The most economical way to export goods overseas is by using ocean shipping and logistics involved in moving cargo from the manufacturer to the docks, onto the ship, and across the ocean to the intended destination. Further logistic planning involves removing the cargo from the ship and taking it to its final destination. In the current shipping industry, an ocean freight forwarder ensures that everything from loading to unloading, the duties, and tariffs, and drayage and storage will coordinate smoothly and promote the safe and efficient delivery of the goods.
Moving large steel containers, shiploads of wheat and grain, large pieces of machinery, or ships holding oil and petroleum products, requires a variety of shipping methods, but in general, the cargo should be managed with a consistency of practices and procedures that provide shippers a way to easily communicate and employ a common approach to making sure the transportation of goods is a successful venture.
International ocean shipping has many variables that have to do with the types of cargo, the many different ports that the cargo passes to and through, and the accompanying rules and regulations that ocean freight forwarders must be aware of to ensure the smooth transfer of goods. In addition, some ocean shipping companies may specialize in one type of cargo if there are particularly complex or challenging standards that must be met to handle transportation safely and efficiently. In spite of these many differences in the shipping and exporting industry, there are some basics that all shippers know and understand that provide the core of understanding how things work and how things get done.
Knowledge of Incoterms
Incoterms, also known as International Commercial Terms, are rules and guidelines established by the International Chamber of Commerce to facilitate communication and agreement between buyers and sellers to assist in the smooth movement of cargo from one destination to another. One of the most essential components of understanding the shipping industry is to have a firm grasp of these Incoterms and how they relate to the cargo that must be shipped.
The basis of Incoterms stems from establishing accountability for the movement of the cargo from origination to destination. A general look at these terms allows the observer to see that the first Incoterm on the list places the total accountability for the safe passage of the cargo in the hands of the buyer. This Incoterm is named EXW- EX Works (named place of delivery) and places the maximum responsibility on the buyer and the minimum on the seller. As the Incoterms progress, accountability shifts from the buyer, and toward the seller until the final Incoterm on the list, DDP (Delivered Duty Paid) places the maximum responsibility on the seller and the minimum on the buyer.
Within the transition from buyer to seller responsibility, there is a breakout of Incoterms designed especially for the shipping industry that defines various functions of loading, unloading, insurance, and carrying that are unique to the overseas logistics.
Ocean freight forwarding companies must be familiar with these terms and able to advise their clients to choose the best method for their particular situation. Asiana USA has a great deal of knowledge and experience dealing with the assignments of the correct Incoterms for a shipment, and we are an excellent resource for understanding this basic concept.
The Types of Services Available
Incoterms provide the ocean freight forwarder the basic terms to encourage a good understanding of the contractual responsibilities of the buyer and seller as well as a clear direction for the shipper. However, a basic knowledge of exporting and logistics also includes a description of the types of vessels and the various ways of loading the vessels to assist the client better.
Consolidation
Consolidation, also referred to as a buyer’s consolidation is the job of picking up cargo from the seller’s warehouse or factory and packing it in a full container load (FCL) or in a less than container load (LCL) to transport it to the vessel for shipping. The company performing the service needs to have direction as to where they pick up the cargo if it is stored in a warehouse before shipping, and if they are picking up the cargo, the address of the location and the details of the cargo.
LCL (Less Than Container Load)
When the shipper has included your cargo in a container with another seller’s cargo, it is considered to be a less than full container, and there are positives and negatives about shipping in this manner. The freight forwarder should be able to understand these differences and advise the client on the options they have. For this mode of loading, the shipper needs to know if they are picking up the cargo or if the seller is delivering it to the shipper’s warehouse.
FCL (Full Container Load)
A full container is usually destined for the shipping port or to the shipper’s warehouse. It may be removed from the truck that carries it from the original location or left on the truck until it can be handled or loaded onto the ship.
RORO (Roll on Roll off)
This is cargo that may be mobile or static and unable to be placed in containers. The ocean freight forwarder makes sure there is space on the vessel for this kind of cargo and that it can be loaded and unloaded safely and efficiently.
Heavy Lift, Break Bulk, or Project Cargo
Freight forwarders must have a basic knowledge of how to handle cargo that is oversized or very complex. This could be something like a specialized piece of machinery or a combination of hazardous and non-hazardous materials that have specific regulations and related procedures to ship safely.
Final Thoughts
The job of handling and shipping cargo overseas is a complex responsibility for the ocean freight forwarding company. Although there are many duties associated with this job, the basic responsibilities include knowing how to formulate and communicate agreeable contract language between the buyer and seller, and to also make sure the cargo is loaded according to the best loading practices.
Beyond these basics, there is a whole list of unique and detailed services that international ocean shipping requires, and it is the experienced freight forwarder who will serve their clients the best. At Asiana USA, we have a highly trained and professional staff of shipping personnel to handle the demands of getting the overseas shipping done correctly. Contact us today at Asiana.com or call us at 833-444-1333 for an estimate.
