DIFFERENT TYPES OF OCEAN FREIGHT

One of the most widely used solutions for sea freight logistics is container shipping, as was previously mentioned. This is mostly because it is very easy to handle and safe. It is very simple to move containers, and it does not stop the goods from being shipped. However, they are most effective when used with particular products, such as dry or prepackaged goods.

Regarding ocean or sea freight services, there are two shipping services: FCL and LCL. FCL, full container load, and LCL, or less than container load, are necessary for efficient sea freight logistics.

FCL shipments entail shipping your products using one or more containers you rent out for personal use. Your shipment will remain undisturbed until you open the container alone because only your belongings will be inside. This is the best option when your goods are large enough to fill a container or almost fill it.

The quantity of goods intended for shipment in LCL shipments is typically less than what would fill a container. Thus, you can share the cost and use the container with other people's belongings rather than having it all to yourself, which can get pricey. However, this option has the drawback that your goods might be more susceptible to damage or mishandling while in transit.

SHIPPING WITH OCEAN FREIGHT

Ocean freight logistics relies on independent freight forwarders. Freight forwarders are outsiders who can pick up, load, and deliver your goods. This is because having reliable eyes and hands is usually required to assist with picking up your goods from the seller, setting up shipping, and getting them onto the ship.

Another crucial aspect of the procedure you should be aware of is the shipping contract. Shipping goods by ocean requires international shipping standards. These are "incoterms." international commercial terms. It specifies when the buyer will assume responsibility for the shipment and how far along the seller will be held accountable for the items.

Among the most often used incoterms are:

❖    FOB (Free on Board): Buyers and sellers agree to split delivery costs. Before delivery, the seller must pack, label, and load the products. Buyers take responsibility after loading goods onto ships.

❖    EXW: The buyer is mostly responsible in an EXW agreement. After receiving the goods from the manufacturer, the buyer must transport them.

❖    Buyers accept minimum obligations and sellers’ maximum obligations in Delivery Duty Paid (DDP). The seller will pay for inland transportation, insurance, and shipping.

After selecting shipping terms, completion of ocean freight requires the following steps:

1. Export haulage: Shipping begins here. Your items will move from the seller's warehouse to your freight forwarders.

2. Export customs clearance: Most countries require export clearance. Providing a thorough cargo declaration and the necessary supporting documentation is part of the clearance process.

3. Origin handling: Everything that needs to be done to get your products ready for shipping is covered in this step. The cargo will be placed in a staging area to be examined and verified. The freight forwarder will provide a cargo receipt at the time of confirmation, verifying that they have received the items as stated.

The FCL container will hold stacked items. LCL items will be stored in the warehouse until they are combined and shipped to the same port. Containers are loaded onto ships by trucks at the port of departure.

4. Ocean freight: The actual shipping of goods across the ocean falls under this category. The final steps may take days or weeks in some cases. Ocean freight can take 20–60 days, depending on the destination. As shipments cross international waters, ocean freight tracking systems provide real-time updates. Sea freight tracking tools, which are available online, provide clients with information and comfort about the whereabouts of their shipments.

5. Import customs clearance: Products must wait for import clearance at their destination. In addition, cargo must be declared, paperwork completed, and fees paid.

6. Destination handling: This step includes verifying items, inspecting paperwork, including the bill of lading, and moving the container to the freight forwarders warehouse. Before import, products are opened, inspected, and sorted.

7. Import haulage: This is the final step in the process. At this point, the items will be driven or transported by train inland to your designated location.

Holding the freight forwarder accountable for managing each procedure step is possible. Alternatively, you might cut costs by making different arrangements for specific phases.

WHAT DETERMINES OCEAN FREIGHT RATES?

Ocean freight rates usually depend on weight and space. This sea freight logistics aspect is crucial when calculating international shipping costs. For example, ocean freight costs approximately 50 cents per kilogram (kg) square. The freight rate may also cover the following additional costs:

●      Insurance

●      Security fee for customs,

●      Container freight terminal (exclusively for LCL consolidation),

●      Transport to and from ports and warehouses,

●      Routing expenses,

●      brokerage for customs,

●      and surcharge on fuel.

Furthermore, ocean freight charges are not fixed. Many variables could cause the price to drop even further or increase dramatically. Several of these elements consist of:

·        Fuel costs: Fuel costs can fluctuate, which is essential for shipping goods by sea. You should anticipate higher rates in response to price increases.

·        Exchange rates: Considering how long a single trip can take, even small changes in exchange rates can cause shipping lines to suffer a significant loss.

·        Supply and demand: People frequently take time off from work during festive holidays, which impacts the shipping sector. This means there is typically a spike in demand before joyous occasions like Chinese New Year, which may result in higher freight rates.

·        Package size: Large packages will require much more labor and be substantially more expensive.

·        The type of vessel required: shipping containers are comparatively inexpensive because they are efficient, quick, and simple. Other ships might be more expensive, such as bulk carriers for unpackaged dry goods or tankers for liquid cargo.

OCEAN FREIGHT BENEFITS AND DRAWBACKS?

Ocean freight may be common, but it also has drawbacks, as you have already discovered. You can anticipate the following benefits from ocean freight:

·        Greater shipping capacity: For large shipments, sea freight is ideal. Only lighter items not being shipped in bulk can be shipped using alternative methods.

·        Lower costs: At just 50 cents per kg, ocean freight is generally far less expensive than other options. This contrasts express air freight, which costs $6 per kg, and standard air freight, which costs approximately $4 per kg.

·        Less restrictions: There are a few limitations on the kinds of goods you can ship by air freight. For example, you cannot ship biochemical goods like medicines or flammable goods like perfumes via air freight. Shipping by sea is subject to fewer restrictions. Ocean freight emits less carbon than air freight. New IMO regulations will reduce these emissions.

Despite the advantages, here are some drawbacks to be aware of:

·        Extended shipping duration: Ocean freight moves much slower than air freight, typically five to six times faster. For cargo, shipping from the US to China by sea takes 30–40 days, while air shipping takes a week or three.

●      Shipping ambiguity: Weather, customs delays, and port congestion are more likely to affect ocean shipments. Delivery may take days or weeks longer.

●      Less protection: Ocean freight products are more susceptible to damage due to long transit times.

●      Less reliable: Goods are more likely to be handled and recovered when shipped by sea because of the numerous moving parts.

WHEN IS IT APPROPRIATE TO SELECT OCEAN FREIGHT?

If you are transporting big or bulky items or if cutting your shipping expenses to save money is essential, consider using ocean freight. Ocean freight is also effective when there are a large number of orders to be shipped at the same time. However, if you want to use ocean freight, you should allow ample time for the items to reach their destination.

You would be better off exploring elsewhere if your delivery dates are not flexible. If not, you can be in a less-than-ideal scenario due to the process's complexity and possible delays. Only in certain situations is ocean freight a good international shipping choice. It can be cheap, but the process typically needs to be clarified.

Consider Chenmao for your next shipment!

Our team handles inbound and outbound ocean freight. We have the experience to handle all your international shipping needs, from port to port or door to door. We maintain strong relationships with leading carriers to secure your best rates. You can easily book cargo, view rates, and witness convenience at every process step.