When it comes to exporting goods, there are a few different options available to business owners.
One of the most popular methods is ocean freight export, which can be an affordable and efficient way to move products around the world.
What is Ocean Freight Export?
Ocean cargo transport is responsible for nearly 90% of global commerce by capacity, solidifying its status as the titan of international shipping. In this method of transportation, substantial quantities of merchandise are securely stored in containers and conveyed by vessels worldwide.
Advantages of Exporting via Ocean Freight
There are many advantages to using ocean freight for your shipping needs. Some of these advantages include:
Standard Shipping Containers
Types of Ocean Freight Services
There are several types of ocean freight services available to suit different types of cargo and shipping needs. These include:
FCL shipping involves the use of a full container for your goods. This option is best for larger shipments that require a dedicated container. FCL shipping is generally faster and more secure than LCL shipping, as your goods are not co-mingled with other shipments.
LCL shipping is used for smaller shipments that do not require a full container. Your goods will be consolidated with other shipments in the same container, which can be a more cost-effective option for smaller volumes of cargo.
Export Documentation Requirements
When shipping goods by sea, there are several documents that are required for customs clearance and other purposes. These documents include:
The Bill of Lading is a legal contract between the shipper and carrier. It contains important details such as the shipper, consignee, and carrier names, a description of the goods, the origin and destination ports, and the terms of the shipment.
The commercial invoice is a document that provides details about the goods being shipped, such as their value, quantity, and description. It is used for customs purposes and to determine the cost of duties and taxes that will be assessed.
A packing list is a comprehensive record of all the goods being shipped, which includes vital details such as size, weight, and packaging for each item.
The origin certificate is an authoritative document that furnishes critical details about the country where the goods in the shipment were produced. It is used for customs purposes and to determine whether the goods qualify for preferential treatment under a free trade agreement.
Factors Affecting Ocean Freight Costs
Several factors can impact the cost of shipping goods by sea. These include:
Freight rates are the charges levied by the carrier for transporting your goods. Rates can vary depending on the route, the type of cargo, and which carrier is handling the transportation.
Fuel surcharges are additional fees that are added to the freight rate to account for fluctuations in fuel prices.
Port charges are fees levied by the port authority for using the port facilities. They can include charges for handling, storage, and other services.
Customs duties and taxes are fees levied by the importing country on imported goods. The range of these charges may alter depending on the particular goods being delivered and the origin country.
Insurance is an additional cost that may be required to protect your goods during transport. Insurance rates can differ for each shipment depending on the value of the goods being shipped and the level of coverage required.
Choosing a Partner
Choosing the right ocean freight export partner is crucial to ensuring that your goods arrive at their destination on time and in good condition. There are several types of partners to choose from, including:
Freight forwarders are companies that specialize in arranging the transportation of goods on behalf of their clients. They can handle all aspects of the shipping process, including documentation, customs clearance, and insurance.
NVOCCs are companies that do not own their own ships but arrange for the transportation of goods on behalf of their clients. They typically have contracts with multiple carriers and can offer a range of shipping options.
Ocean carriers are shipping companies that own and operate their own ships. They can offer a range of services, including FCL, LCL, and Ro-Ro shipping.
Preparing Your Goods for Export
Properly preparing your goods for ocean freight export is essential to ensuring that they arrive at their destination in good condition. Some things to consider when preparing your goods include:
Your goods should be properly packaged and labeled to protect them during transport and to facilitate customs clearance.
This is a critical step when importing and exporting goods. You must ensure that your goods comply with the customs requirements of the importing country. This may include obtaining permits, licenses, or certificates.
If you are shipping hazardous materials, you will need to comply with the regulations governing the transportation of dangerous goods by sea.
If your goods require temperature control, such as perishable goods or pharmaceuticals, you will need to request a quote specifically for temperature-controlled containers.
Tracking Your Ocean Freight Shipment
Tracking your ocean freight shipment is essential to ensuring that you know where your goods are always. Some things to consider when tracking your shipment include:
Most carriers offer online tools for tracking that allow you to monitor the status of your shipment often in real time! Make sure that the forwarder you work with offers this service.
Your freight forwarder should be your first point of contact for regular updates on the status of your shipment. They should also be proactive in relaying any potential delays or other issues affecting your shipment.
Protect your business by purchasing adequate insurance coverage for your goods in case of loss or damage during transport.
Customs Clearance and Import Duties
Clearing customs and paying import duties and taxes is a critical part of the ocean freight export process. Some things to consider when dealing with customs clearance and import duties include:
The customs clearance process can be complex and it is quite easy to make mistakes. Your freight forwarder can help you navigate this process and ensure that all required documentation is in order.
Duties and taxes levied on imported goods may differ depending on the specific products and the country they come from. Your freight forwarder and a licensed Customs broker are invaluable resources to help you determine the cost of duties and taxes that will be assessed.
Free trade agreements can help to reduce or eliminate import duties and taxes for certain goods. Your freight forwarder can help you determine whether your goods qualify for preferential treatment under a free trade agreement.
Transporting goods by the sea offers an economical and dependable method for international shipping, offering various options like full-container load (FCL) and less-than-container load (LCL). However, the process can be complex, especially for new shippers.