Most Americans are familiar with the globalized economy. Clothes from Asia, food from South America, cars from Europe. Head into almost any store and you will find stickers that say “Made in China” or something similar. However, most people rarely consider the massive logistics challenge that makes all of this possible. It is understood that these international goods travel by sea, road, rail, or even air, but the complexities of globalized trade are immense.
Freight Relay is the transportation system that allows this system to work. As the name suggests, freight is moved around by multiple different carriers in a coordinated approach, like a relay race. Instead of a single company or carrier delivering goods from start to finish, it is handed off constantly, sometimes dozens of times. Freight relay divides journeys into shorter segments, with carriers switching at transportation hubs along the route. Despite the added complexity, this method significantly increases efficiency and speed. It also ensures transportation professionals can stay in a zone of operation, not necessarily moving thousands of miles away from home when they can pass items along the relay.
For example, imagine a company in Seattle, Washington manufactures a product, and that product is shipped to a retailer in Miami, Florida. The product will be sent first to a warehouse that organizes and stores dozens of products, including those from other companies and manufacturers. Then, the product is loaded onto a long-haul truck, where it is driven for several hundred miles. However, strict regulations limit the number of hours a trucker can operate the vehicle, which would add significant time to the delivery. Instead, freight is continuously passed between different trucks, ensuring that the cargo is almost constantly kept in motion – and enabling truck drivers often to sleep in their own beds. Using this method, freight can be moved across the entire country in just a couple days. This method of constant motion is particularly important for perishable goods and companies that advertise fast delivery. Amazon is a master of freight relay, relying on a massive transportation fleet to deliver packages in astonishing time.
The example used above is for a domestic situation, but the same principles apply for international delivery, only with more complexity. Imagine that to manufacture the example goods in Seattle, the company requires precursor components from Asia and raw materials from Africa. Each component has its own supply chain that passes hands many times. A material might travel by truck, train, and cargo ship multiple times just to get to the place where it will be processed, before repeating the process once again. These supply chains are highly organized and carefully coordinated to ensure that goods arrive exactly when they are expected to. A slightly delayed delivery of just one component can completely disrupt the production process. When the Suez Canal was blocked in 2021, the total estimated economic cost was $10 billion each day, and it disrupted trade for months.
The efficiency of freight relay transport has enabled extremely complicated production processes under a free market. American automobile manufacturers are an excellent example of this production technique. The F-150 Truck may be assembled in the U.S., but more than three quarters of its components are manufactured elsewhere. North American car manufacturers might have an engine block cast in Mexico, machined in the United States, and assembled in Canada.
The blocking of the Suez Canal was a reminder that our increased efficiency has come at a cost. We have become so good at logistics that precision has become expected, leaving us unprepared for disruption. Geopolitical tensions are once again rising across the world, necessitating increased supply chain security and resiliency. A poorly-positioned international incident could trigger an economic crisis. This does not mean that nations should return to isolationist policy, but it does highlight the importance of diplomacy and being prepared for every outcome.
Freight relay, and more broadly supply chain logistics, are crucially important for our modern world. It is critical that we protect and expand the transportation infrastructure that enables this organizational marvel. In fact, more challenges arise the deeper you look, including number of trucks on the road, fleet fueling needs, parking spaces, driver shortages, and public policy frameworks. Freight relay is a solution to many of these, and may require new innovation or policy reform to improve safe, efficient, and resilient operations.
No matter the case, the next time you buy a car, order a package, or even get fresh groceries, think about the roads, railways, and harbors that made it happen.
Written by Owen Rogers, Policy Fellow
The Alliance for Innovation and Infrastructure (Aii) is an independent, national research and educational organization working to advance innovation across industry and public policy. The only nationwide public policy think tank dedicated to infrastructure, Aii explores the intersection of economics, law, and public policy in the areas of climate, damage prevention, eminent domain, energy, infrastructure, innovation, technology, and transportation.