Incorporating inventory considerations into strategies for choosing between air and ocean transportation methods for international shipping.

As companies expand their operations globally, they must carefully analyze transportation costs and their effects on inventory investment. To avoid merely focusing on freight costs, a comprehensive decision-making methodology is necessary, considering all related expenses. This article presents a modal choice framework that evaluates annual costs and long-term inventory needs to determine the optimal transport mode, including mixed strategies like ocean and air freight. A case study illustrates how a Fortune 100 company found that ocean freight was cost-effective for some products, while air freight was better for others.