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What is Sea Freight? Understanding Ocean Freight for Your Business.

Views: 105     Author: Site Editor     Publish Time: 2022-03-02      Origin: Site

sea-freight

In sea freight, the goods are loaded in containers, the freight forwarder books the space or container with the shipping carriers, the goods are trucked to the ship at the port of departure, and then shipped overseas to the importer at the port of destination. In transportation can be port-to-port, door-to-port, port-to-door or door-to-door and can include truck pickup and/or delivery. This guide details everything about sea freight.


Table of Contents:

What is Sea Freight?

Types of Sea Freight Services

When Should You Ship Full Containers (FCL) and Less than Containers (LCL)?

When Does It Choose Ocean Freight?

How Does Ocean Freight Work?

Benefits vs Disadvantages of Sea Shipping

What are The Major Shipping Carriers?

The Most Common Incoterms of Sea Freight

International Sea Freight Services




What is Sea Freight?

Sea freight is a type of shipping large quantities of goods using carrier ships. It is an important part of cross-border trade and enables people to shipping large quantities of goods between countries. Goods are loaded into containers and then loaded onto ships. A typical cargo ship can carry around 18,000 containers, which means that sea freight is a cost-effective way of transporting large volumes over long distances.


For different types of cargo, there are a number of transport options available. One of the most popular is container transport, technically known as containerisation. With this method, goods are transported using containers with standard dimensions of 20 to 40 feet. (About shipping container, you can browse: The Complete Guide to Shipping Containers)


In addition to sea freight, there are other modes of international shipping, including express, air express and standard air freight. All of these modes of transport involve air freight and are therefore much faster than sea freight. They usually take 1 to 2 weeks. However, they are also much more expensive than sea freight and can only accept smaller shipments.



Types of Sea Freight Services

As mentioned earlier, container shipping is one of the most popular shipping options. This is mainly due to its relative safety and ease of handling.


In container transportation, there are basically two types of transport services available - LCL or FCL. lCL means less than container load, while FCL means full container load. In addition, there are dry bulk shipping. Dry bulk goods are shipped in large amounts and are not package or transported the same way container transport is. Bulk shipping is the transportation of goods in large quantity, usually not packed but loaded directly into a vessel. Such goods are grains, petroleum products, iron ore and more. These type of goods are referred to as bulk cargo. These are unpacked goods loaded onboard a vessel. (About FCL vs LCL, you can browse: FCL vs LCL Shipping: Differences Between & How to Choose)


With FCL shipping basically involves transporting your goods in one or more containers that you use exclusively. Only your cargo will be in the container, ensuring that your cargo is not disturbed until you open the container yourself. This option makes the most sense when you have shipments that can be filled with containers or nearly so.


With LCL shipments, the amount of cargo to be shipped is usually less than the amount needed to fill a container. So instead of having a relatively expensive container of your own, you can share the cost and share the container with shipments belonging to others.



When Should You Ship Full Containers (FCL) and Less than Containers (LCL)?

The obvious answer seems to be that when you have enough stuff to fill a container, you should fill it, otherwise you fill a collocated container. This is not entirely true.

FCL and LCL


From a financial point of view, a container that is 75% or more full is usually cheaper than shipping in LCL (in other words, LCL has a pro-rata surcharge of about 25%). However, there are two other important considerations. Firstly, LCLs take around 1-2 weeks longer to transport than FCLs. This is because the freight forwarder has to work with others to pack your items and unpack your items.


Secondly, because of this extra handling, LCL shipments are more likely to be lost and damaged (although this is very rare). If time and care is important to you, even shipping in half empty containers can sometimes be justified.



When Does It Choose Ocean Freight?

If you're shipping large or bulky shipments, or when reducing shipping costs to save money is critical, you should consider ocean freight. Ocean freight also works well when you have a large number of orders in the same period.


However, if you decide to go by sea, you should generally allow enough time for the shipment to arrive. If you don't have flexible delivery dates, you're better off looking elsewhere. The complexity of the process and the potential for delays can put you in a less than ideal situation.


Overall, ocean freight is an excellent option for international shipping, but only in the right circumstances. It can be a relatively cheap option, but this is often offset by ambiguity in the process.



How Does Ocean Freight Work?

Ocean freight relies heavily on the services of a third party known as a freight forwarder. A freight forwarder is usually a third party individual or company who picks up your goods, properly arranges for them to be loaded on board and transported on board, and ultimately delivered correctly to their final destination. This is because it usually takes a trusted eye and hand that can help collect your goods from the seller, arrange transport and place your goods on board.

The shipping contract is also an important part of the process that you should be aware of. There are a number of standard international shipping terms that govern shipping contracts. These are called 'Incoterms', which is short for International Commercial Terms. It sets out the extent to which the seller will be responsible for the goods during the process and when the buyer will take over responsibility for the goods.



Benefits vs Disadvantages of Sea Shipping

Benefits of Sea Freight

﹒Possibility of carrying a wide variety of cargo, with high availability of routes and vessels

﹒Sea freight rates are low for transporting large quantities at once, over long distances

﹒Most carbon-efficient mode of transport when comparing the fuel consumption to the weight transported per shipment

﹒Shipping by sea or ocean is the safest form of worldwide transport

Possibility of safely transporting dangerous and hazardous goods that are forbidden in other shipping services

﹒Lower maintenance costs compared to rail or road transport


D
isadvantages of Sea Freight

﹒Sea freight transport is slow, only suitable for shipments that are not time-sensitive

﹒Not cost-effective for short-distance shipments

﹒Vulnerable to weather conditions such as excessive rain or dry season where the water level in rivers are too low

﹒Further inland transportation needed to connect the port to the final destination

Tracking of goods transported by ocean freight might be tricky

﹒The biggest danger of the sea freight industry is piracy


Ocean freight is economically superior to other forms of product delivery service, but only if you are looking to transport large quantities or if the destination country is far away. However, even with the option of LCL, courier services and Air Freight may still be better options depending on the product in question.



What are The Major Shipping Carriers?

· MSC

· MAERSK

· CMA CGM

· COSCO SHIPPING

· HAPAG-LIOYD

· EVERGREEN

· ONE

· HMM

· YANG MING

· ZIM

· WAN HAI LINES



The Most Common Incoterms of Sea Freight

﹒FOB (Free on Board): Under the FOB agreement, buyers and sellers share the responsibility of the delivery process. Seller takes obligations to make sure the goods are packaged, labeled appropriately, and loaded correctly ready for shipping. Once the goods have been loaded onboard, the obligations transfer to the buyer.

﹒EXW (Ex Works): An EXW contract places the majority of responsibility on the buyer. The buyer picks up goods at the manufacturer’s and is responsible for the transit of the goods to their final destination.

﹒DDP (Delivered Duty Paid): With DDP, the seller takes the maximum obligations and buyers take minimum obligations. The terms dictate that the seller will be responsible for the costs of shipping, insuring the goods and inland transportation.

WHAT IS INCOTERMS 2020


There is obviously a lot to know about how these Incoterms work and what makes the most sense to you. (About Incoterms 2020, you can browse: What are Incoterms 2020? - International Trade Terms Guides)



Process of Concluding Sea Freight

After determining your shipping terms, the process of completing your sea freight will involve the following stages:


Export Haulage: This is the beginning of the transport journey. At this stage, your goods will be shipped from the seller's warehouse to your forwarder's warehouse.


Export Customs Clearance: Most countries require that exported goods go through customs clearance first. Customs clearance will include providing a detailed declaration of the goods along with supporting documents.


Origin Processing: This phase covers all the activities required to prepare the goods for transport. Goods will be placed in the staging area for inspection and confirmation. After confirmation, the forwarder will issue a receipt for the shipment confirming that they have received the shipment as stated. If the goods are full containers, the goods will be stacked in their containers. In the case of LCL, they are placed in warehouses waiting to be combined with other cargoes in containers bound for the same port of destination. Finally, the container will be trucked to the departure port for loading.


Sea Freight: This is the actual shipping of goods across oceans. The stage to this point can take days or weeks, depending on several factors. The sea freight itself may take 20-60 days, depending on the destination of the goods.


Import Customs Clearance: After the goods arrive at the port of destination, wait for import customs clearance. It also includes filling out the necessary forms, declaring the goods and paying the necessary fees.


Destination Processing: This stage covers all the activities required to confirm the cargo, check the documents including the bill of lading and transport the container to the freight forwarder's warehouse. Here, shipments are opened, inspected, and sorted for inbound transport.


Import Transportation: This is the final stage of the process. At this stage, the cargo will be transported inland by train or truck to your final destination determined by you.


A freight forwarder can be responsible for handling every stage of the process. Understanding the sea freight shipping process is one of the most essential parts of shipping internationally.



International Sea Freight Services

Sea freight is a very cost-effective solution for shipping large quantities of goods that are not time sensitive. Whether you require FCL or LCL shipping, breakbulk shipping, or door to door delivery service, at STU Supply Chain, we can organise effective transport of your goods by sea freight.


STU Supply Chain is one of the leading freight forwarder in China. Providing tailor-made solutions for your specific ocean freight requirements is at the heart of our services and STU Supply Chain offers flexible global ocean freight services. Regardless of the size of your business, our experienced ocean freight team can keep your cargo unimpeded at sea.


Ocean Freight Services - STU Supply Chain

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