There is good news for the United States as American companies continue to dominate in foreign markets. While sales may be down from some former large players, other companies are stepping in to fill the gap and relying more heavily than ever on cost-effective international shipping methods.
According to a recent report, small- to medium-sized businesses are taking a larger share of the export market as American consumers still spend sluggishly. Looking at sheer tonnage or gross numbers, the larger companies still appear to be dominating the shipping market, but it is a mistake to look only at gross receipts when considering the role of various segments of industry in promoting American exports.
Small Companies, Small Cities
Despite the struggle in the economy, or perhaps even because of it, smaller companies have proven to be more effective and recession-resistant in some cases than their larger counterparts. One thing that allows small companies to remain competitive is the fact that they are often located in relatively small cities where property is cheaper and taxes are more affordable than in New York, Chicago or Los Angeles.
However, the fact that many of these companies are located in relatively remote areas also means that shipping goods effectively and affordably becomes of paramount importance. E-commerce has allowed these companies to take orders from all over the world, so shipping to all sorts of locations has become a big concern.
Airport, Ocean and Rail Shipping Work Together
Small companies are taking advantage of the multi-modal shipping infrastructure that allows them to move goods to both domestic and foreign markets. Regional airports, for example, have become better equipped at rapidly moving goods from one spot to another, and trucking is of vital importance in moving containers from small factories to large rail yards or ports.
It is important to remember that manufacturing may be the key to driving a recovering economy and providing jobs to all who need them. However, without international and domestic shipping capabilities, the manufacturing sector may quickly find that it cannot support this type of growth. New technology has enabled American companies to narrow production costs to within five points of countries like China, but without proper shipping capabilities, how much these companies can produce is not important. In order to get goods to market, manufacturers must rely on well-developed shipping routes that can cut the cost of transport enough to make the competitive.
Worldwide Shipping Makes Small Manufacturers Successful
In order to remain viable in a competitive environment, small manufacturers must be given the opportunity to ship worldwide in a fast and cost-effective manner. BGI Worldwide Logistics can help both small and large companies ship their goods quickly and at a low cost.
BGI Worldwide Logistics can provide complete multimodal shipping services, including door-to-door transport. BGI can provide:
Trucking services. Our extensive line of truck transport options makes it possible to pick up goods at your factory or warehouse and transport them quickly to a transportation hub or to another nearby location.
Air cargo. We offer complete air cargo services anywhere in the world through major airport locations.
Ocean container shipping. BGI Worldwide offers overseas shipping services through a network of providers that can provide cost-effective container shipping no matter where in the world you are sending your goods.
Rail service. Sometimes rail service is the most economical way to ship throughout North America, including Canada and Mexico. If you have domestic or international shipments that can be handled by rail, BGI Worldwide can help you get your goods from your company to your customers.
Contact BGI Worldwide Logistics today for more information.
The second-busiest port in the United States is located in Long Beach, and now students will have a chance to learn more about this important shipping location with a new educational initiative sponsored by the Long Beach Board of Harbor Commissioners, according to a recent report.
Educational Program Introduces Long Beach Students to Shipping
The $150,000 grant for the new education outreach plan will pay for a new website that combines curriculum, internships, videos and scholarships for students who want to attend the new Virtual Port High School to study trade careers.
The funds will be used to pay for the new school as well as a maritime career fair. There will also be a program for teachers planned for summer 2015 to provide education on the Long Beach port that they can carry back to their classrooms.
Educators have been strongly supportive of the initiative, which includes materials to be used in fourth-grade lessons on this history of California, geography lessons, an adopt-a ship program and job shadowing for students.
Harbor leaders have also approved a $4.54 million fund to replace Fireboat Station No. 15.
Long Beach Port—Statistics
The Port of Long Beach, nicknamed "The Green Port," has an annual tonnage of shipment that makes it the second-busiest port in the nation. For the years 2006 to 2011, Long Beach Port shipped the following amounts:
Volume in Metric Tons
According to Long Beach Port's statistics, the following facts outline the volume of the port's activities:
- Loaded containers at the Long Beach Port account for about one-third of all containers moving through California ports and about a quarter of all those moving through West Coast ports
- Nearly one out of every five containers moving through a United States port moves through Long Beach
- The Long Beach Port consists of 3,200 acres of land, 10 piers, 80 berths and 66 post-Panamax gantry cranes
- The 22 shipping terminals including 5 break bulk terminals for automobiles, steel, iron ore and lumber; 6 bulk terminals for petroleum coke, gypsum, cement and salt; 6 container terminals and 5 liquid bulk terminals for petroleum
- Long Beach is the 18th-busiest container cargo port in the world
- If combined with the nearby Port of Los Angeles, the ports would constitute the eight-busiest port in the world by container volume
- The Port of Long Beach supplies 30,000 jobs, about one out of every eight jobs in Long Beach
- The Port of Long Beach provides employment for about 316,000 or one in 22 people in southern California
- There are approximately 1.4 million jobs throughout the United States that are directly related to Long Beach Port trade
- The United States receives $5 billion per year in U.S. Customs revenues from Long Beach and Los Angeles ports
- The port generates about $4.9 billion per year in local, state and federal taxes
- The port handles goods that account for at least $47 billion in direct and indirect sales yearly
- The port generates nearly $14.5 billion in annual trade-related wages
- More than 90 percent of all shipments through the port are related to East Asian trade
- The port deals with trade from China, Japan, Hong Kong, South Korea, Taiwan and Vietnam as well as Iraq, Ecuador, Indonesia and Australia
- The top imports seen at the port are crude oil, electronics, furniture, clothing and plastic goods
- The top exports seen at the port are petroleum bulk and coke, chemicals, food and waste paper
BGI Worldwide Shipping is proud to work closely with the Port of Long Beach to move our customer's goods throughout the world.
The shipping industry experiences ebbs and flows in traffic, but what the government does or does not do can have a direct impact on the level of increase or decrease in shipping revenues. Three years ago, President Obama's administration rolled out a new initiative to reignite the shipping industry. Known as the "National Export Initiative," this policy made it a top priority to improve conditions for the private sector in the realm of exports. By improving export levels, shipping companies benefit as well as private sector businesses that buy and sell goods overseas.
What Is The National Export Initiative?
The National Export Initiative was designed to remove trade barriers abroad so that American companies could once again freely trade around the globe as well as enter new markets. The policy allows the government to offer financing and promote American exports abroad. This support directly impacts shipping companies by increasing the level at which businesses are requesting cargo shipping both abroad and domestically.
The effort seems to be paying off. American companies are selling more goods and services abroad since the implementation of the policy. The translates into more business for shipping companies that handle ocean and air transport as well as more domestic shipping to handle the influx of new goods coming into the country. While the country still falls short of the President's goal of doubling exports by the end of 2014, the numbers are inspiring for those in the shipping industry. For the first quarter of 2013, U.S. exports totaled nearly $555 billion, the highest quarterly total ever recorded.
Exports have been steadily rising over the past decade, according to the Office of Trade and Industry Information. For the years 2005 to 2013, the total annual exports from the United States to all countries are as follows:
Some experts credit the North American Free Trade Agreement with the rise in exports. Southern California has, in particular, enjoyed the record level of exports due to agricultural products. The travel and tourism sectors as well as the motor vehicle industry are also showing signs of improvement in the export market. The high level of export has spurred trade and growth and may be instrumental in helping the continued economic recovery of the country. No matter which industries are currently benefiting from the increase in exports, however, shipping companies are ultimately seeing more demand for cargo transportation of all types.
It may be too soon to tell if the impact of the National Export Initiative will continue to be positive but for now, shipping company owners are happy for the increase in export business.
Civil Penalties in Shipping Cases Can Be Costly
The FMC is an independent federal agency that is tasked with regulating international ocean transport for companies that import or export goods from the United States. The FMC is tasked with protecting the public from unfair or deceptive practices as well as insuring a fair and efficient ocean transportation system. To this end, the FMC regularly inspects shipping companies to ensure that they are in compliance with the laws and regulations regarding maritime trade.
The FMC recently assessed more than $350,000 in penalties against four companies as the result of an investigation that spanned ports in Los Angeles and Washington, DC. The four companies included one vessel-operating common carrier and three Non-vessel Operation Common Carriers (NVOCCs). These penalties were the results of settlements on the part of the companies, who still refused to admit that they had violated the Shipping Act or any regulations of the FMC.
The four companies were accused of violations of Section 10(a)(1) of the Shipping Act. The FMC believed that the companies violated various service contracts by shipping at less than applicable rates. This means that the companies were attempting to unfairly undercut other shipping firms by deliberately lowering their rates to non-competitive levels. Once a company does this and runs other shipping firms out of business, it often raises the rates to much higher levels. Further, companies must often utilize very inexpensive labor, often through illegal means, in order to offer these types of shipping costs, or must make promises they cannot fulfill such as rapid delivery that cannot be completed in the agreed-upon time frame.
What Should I Look For In A Transport Company?
While everyone wants to get a good price on shipping, there are things to consider beyond the cost of services. If you are looking for a company to send your products domestically or internationally, you also want to ensure that your freight will be handled safely, that all customs and shipping regulations will be observed and that the shipments will arrive on schedule.
BGI Worldwide Logistics can offer you the very safest and best shipping for all your cargo. We not only handle your goods safely but we also ensure that all shipping regulations and requirements will be met for both domestic and international cargo.
BGI Worldwide Logistics offers:
Domestic shipping via truck, including Full truckload, Less-Than-Truckload(LTL), rail service, and air or ocean.
International shipping for both air and ocean import and export.
Combined shipping with door-to-door service to and from anywhere in the world.
Contact BGI Worldwide Logistics today to find out how we can help you with all your shipping needs.
Long before cities or burgeoning populations, the area of the port of Long Beach is thought to have been populated by the Tongva Indian tribe. Their name means, “the people of the earth”. When it came to beautiful landscape, this area boasts miles of stunning coastline. For this reason, it was a desirable location to later inhabitants. The first recorded owner was Manuel Nieto, a Spanish soldier; he received a Spanish land grant from the King of Spain in 1784. The part of the land grant where the port now stands was mudflats at the mouth of the Los Angeles River. Over time, the land grant was divided and sold into smaller parcels, often owned by land speculators and investors. In 1897 the city of Long Beach was incorporated. As more and more people came to the new city, it flourished. Charles H. Windham purchased 800 acres of the mudflats at the western edge of the city of Long Beach. He founded the Los Angeles Dock and Terminal Company with the intent to build a commercial harbor on the coastal land. The Port of Long Beach was officially dedicated on June 24, 1911, including a parade from Pine Avenue and Ocean Boulevard to the newly constructed Pier 1.
With the 1920s the port saw the construction of a breakwater and new piers. In 1924 the first fully refrigerated ship came to port. It was the Japanese ship, Chichubu Maru. In the 1930s rail lines and transit sheds made the storing and transporting of cargo to the port much easier. Before the current concept of containerization, goods were stored in dockside warehouses for either local distribution or export overseas. These transit sheds were massive in size, storing all the goods which passed through the port. Although there doesn’t seem to have been much damage done to the port, in 1933, a 6.25 earthquake occurred. The town of Long Beach was reduced to rubble, buildings and roads collapsed. Commerce would have been slowed, but not for long. In 1935 Ford Motor Company built a Ford Assembly plant right at water’s edge. The newly assembled cars would have been immediately accessible for transport anywhere in the world from this location. Cars were assembled there from 1932 to 1959. The plant building stood until 1990. Oil was discovered in and around Long Beach in 1921. It was discovered under the port, in the late 1930s. Although this discovery meant new construction and revenue, it also brought challenges and hazards. Fires were not uncommon events as oil derricks began to dot the landscape.
The strategic location of the port of Long Beach did not go without notice from the United States government as the 1940s dawned. The government purchased 214 acres of land in the young port. On February 9, 1941, the Secretary of the Navy established the US Naval Dry Docks. The name later became the Long Beach Naval Shipyard in March of 1948. During World War II, the shipyard provided routine and battle damage repairs to tankers, cargo ships, troop transports, destroyers and cruisers. Over 16,000 civilian employees worked there at the peak of employment in August 1948. The shipyard was equipped and had skilled workers to perform all overhaul and repair of non-nuclear surface ships. In addition, Dry Dock 1 was designated as the west coast nuclear powered aircraft carrier emergency dry dock. In 1950, the shipyard was placed on inactive status until the outbreak of the Korean War. Over the years, the shipyard worked on several support or scientific projects. They included work on Polaris, Poseidon and Sealab. The order to close the naval shipyard came in 1995. The closure was completed by 1998, as the Navy transferred the 500-acre complex to the Port for redevelopment. The China Ocean Shipping Company wanted to lease port space from the city. They offered to lease the land for $14.5 million per year. After a great deal of conflict and controversy, the lease fell through. A new cargo terminal was constructed by the Long Beach Harbor Department and leased to Hanjin Shipping Company from South Korea. They continue to be the terminal’s primary customer and major partner at the port.
If you had been at the Port of Long Beach at the end of 1948, you would have seen the largest floating crane in the world. It was nicknamed, “Herman the German”, because it had been seized from Nazi Germany at the end of World War II. Built in 1941 in Bremerhaven, Germany, at an estimated cost of $3.5 million, this is one of possibly four that had been built. They were used by Germany in the Baltic Sea, German North Sea and ports in Denmark. Twenty-three men were needed to man each crane. The allies had targeted these cranes for bombing, and once, one entire 200 ton pendulum was demolished. One crane was sunk in Hamburg; the other three were assigned to the allies, after the war. The British attempted to move their crane across the English Channel and lost it when it capsized and sank during a storm. The Russians moved their partially completed crane overland to Danzig. The current whereabouts of this crane are unknown. The crane destined for Long Beach Naval Shipyard was dismantled and trans-shipped by boat to Long Beach. The shipment started from the Atlantic in August 1946 and going by way of the Panama Canal, arrived three months later. At the Panama Canal, the pontoon fenders had to be removed to get through the canal. Crane reconstruction cost $350,000, and needed the assistance of two 56 ton cranes and a Navy crane-ship to reassemble it. Although the work was completed by January 1948, the crane was tested extensively and not put in operation until December. The crane was so massive, it lifted other cranes that were used for cargo loading and unloading. This was the crane that lifted the “Spruce Goose”, from its hangar in the 1980s. After the Naval Shipyard was closed in 1997, the crane was moved to Panama. It is still in service at the Panama Canal and is known as, “la Titan”.
The Port of Long Beach reached the modern age of containerization with the docking of the ship Elizabethport. The use of standardized shipping containers made it possible to save time and money as goods were loaded and unloaded on various vessels and modes of transportation. This new revolution in the shipping world started on the East Coast in 1956, and arrived here with the ELizabethport in 1962. A decade later, in 1972, an 85-acre car terminal was opened to accommodate the increasing amount of auto imports at the port. Also in the 1980s, the Port of Long Beach became the first Southern California port facility to use on-dock rail for cargo trains.
The 1990s saw vast progress as the Hanjin Shipping Company started using vessels carrying 4,000 TEUs of cargo. These vessels were too large to get through the Panama Canal and they have continued to build even larger cargo ships. For the next six years, 1995-2001, the Port of Long Beach became the No. 1 container port in the United States. In 1997 construction began on the Alameda Corridor. This is a 20-mile rail expressway that connects the ports of Los Angeles and Long Beach to transcontinental rail yards near downtown Los Angeles. This reduces traffic congestion by not disrupting traffic on the highways. The Alameda Corridor opened in 2002. In 2003, the Port of Long Beach was the maiden call of the 8,000-TEU container ship OOCL, thereby opening the port to the new era of mega ships that continues today.
Today, the Port of Long Beach is second only to the Port of Los Angeles in being the busiest container port in the USA. It serves as a major gateway to Asian trade in the US. East Asian trade accounts for more than 90% of the shipments through the Port. The Port fills 3,200 acres of land with twenty-five miles of waterfront and handles cargo valued at $155 billion. Cargo is carried in over 6 million 20-foot container units. There are over 5,000 vessel calls. The Port’s loaded containers account for nearly 1 in 5 of all containers moving through US ports. Throughout Southern California, 316,000 jobs are created by port related business.
We, at BGI, are proud to utilize the Port of Long Beach in our business. Just as the Port has grown, so has our company. We now ship cargo all over the world in containers on ships that were unimaginable a few decades ago. It has been gratifying for us to see the development of the Port over the years. Our knowledge of the shipping industry and expertise in logistics has been used to benefit our clients for decades. Our success is measured by the growth of our satisfied customers.
The following facts are from the Port of Long Beach website:
Each year, the Port handles:
- More than 6 million 20-foot container units (TEUs)
- Cargo valued at $155 billion
- 75 million metric tons of cargo
The Port's loaded containers account for:
- 1/3 moving through all California ports
- 1/4 moving through all West Coast ports
- nearly 1 in 5 moving through all U.S. ports
The Port comprises:
- 66 post-Panamax gantry cranes
- 5 break bulk (automobiles, lumber, steel, iron ore)
- 6 bulk (petroleum coke, salt, gypsum, cement)
- 5 liquid bulk (petroleum)
- Long Beach is the second busiest port in the United States
- Long Beach is the 18th busiest container cargo port in the world
- If combined, the ports of Long Beach and Los Angeles would be the world's eighth-busiest port complex by container volume, after Shanghai, Singapore, Hong Kong, Shenzhen (China), Busan (S. Korea), Ningbo (China) and Guangzhou (China).
- 30,000 jobs (about one in eight) in Long Beach
- 316,000 jobs (or one in 22) in the five-county Southern California region
- 1.4 million jobs throughout the U.S. are related to Long Beach-generated trade
Regional economic impacts
- More than $5 billion a year in U.S. Customs revenues from the Long Beach/Los Angeles ports
- About $4.9 billion a year in local, state and general federal taxes from Port-related trade
- More than $47 billion in direct and indirect business sales yearly
- Nearly $14.5 billion in annual trade-related wages
For a pictorial history of the Port of Long Beach, see the Port of Long Beach Centennial Celebration web site: www.polb100.com
Nine years ago we had the opportunity of attending the
maiden voyage of what was then the largest ocean container ship in the world.
It was the CMA CGM Hugo. This ship could carry 8200 - 20’ containers (TEU’s), and
was 1,096 feet long. This vessel is still in use today and is in the Indian
Ocean headed for port by the end of October. It was hard to imagine then that
any ship could be bigger or carry more cargo. Just as BGI Worldwide Logistics
has grown these past nine years, so has our capacity for doing business
internationally. Our ability to transport your freight in less time with more
efficiency and less cost has steadily continued as we have become a leader in
worldwide transport and logistics. At any given time today there are hundreds
of cargo vessels traveling around the world delivering international freight. At
BGI we have remained a leader in our industry because we utilize the most
current developments in ocean freight shipping. BGI uses the advancements in shipping
and technology to track and deliver your cargo when and where you want and need
it in the world. Transit times have been reduced to previously unheard of
lengths. It is also possible to transport previously unthinkable volumes of
cargo with the newest Maersk ship, Mc-Kinney Moller.
This behemoth cargo ship has now become the largest in
the world and was launched this year. It was built in South Korea for Maersk of
Denmark, one of the world’s biggest container shipping companies. This mega ship
has a length of four football fields at 1,309 feet long and cost $185 million
to build. It is so wide that it cannot fit through the Panama Canal. But what
it can do is carry cargo, lots of it! This ship has the capacity to transport
18,270 TEU. This is the first of twenty“Triple E” vessels to be built for
Maersk. They are called Triple E because of their design focus on the
“economies of scale, energy efficiency and environmental improvements”. These
new ships will consume about 35% less fuel per twenty foot container than other
existing cargo ships, which will save on costs for those doing freight business.
The outlook for international shipping is making great advances, and that can
translate into bigger profits and more business for you, our customers. Maersk
will receive four more of these new ships this year, with the remaining 15
ships to be delivered in 2014 and 2015. Speaking to investors and analysts on
October 2nd, Maersk’s CFO said that the demand for global containers
would grow in 2014 and 2015. He continued, “We have actually had very few
additions to the fleet but, yes, we have ordered some tremendous new ships.
Over two and a half years we will get 20 mega ships that can take in excess of
18,000 containers each.”
BGI Worldwide Logistics is an expert in the
international cargo shipping business. No job is too large for us. With these
new mega ships, goods can reach their destination faster and more efficiently.
Put our expertise to work for you. With over 20 years of experience in
management and operation of domestic and international freight services, we can
help you and your staff to reach your business goals. Call today,
1-800-987-4244, and experience the difference.
Exporting heavy and or delicate cargo may require additional protection. The use wooden packaging and wooden bracing should be used to keep that heavy or delicate cargo secure while moving through the supply chain.
There are a few things to consider when wooden packaging or bracing is used. This article will cover what is typically used within the industry and the regulations that may apply to the use of wooden packaging.
When the decision to use wooden packaging is made, the next step is to take a look at the wood being used and the regulations for the wood in regards the treatment of the wood. To address the issue of invasive pests and plants standards were developed by the International Standards for Phytosanitary Measures (ISPM). Typically, the treatments and markings for the wood are the most important things to consider.
Wooden packaging must be certified when used for international trade, therefore a certificate must be issued. The certification for phytosanitary wooden packaging is issued by the National Plant Protection Organization (NPPO) from each country. The NPPOs issue certificates for two methods used in treating the wood, heat treatments and chemical treatments. Heat treatments for the wood must be in accordance with ISPM standards for time and temperature schedule to achieve a minimum of 132 degrees Fahrenheit (56 degrees Celsius) throughout the entire profile of the wood including the core.
Chemical treatments are also used as an alternative to heat treating. The chemical used is known as methyl bromide. As with the heat treatments, the chemical treatment for the wood must be in accordance with the ISPM standards.
ISPM 15 has guidance on 4 specific components to the labeling of wooden packaging:
- The guidance on the symbol is that it must be registered under national, regional or international procedures. It must also resemble the provided symbol below.
- Country Code
- The country code must be the two-digit International Organization for Standards (ISO) format, e.g., US for the United States, AU for Australia, RO for Romania. It must also be separate from the producer/treatment provider code by using a hyphen.
- Producer/treatment provider code
- The treatment code is unique and is provided by the NPPO and given to the producer of the wood packaging material or treatment provider that will place the marks on the wood packaging material.
- Treatment Code
- The treatment code is an abbreviation for either heat treatment (HT) or methyl bromide (MB). The image above shows a treatment code of ‘HT’ and where it should be placed.
It is important to note that there are no ‘international regulations’ regarding the use of wood packaging material (WPM). However, there are internationally agreed upon standards within the ISPM doctrine. These standards become regulations only when a country adopts the standards and enforces the adopted standards as regulations. Once the standards have become a regulation, the country can adopt all or part of the ISPM standards and enforce them in an effort to reduce foreign pests and plants from entering their countries.
Note: ISPM 15 comprises the regulations in regard to the use, treatment, and markings for WPM. Almost every participating country enforces all or portions of the regulations.
Countries can adopt different aspects of the ISPM regulations, so it is important to be aware of country specific regulations when exporting freight using wooden packaging. For example, the United States enforces all of the ISPM 15 regulations regarding WPM, Australia enforces all of ISPM 15 along with specific guidance on how the labeling is printed, and Panama currently has no requirements for WPM.
Please be advised that we will continue to monitor labor negotiations with the International Longshoreman's Association (ILA) and the U.S. Maritime Alliance. The subject covers the U.S. East Coast as well as U.S. Gulf Ports, totaling fourteen ports between Maine and Texas.
Carriers have announced port congestion surcharges at all U.S. and Canadian ports effective September 30, 2012. In order to address the potential labor unrest or action such as strikes, lock-outs, work stoppage and slowdown which may give rise to significant increases in port congestion and potentially disrupt the normal course of maritime operations; port congestion surcharges may be assessed as follows:
- $800.00 x 20' STD
- $1,000.00 x 40' STD
- $1,100.00 x 40' HC
- $1,266.00 x 45' HC
- $1,600.00 x 53' HC
The Carriers may exercise their rights to reroute or terminate carriage of goods under the bill of lading terms and conditions should operational considerations demand such action.
Please note that the surcharges have been filed as precautionary measure. Should there be no labor action affecting cargo movement to or from U.S. and Canadian Ports, this filing will be cancelled.
Properly Packaging and Labeling Your Freight
Packaging freight in new boxes is ideal. Because boxes wear and weaken with each use, using new boxes insure the integrity of the box is at 100 percent. However, when reusing boxes be aware of the current integrity as it will determine how secure the contents are. If the shipment is particularly heavy, ensure that the seams are reinforced with staples, glue or tape. Ensure that the contents of the box are protected with one to two inches of packing material or padding. Remember that all packages must be properly labeled, ideally, placed on the long and short side of the package. Also when reusing boxes remember to remove all of the existing labels and bar codes, this will eliminate confusing when adding new labels.
Anytime you ship large and heavy items or several packages of freight, using a pallet either made of wood, plastic or aluminum is essential. This will ensure your freight is secure by either banding or wrapping your cargo to the pallet. Ensuring that the pallet is in good condition with no cracks or bends will help to avoid damaged freight. Pallets also allow the freight to be easily moved with a forklift or pallet jack. Pallets vary in dimensions and payload capacity, so it is important to consult with your third party logistics provider (3PL) regarding pallet dimensions and weight limits. When palletizing freight domestically, wood, plastic or aluminum pallets are acceptable. However, when using wooden pallets for international shipments it is important to use heat treated wood. Using wooden pallets that have been heat treated can remove molds and parasites that are known to damage local plant and animal species.
Bill of Lading
Every domestic and international shipment must have a bill of lading. A bill of lading, or BOL, is a legal document that acts as both a receipt of goods being shipped, as well as the contract to deliver the goods. Filling out the BOL accurately and completely will ensure the freight is transported and delivered as desired. The BOL will also help to ensure an accurate invoice for you. Some important fields that must be filled out correctly on the BOL are, but not limited to:
Shiper – contains the information relating to the company, group or individual that releases the freight for transportation.
Consignee – can be used interchangeably with shipper, contains the information related to the company, group or individual that will be responsible for sending a shipment to the desired destination.
Description – contains all the information related to the type of package, the articles being shipped, any markings or remarks.
Weight – details the weight of the freight and is a variable in determining the cost for moving freight.
Class – is a numeric indicator that is used nationally to classify freight. Commodities are grouped into 18 classes between 50 and 500. The class is used as variable in determining the cost for moving freight. National Motor Freight Classification (NMFC).
The rules and regulations of LTL shipping can sometimes seem overwhelming, even to the most seasoned shipper. After all, there's much to understand to keep things running efficiently.
For instance, you need to know how your product is defined by the trucking industry (referred to as the product or freight’s NMFC), how to properly prepare your shipping documentation and how the freight should be properly packaged or bundled. You'll also want to evaluate carriers and the variety of options that are available to you for getting your freight to its final destination as quickly, reliably and cost effective as possible.
When it comes to getting your products to your customer, one of the first things you need to consider is how your product is defined by the trucking industry.
In the world of LTL shipping, different types of products - from steel bolts to auto parts to blenders - are defined according to their makeup. Each product definition is called a classification. The class of your freight plays a prominent role in calculating the freight charge for transporting the shipment.
How are freight classes determined? The many classes of freight are catalogued in the National Motor Freight Classification tariff, commonly referred to as the NMFC. The NMFC is a publication for motor carriers containing rules, descriptions, and ratings of all commodities moving in commerce. The publication is used to classify freight for freight billing and rating purposes.
Besides defining the classes of shipping commodities, the NMFC also assigns item numbers to each type of commodity. The item number is related not only to the commodity itself, but to the material from which the commodity is made, its packaging, and other factor and considerations. Item numbers are associated with rates as well as commodity classifications.
With page after page of item numbers, commodity descriptions, and freight classes, the NMFC is an excellent reference book for the transportation professional. They also offer an online version of the reference book as well called, ClassIt. The book also describes shippers' responsibilities, as well as many of the responsibilities of the LTL carriers.
What do all these different freight classes mean?
As mentioned, several elements, including density and value, determine the freight classification of a commodity. Take ping pong balls, for example. Ping pong balls are class 500 (the most expensive freight class) because of their density, or lack thereof! A carrier can fill an entire freight trailer full of ping pong balls without having much weight loaded. Since rates are based on weight and density, the rate for transporting ping pong balls is higher than it would be for something like heavy steel parts.
But even with very low-density freight, there are ways to reduce your freight rate charges. Looking at another example from the NMFC to see how you can lower your freight charges by accepting some of the risk (or limiting the value of your goods in the event of loss or damage).
Perfumes in barrels or boxes may be classified under NMFC item 59070, class 85. But NMFC note 60000 states that as the shipper, you may declare a "released value" in writing on the bill of lading. In this case, the released value of the property cannot exceed $2.15 per pound. If you put this released value on the bill of lading at the time of shipment, your barrel of perfume's class will be reduced to class 70.
This means a lower shipping rate. In turn, the carrier has limited its liability to $2.15 per pound should damage or loss happen to the shipment. Therefore, stating the released value of your goods on the bill of lading and accepting the associated protection tradeoffs can adjust your classification and lower your rates.
How Freight Rates Are Calculated
Freight rates are based on many factors, including:
1.The distance the shipment is moving
2.The shipment's weight
3.The density of the commodity being shipped
4.The commodity's susceptibility to damage
5.The value of the commodity
6.The commodity's loadability and handling characteristics
The last four elements (among other criteria) go into establishing the classification of a commodity. The NMFC, or National Motor Freight Classification tariff, contains all product classifications. There are eighteen possible classes ranging from 50 to 500. The higher the class, the higher the rate for every hundred pounds you ship. Most less-than-truckload rates are stated as a rate per hundred pounds, or per hundredweight. Rates are structured so that as the weight of your shipment increases, the rate per hundred pounds decreases.
For example: a shipment weighing 100 pounds may cost $41.00 per hundredweight, while a heavier shipment--say, 500 pounds--of the same commodity (moving to the same final destination) may only cost $35.00 per hundredweight. But doing the math, we see that the total charges for the 500 pound shipment are higher (5x$35 is greater than 1x$41). Most LTL carriers state a minimum charge for very light shipments.
Before You Ship
No matter which LTL carrier you select to transport your goods, taking a few important steps before the driver arrives for pickup can keep business running smoothly:
1.Prepare your packaging
Secure and proper packaging helps ensure trouble-free shipping. It also helps limit any possible damage from transloading the packaged freight. All goods should be protected with proper packaging in compliance with the NMFC. (For hints and examples, take a look at the examples under Preparing Your Package below.)
2.Label every piece clearly and completely
Complete names and addresses on each piece are needed to ensure that packages in your shipment arrive intact. Label placement is important too. (For hints and examples, take a look at the examples under Proper Labeling below.)
3.Complete a bill of lading
The bill of lading is a legal contract between the shipper or a 3rd Party Logistics Provider (3PL) and the carrier. It should state exactly what is being shipped, where it's coming from and where it's going to, etc. If using a 3PL, they will usually provide a system generated BOL for the shipper to use for the freight shipment.
4.Select a carrier
Selection criteria are often based on the commodity you are shipping, the services the carrier can provide, where your shipment is going, the date by which the shipment should arrive, and the cost of these services. You must evaluate the options based on your company's freight shipping needs.
5.Place the order
Depending on the time of your order, most carriers can have a truck at your location that same day or usually the following day at the latest. The carrier or 3PL provider will probably ask where the shipment is going, how much it weighs, if it is ready to be picked up, how late the shipment can be picked up, and who is paying the charges. Hint: Place the order early in the day to increase your chances of a same day pickup.
Proper packaging is a must.
Don't ship your goods without proper packaging and protection. Many claims and freight damage arise from improper packaging--and packaging errors may eliminate the carrier's liability.
When possible, heavy, bulky items should be placed on pallets for improved handling and care. To maximize carton strength, stack cartons on the pallet vertically. You can secure cartons to a pallet with banding, shrink-wrap, stretch-wrap, or breakaway adhesive.
Cartons should be stacked squarely on the skid, with no overhang. Box flaps and corrugations should face up. It’s best that the top surface is flat.
Shipping labels must be placed on every piece of your shipment. The shipper and consignee information must match the bill of lading information exactly and your labels must be legible and complete.
Ideally, you should place labels securely on both the long and short sides of each piece. DOT hazardous material labels are required when shipping hazardous materials as specified by the DOT. Address markings should be located as shown in the examples below. The location shown indicates the top, a side, or an end. If more than one location is shown, you may choose which one to use.
Bill of Lading
The bill of lading is an important document. It acts as a receipt for goods, a contract of carriage, and may act as a document of title (if order bill of lading). Take the time to make sure the bill of lading is filled out completely and correctly, since this will help ensure error-free delivery of the freight to its final destination. A correct bill of lading also ensures an accurate invoice for you.
Receiving Freight: Clear Delivery
What about when you're on the other end of a freight shipment? Receiving freight can be as simple as sending it if you follow a few steps:
1.Stay in contact with your supplier/shipper to find out when your shipment was shipped, what carrier it was given to, and an approximate arrival date.
2.On arrival, inspect the shipment immediately for obvious signs of damage.
3.Compare the actual number of handling units to the number listed on the delivery receipt.
4.Sign the delivery receipt.
The carrier's driver will usually help you receive/unload your shipment and answer any questions you might have. While the driver is there, compare and count the pieces of freight you are receiving to that of the carrier's freight bill. When you've determined that the condition and quantity of your freight is acceptable, the driver will ask you to sign the delivery receipt. The driver will provide you with a copy and will take the signed copy with him/her (as a delivery receipt) for the carrier’s record of the delivery.
When a carrier receives a signed delivery receipt with no exceptions or damages noted, it is called a "clear delivery”. Clear deliveries generally mean everything went smoothly: success for both the shipper and consignee of the freight.
An invoice for the shipment will be sent to the appropriate party soon after pickup or delivery has been made, depending on whether the shipment is prepaid or collect. Questions regarding the amounts shown on the bill should be directed to your carrier or 3PL provider. If you feel you have paid too much, contact your carrier and ask to file an overcharge claim. Note that carriers do charge for incorrect weights and classification of goods. Therefore, it’s very important to state the correct weight and freight class when rating and shipping via LTL carrier in order to eliminate rate changes due to incorrect information.
If a shipment is either short or damaged, you should still accept the delivery but make clear notes of the short or damages on the delivery receipt. Make sure you receive a copy noting the short or damages. It's the duty of the shipper and the consignee to mitigate the loss with the LTL carrier’s involvement. After you accept the shipment, take steps to protect the shipment from further loss and file a claim for the actual shortages or damages involved promptly.