International Ocean Freight: Everything You Need to Know
Shipping via ocean freight accounts for 90% of all international shipping. Ocean shipping is the most economical way to transport. A large ocean ship can transport extremely heavy cargo. While it's a slow process to move your merchandise across the supply chain and even though the operations of marine terminals aren't always easy but it does have a huge advantage over air freight in that shipping via ocean is much less expensive than air transport (around five times more affordable). Although it isn't suitable for every company however, ocean shipping can be a great option for shipping bulk goods at a reasonable cost. Although it's among the most simple shipping methods however, shippers need to consider certain important aspects. Examine how ocean freight shipping functions and the most important factors. We've observed both the vital role that ocean freight plays for the economy of the globe and also how it plays out when a break in the supply chain happens. As consumers of the millions of products that are shipped via sea, the majority of us have probably experienced delays with shipping ocean freight. And while the pandemic affected all modes of transportation, the ripples of its effects on ocean freight--port capacity, including container availability--continue today. In light of this what information do exporters looking to transport their goods using ocean freight have to be aware of? A little information on the fundamental notions of ocean freight for exporters: What types of goods can be transported via the ocean? What is the cost? What are the best usage instances for this kind of transport?
What is considered to be ocean freight refers to goods and products (cargo) that are transported via ocean vessels, usually in huge quantities. Ocean freight transport starts at a designated port terminal which is where the company that offers ocean freight you've selected will receive the cargo. The cargo is then prepared and transferred to the vessel. Ocean freight is transported in 20-foot containers, also known as equivalent units of twenty-foot (TEUs). Containers that are 20- or 40-foot are common; further, ISOtainers (or International Organization for Standardization tank containers) are containers that transport bulk items. Alongside containers, special cargo vessels transport bulk commodities like coal and petroleum.
The time taken to transport goods by ocean freight is contingent on the location you are in along with the final destination for your merchandise. Although it's often one of the more slow modes of transport however, the average time for all-inclusive shipping of goods from Southwest Asia to somewhere in the United States is approximately 45 days. This is a 15-20-day ocean portion and a non-value added time when the containers are at their starting location waiting to be loaded, then at their destination , waiting to clear customs and finally, they are out of port waiting to embark on their journey to land. The vast majority of delays in ocean freight aren't in the ocean, but the yards at ports have been overloaded, and, as a result the ocean lines are operating slower, which means they don't have to sit at ports for as long.
Though almost everything can be transported by ocean, three aspects--size cost, and speed--will decide the items that must be transported using this method. Here are some of the most commonly used goods that are shipped via oceanshipping:
Container cargo - everything from clothing and toys to electronics and furniture.
Bulk liquid items like crude oil and fuel.
Break bulk--goods that are transported in bags, crates drums, barrels or boxes without the need for containers.
Dry bulk , raw material and other materials.
Roll on/roll off of goods such as vehicles and machinery.
As opposed to the air transport, ocean freight has less restrictions on what items can be placed onto an ocean liner. Rather the issue is what should you consider shipping through ocean freight? Although it is less frequent than air transport, there's products that are too big or heavy to carry by ocean vessels. Furthermore, certain dangerous, flammable and hazardous goods are not permitted to be shipped as ocean freight. Ocean liner companies have their own rules about what they can and cannot not allow.
A freight ship that is shipped to the ocean can travel via two routes, either using the Full Container Load (FCL) and less than Container Load (LCL). Shipping costs for either method varies, however shipping FCL generally results in significant savings when compared to LCL.
FCL shipping refers to huge cargo loads that could fill 20 or 40' shipping containers. There is no consolidation of the shipment. The goods are packed and then sealed in the factory. Unloading occurs at the warehouse that will be the final destination. If they can Shippers should choose FCL instead of LCL since it comes with important advantages. The loading and unloading process isn't shared, which can speed up transit times. Containers are sealed, so there's less handling leading to a lower risk of damaged products. FCL is more affordable in terms of cost per container than LCL since you pay a flat fee per container. If your inventory isn't sufficient items to fill a container think about a different method.
LCL ocean shipments aren't enough to fill a 20 or 40 shipping container. Shipping services can offer consolidation options for exporters and importers that are shipping goods in smaller amounts. There are many benefits for LCL shipping. The only cost you pay is the quantity of products that you're shipping instead of per container. If you ship fewer items more frequently, you won't require as much warehouse space (which is costly). In busy times it is often easier to locate LCL space. The negatives that come with LCL as well as ocean transportation are important. LCL shipping costs are more costly. It requires more processing and handling than FCL increase the risk of your items being damaged. LCL shipment need to be loaded and unloaded from multiple containers, thereby increasing the time of transit.
It isn't easy the shipping industry to choose which option to pick. In general, if you are able to fill 75 percent or more of a containers for shipping, FCL costs less than LCL. Anything that is less than 75% filled is likely to be more expensive to ship via LCL shipping. However, it is important to think about how long it will take to arrive at its final destination. LCL shipping can be as much as two weeks more slow than FCL. Also, your goods are more likely to get damaged during LCL shipping. Although LCL is a fantastic alternative to International shipping, you'll find it advantageous to utilize FCL when you are able to.
There are several steps in the process of shipping ocean freight. The first step occurs when the buyer and seller accept the terms of sale. They need to decide on an Incoterm that governs the manner in which the transaction will take place. This is how control and transfer of risk happens and who is responsible for the shipping process and the costs. Each item must be identified and packed to comply with the requirements of transportation and shipping.
Next step involves to negotiate shipping costs and booking the freight shipping. It is generally advantageous to engage an agent for shipping or freight forwarding company to help with this part. They have the experience, know-how, experience, and contacts that will make sure the process goes smoothly.
After the goods have arrived at the port prior to their departure, they'll be prepared for transport. Based on the type of cargo, FCL or LCL the process for loading is different. The shipping line has to issue and the bill of lading following the cargo is loaded. It is a proof of title that serves as legal proof of the buyer's as well as the seller's agreement. The information in the document must be correct.
Before the ship sails the cargo must go through customs, and then processing within the port of the origin. Once the cargo has reached the destination port they have to go through customs clearance prior to receiving legal entry into the country. Taxes, tariffs, duties and other charges have to be covered. Also, a freight forwarding company or customs broker could assist in this regard.
The final part of the journey is moving the merchandise through the port and to the storage or warehouse space used by the buyer. It can be accomplished via air, road, or train transportation. The truck freight option is the most popular at this point.
FCL LCL and FCL LCL freight rates differ when it comes to international commerce. Both are determined by specific factors that include fuel prices and exchange rates for currencies and the time of year. capacity and the specific shipping lines.
FCL shipping is made as a flat rate for the entire unit. If the container is full or half filled and half full, the cost remains the same.
LCL Freight Rates
LCL shipping is charged according to volume, not weight. For bulky items that weigh a lot, it could be a factor in the cost. Due to the additional handling as well as the processing and paperwork required, it's higher priced than FCL.
In addition to the freight costs Other factors influence the cost of ocean freight shipping:
GRIs (General Rate Increases)
Spot prices (usually provided with notice)
Holiday related delays
Price spikes during the season
Cumbersome items
Costs of Warehousing
Costs of trucking
Insurance
Accessorial surcharges
Expertise Plays a Key Role: International freight shipping can be a complex procedure that requires strict rules and a large amount of paperwork. Inexperience and knowledge of the field could result in costly errors. If you're just beginning to explore global shipping offer your self peace of mind by seeking the advice of a professional freight forwarder or customs broker. For those who need assistance in international trade, contact GENERIC TRANSPORT and LOGISTICS SOLUTIONS, an industry-leading international shipping company, for assistance by calling (403) 452-7680.