Transportation Shipping

Arrange for wholesale shipping.

You may or may not be responsible for arranging the transportation. In any case, you should know enough about how shipping works to be able to work knowledgeably with your transport people.

Transportation logistics is one of those areas that really require special expertise. We highly recommend using a freight forwarder to help with your transport needs. But, before we explain the role of the freight forwarder, it makes sense for you as the purchaser of services, to have a little bit of background on the major types of transportation available and why one is selected over the other.

Major Transport Methods

Importers typically transport goods by either sea freight or airfreight. The choice of method depends upon factors such as weight and bulk of the goods, lead time necessary for shipping and time requirements for delivery.

Sea Freight

You will typically choose to transport heavy or bulky goods by sea freight to save money. However, sea freight transport is substantially slower than airfreight, taking 20 to 40 days to travel by water. Goods transported in this way are typically packed into containers. Freight containers are 20 to 40 foot metal boxes that hold goods safely and securely and can be efficiently stacked into or onto a freight ship.

Full Container Load (FCL)

If you have enough merchandise to fill a container, you will have the opportunity to ship by full container load (FCL). Under these circumstances, your container can be moved to your supplier to be filled or your goods can be transported to the container site for packing. You will save money because you can avoid the space requirements of security packaging to keep your shipment safe from other shipments, the loading and unloading fees associated with a container that is carrying goods form several purchasers and the cost of multiple shipments; charges for a full container for one purchaser are processed as a single transaction.

Lesser Container Load (LCL)

If your shipment will not fill a container, the goods will be consolidated along with other shipments into a mixed load traveling to the same destination. You will be charged by the cubic metre your goods require. There will be additional charges for loading and unloading at departure and arrival ports.

Sea freight Costs to be Considered At port of departure

• Collection/Loading/Delivery from shipper to Port
• Export documentation, Bill of lading fee
• Storage, Consolidation if required
• Terminal Handling charges
  • Freight Charges
  • At port of arrival
• Terminal Handling charges
• Customs clearance charges
• Import Duty & VAT (calculated by Customs & Excise)
• De-stuffing (breaking up an LCL ‘consolidation’)
• Demurrage (storage in the event of any delay in moving your goods)
• Road Haulage to your premises
• and unloading

Airfreight

Air freight is the choice of most companies to ship lightweight, valuable or urgently required goods. The lead-time can be as short as 2 days to travel from one side of the world to the other. Whilst the costs are normally higher than sea freight, the benefits gained by the speed of supply can be significant, especially when responding to sudden upswings in buyers’ demand.

Most international destinations are covered by both passenger and freighter aircraft. The large international airlines often fly into the more popular locations several times each day. Even the most unusual countries and locations are adequately covered.

The choice of aircraft will depend on the size, shape and volume of your shipment. Most general cargo can travel comfortably in the cargo hold of a standard passenger aircraft however oversize, larger consignments may have to be flown on a ‘freighter’ aircraft (no passengers, freight only) which can accommodate larger cargo.

Most popular destinations are serviced directly by more than one airline and many also offer an ‘indirect’ service which in effect sends goods to the final destination via one or more transit airports at no additional cost.

Airfreight Costs to be Considered At airport of departure

• Collection/Delivery from shipper to Airport
• Export documentation
• Delivery into Airline
• Airline Handling (loading goods onto airplane)
  • Freight Charges
  • At airport of arrival
• Customs clearance charges
• Import Duty & VAT (calculated by Customs & Excise)
• Airline Handling (unloading goods from airplane)
• Collection from the airline
• Any additional storage required as a consequence of delays
• Road Haulage to your premises

Mail Service

If you are starting out small and/or have lightweight imported goods, you may want to consider importing by mail or courier. In many countries, there is no duty required on mailed parcels of small value. And, for parcels that are moderately valued, $2,000 in the US, for example, the postal service does all of the customs clearance work for you and you simply pay the duties and taxes plus a small processing fee.

All of that information having been conveyed, if you are going to be importing large quantities of goods, you should definitely be using a freight forwarder.

Freight Forwarder

Freight forwarders are agents who assist importers in moving cargo from the supplier to their destination. They specialise in knowing foreign importing requirements, shipping processes and international shipping documentation.

The freight forwarder will provide a detailed estimate of anticipated costs like freight costs, port charges, consular fees, costs of special documentation, insurance costs, and their handling fees. The freight forwarder will also recommend packing methods that are cost effective and ensure your products arrive at their destination in good condition. Their services also extend to moving shipments from ports of entry to warehouses or purchaser locations.

These companies often have a consolidated billing system so that you won’t have to pay the trucker, ocean carrier, and customhouse broker separately; you pay one fee and they handle the rest.

If you are planning to import in quantity, unless you plan to become an expert in transport methods, use a freight forwarder.

What have we learned?

By the end of this section, you should know:

• You should select a transport method based on weight, time to delivery and cost considerations.
• Small importers may find it easier to transport by postal service.
• Freight forwarders provide value that greatly exceeds the cost of their service.

In the final part of this ecourse we will talk about processing your shipment though customs.

To our success working together,