What is the most common form of transport for importers and exporters? Ocean freight! Do you know that 90% of the golds that are transported globally are transported through the sea? You can move from any port in the world to another port without hassle; for example, you can ship your goods from Houston, through Sifax Global, to Nigeria. However, to fully enjoy its benefits, you should understand its intricacies and complexities, including the types of ocean freight, how much it cost, shipping prices, for example, the shipping prices from Houston to Nigeria, Bills of lading, Incoterms, among many other things.
Why should you transport using Ocean freight?
You can move your shipments by road, though that is mostly local. You can also move it by rail, air, pipeline, cable, space, et cetera. What then makes ocean freight special compared to these other means of transportation?
- It is cost-effective
Saving cost is crucial to the supply chain management and operations within a business, and transporting your goods by ocean freight ensures that you save costs. By doing this, also ensures that the price of the goods remains competitive for the end-users.
- Heavy goods
Items that are big and heavy, for example, heavy-duty agricultural equipment, can only be transported by sea. Airlines, in many cases, restrict the movement of the shipment because of the weight. This, however, is no problem for ships, as the entire shipment can be loaded and transported without hassle.
- It is environmental friendly
It is very friendly to the environment, which can boost companies’ reputation or individuals that use it as a form of transportation for their goods—consider it as a marketing strategy.
What are the types of Ocean Freight?
The International Commerce Terms, also known as Incoterms, describe the types of ocean freight there are. They explain the terms of the shipping contract—where the goods are transported from and to what place. These terms include;
- Free on Board
FOB indicates that the shipment is to be delivered to the port in the supplier’s course try.
- Cost, Insurance, and Freight
CIF covers the cost of transport to the buyer’s country.
EXW indicates that the supplier transports the goods to the manufacturer.
- Delivery at Port/ Delivery and Duty, Unpaid
They are also known as DAP/DDU,delivers the shipment to the client’s facilities without tariffs and taxes.
Generally, clients can arrange for their own freight agency to engage a freight forwarder or third-party company to transport the goods.
How are the goods shipped?
The shipment is loaded into a container and is then shipped to its destination. Several containers are used to ship these goods, each with its shape and size. Similar to air freight, you can consolidate shipments to reduce costs and benefit the economies of scale, a technique known as the Less Container Load (LCL). However, if your goods can fit into one container, or they are fragile, for example, chemicals, glass, et cetera, you may want to use the Full Container Load (FCL). After your goods have been loaded into the container, they are then transported to a Container Freight Station or Container Yard for loading onto a ship.
What are the expected costs to be incurred with Ocean or Sea freight?
The tariffs and costs for ocean freight are numerous, especially when you are shipping goods internationally. The costs are also dependent on the agreement with your supplier. When you iron out the details with your supplier, you are assured of the necessary costs to pay. However, these are some of the fees you are expected to cover;
- Transportation to and from the loading port
- Loading port fees
- Ocean freight charge
- LCL or FCL fees
- Export and import customs declaration
- Destination port fees
- Customs duty and tax
- Destination country customs related fee
- Destination port handling fee
- Destination agent service fee
Using a freight forwarder of a third-party company can help you ease a lot of your stress while trying to transport your goods from one place to another. They will help you decide the shipping line to use to transport the goods from the pickup spot to the destination point. However, involving a third-party in the transport of your goods implies that you lose control over the process of transportation. They will only give you details as to how it is going. You will also handle all the costs of the ocean freight.