addresses pick-up, packaging, and loading at the sending place, pressure for managing the sending address declines.

Disadvantages

Risks for Transportation: Ocean transport might hinder real-time tracking of cargo and delays could happen due to weather conditions or port congestion.

Availability Depending on Accessibility: If port infrastructure and transporting network falls short, Door-to-Port might be inapplicable.

Additional Tasks: A consignee needs to proceed with tasks related to customs clearance, commission or additional transport.

Door-to-Port is widely adopted in exports of finished vehicles of Hyundai Motors or home appliances of Samsung Electronics. With this, companies can save costs and efficiently manage a large sum of cargo.

They, however, need to come up with systemic countermeasures to tackle risks, such as bad weather or port congestions.

Port-to-Port refers to direct transportation between ports and plays a pivotal role in global logistics and trade. Cargo is moved from the port of origin to the port of discharge.

Ports have been recognized as a crucial point of trade while a linkage between port infrastructure and ports is gaining attention. Port-to-Port has become a key solution satisfying the necessity for connecting those.

The process follows: When a shipper delivers a cargo to the port of origin, the cargo is unloaded and stored at a terminal in the port. Then the cargo is transported to the port of discharge by a ship. When the products reach the port of destination, they are delivered to the final destination through inland transportation. In the process, port operation protocols and international maritime regulations are applied.

Advantages

Relatively Lows Transportation Costs: It has relatively low costs and enables the transportation of cargo in a massive amount. Low ocean costs per unit reduce overall logistics expenses, which helps build a stable system for regular transportation schedules and standardized operation protocols.

Freely Select Carriers: Shippers can freely choose a transportation company as Port-to-Port only includes transportation between a port of origin and a port of destination.

Choose Special Options for Ocean Transport: It provides professional options for ocean transport for large amounts of cargo or freight of certain industries (e.g. large project cargo, container cargo, etc.).

Disadvantages

Complex Cost Management: As it only deals with ocean transport, shippers might find it tricky to manage overall logistics costs separately.

Manage schedule and Additional Services By Oneself: Shippers are required to manage Port-to-Port transportation and adjust transportation schedules (inland) by themselves. If the linkage between modes is not smooth, it might bring about some delays. Plus, shippers need to handle additional services like inland transport, packaging, customs clearance, etc.

After all, Port-to-Port is a stable system and is advantageous for large-cargo transportation. On the other hand, in terms of cargo tracking and accessibility, it demonstrates some limitations.

Port-to-Door is a hybrid way of transport combining Port-to-Port and Door-to-Port services. It delivers goods from the port of loading to the final destination.

As the process is relatively simple, it is suitable for shippers who lack experience in logistics and who want a proxy to take care of the complicated process to a port of the destination.

Advantages

Low Responsibility for Transportation: It has low possibility of loss or damage as an expert logistics company is in charge of monitoring cargo from a port, warehouse to the destination.

Efficient Transportation: It offers optimal transportation solutions matching with local situations, enabling efficient inland transportation.

Save Time: Shippers don’t need to plan or adjust processes after the cargo arrives at a port, shortening time and administrative processes.

Disadvantages

Local Limitations: In some regions, Port-to-Door service might be applicable, so customers might have to additionally coordinate with other transportation options.

Inefficient System: Certain countries or regions with poor infrastructure might witness delays or inefficiency in transportation.

Low Flexibility: Shippers might not be able to select or modify transportation as the inland transport after cargo arrives at a port is fully managed by a transportation company.

Port-to-Door is regarded as an alternative to further reduce costs by receiving cargo at a designated port or a terminal, managing customs clearance by a logistics team, and delivering it to the final destination.

It has the lowest costs as it only includes maritime transport from the port of origin to the port of destination, not inland transport nor customs clearance services.

It contains the overall transportation process from the origin to the destination, therefore it is the fastest and easiest method of transportation for customers.

It’s advantageous to exporters because it includes inland transportation from the origin to a port but the delivery after arriving at the port, responsibility lies with importers. Door-to-Port presents better services while minimizing risks of customers.