Sea shipment

 Table of Contents

What’s the sea frieght shipment?
Types of ocean freight services.
How to ship using ocean freight.
The most popular incoterms.
What are the pros and cons of ocean freight?
When does it make sense to choose ocean freight?

What’s the Sea shipment?

Sea shipment, also called sea freight, is the movement of goods internationally by sea. Ocean freight is far and away the most popular option for shipping goods internationally. Roughly 90% of goods1 are transported around the world by sea. But while it’s popular, that doesn’t mean it is the only option or the best one for that matter.

Whether you are just starting or are a veteran in international shipping, most business owners find that they need to review their shipping options from time to time. If you’re currently at that point where you need to ask “Does ocean freight make sense for me?”, we’re here to help.

In this article, you’ll learn all you should know about ocean freight, including what it means, how it works, how much it may cost, and when it makes the most sense to choose ocean freight.

Types of Sea shipment services

As mentioned earlier, container shipping is one of the most popular options for ocean freight. This is largely due to its relative safety and ease of handling. Containers can be moved very easily without disturbing the goods being shipped. However, they are only a good option for certain kinds of goods, such as dry or already packaged goods.

When it comes to container shipping, there are essentially two types of shipping services that are available – LCL or FCL.

LCL means less than container load, while FCL means full container load.
FCL shipments basically involve shipping your goods via one or more containers that you use exclusively. Only your goods will be in the container, ensuring that your shipment will be undisturbed until you open the container by yourself. This option makes the most sense when you have goods that can fill a container or that nearly fill it up.

With LCL shipments, the goods intended to be shipped are usually less than it takes to fill a container. So, instead of having a container all to yourself, which can be relatively expensive, you can split the cost and share the container with goods belonging to other people. But the downside to this option is that your goods may be more vulnerable to mishandling or damage during the voyage.

 How To Book The Sea Shipment?

Ocean freight relies heavily on the services of third parties called freight forwarders. Freight forwarders usually mean a third-party individual or company who pick up your goods, properly arrange them to be loaded and onboard for shipping, and eventually correctly delivered to the final destination. This is because it is usually necessary to have trusted eyes and hands that can help collect your goods from the seller, arrange shipping and place your goods aboard the ship.

Shipper: a person/company dealing with shipment at supplier end.
Consignee: a person/company dealing with shipment at receiving end.
Freight Forwarder: the logistics provider (for road, ship or air transportation).
Shipping Line: company carrying product related cargo.

Step 1. Export haulage:

The first step involves the movement of the products’ cargo from shipper’s to forwarder’s premises. Products usually get transported by road or railways or a combination of both.

Step 2. Export customs clearance:

It is a type of official regulatory formality involving submission of valid and required documents to the concerned authorities.

Step 3. Origin handling:

This step covers all physical handling, inspection, and loading of the cargo; at the supplier End’s warehouse. This is coordinated by the freight forwarder.

Step 4. Ocean freight:

To meet the required timeline for shipments, freight forwarder schedules shipping line for transportation. This step not only covers costs involved in shipping from port-to-port but also the levied surcharges like currency adjustment factor, exchange rates, etc.

Step 5. Import customs clearance:

This process can begin even before the arrival of cargo at the US. This clearance is performed by customs house broker appointed by the consignee.

Step 6. Destination handling:

This involves transportation and unloading of cargo from port to destination warehouse.

Step 7. Import haulage:

The final step of actual delivery of the product to the consignee and ultimately to the consumer.

Want to learn more about the 7 step freight forwarding process? Download our free guide now!

The most popular incoterms are:

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.

CNF:With CNF, the seller takes the more obligations. The terms dictate that the seller will be responsible for the costs of shipping, but not include insuring the goods and inland transportation.

CIF: For the seller, they must be responsible for the costs of shipping, and insuring the goods till the shipment arrived the destination port. But not include the any job on the destination port and the transport inland.
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 are the pros and cons of Sea Shipment?

As you have learned already, ocean freight may be popular, but it has both its high points and low points. Some of the advantages you can expect from ocean freight include:
Higher shipping capacity: Sea freight is perfect for bulky shipments. Other shipping options are only viable for lighter products that are not being shipped in bulk.
Cheaper costs: Overall, ocean freight is much cheaper than other options, costing just 50 cents per kg. Compare this to standard air freight which costs roughly $4 per kg and express air freight, which costs $6 per kg.
Fewer restrictions: Shipping by air freight is subject to several restrictions relating to the type of goods you can ship. For instance, you cannot ship flammable products like perfumes or biochemical products like some medicines on air freight. There are fewer restrictions for shipping by sea.
Lower carbon footprint: Ocean freight produces relatively lower emissions than air freight. New regulations introduced by the International Maritime Organization will reduce these emissions even further.
Despite the positives, here are some negatives to keep in mind：
Longer shipping time: Ocean freight is so much slower than air freight, which is usually five to six times faster. Taking the example of the freight between the US and China, shipment by sea will take about 30-40 days, whereas shipment by air only takes about a week, and express air may only take 3 days.
Unpredictable shipping: Ocean freight is more vulnerable to external shocks like bad weather, customs delays and port congestion. This can easily add days or weeks to your delivery.
Less protection: Since they are in transit for much longer, goods shipped by ocean freight are more susceptible to damage.
Less reliable: Due to the many moving parts involved in ocean freight, goods are at a greater risk of being mishandled or misplaced.

When does it make sense to choose ocean freight?

 You should consider going with ocean freight if you are shipping large or bulky goods, or when it is vital to reduce your shipping costs to save money. Ocean freight also works very well when you have a high volume of orders within the same period.But if you are deciding to go with ocean freight, you should generally leave more than enough time for the goods to arrive. If you do not have flexible delivery dates, then you may be better off looking elsewhere. The complexity of the process and the potential for delays may put you in a less than ideal situation otherwise.Overall, ocean freight represents a great option for international shipping, but only in the right circumstances. It can be a relatively cheap option, but this is often offset by the ambiguity in the process.