OCEAN CARGO

What are the advantages of ocean freight?

• Cost Effective – transporting containers of goods by ship is the one of the most cost effective forms of transport, which is important supply chain management and operations within a business and can help keep the price of goods competitive for the end customers
• Heavy goods – for items that are big or heavy, shipping might be the only way to get goods overseas, as airlines can restrict form of transport and shipping ports generally have large storage capabilities
• Environmentally Friendly – ocean freight is the most environmentally friendly form of transport for cargo, which can help boost the companies brand and reputation

Types of Ocean Freight

There are four major types of shipping terms that you should know about, also known as incoterms (International Commerce Terms), which set out clear definitions for where the goods are dispatched from, and to.

• EXW, or ExWorks means the supplier transports the goods to the factory or manufacturer.
• FOB, or Free on Board, which delivers to the port or terminal in the country of the supplier.
• CIF, or Cost, Insurance and Freight, which covers transport to the buyer’s country
• DAP/ DDU, or Delivery at Port / Delivery and Duty, Unpaid, which delivers all the way to your facility or warehouse, excluding the cost of tariffs and taxes

In short, the buyer can arrange for their own freight agent and delivery, or deliver using the sellers freight forwarder (possibly incurring some form of mark up or cost).

Generally speaking, suppliers will give a quote for an ExWorks or Free on Board transport service when delivering goods.

How are goods shipped?

Goods are loaded onto containers which are then shipped. There are several types of containers which come in different shapes and sizes, but we’ve highlighted the main three types of containers here:

• 20’GP = 20’DV = 20FT = 20′ = 20 feet general purpose
• 40’GP = 40’DV = 40FT = 40′ = 40 feet general purpose
• 40’HC = 40’HQ = 40 feet high cube

Like with Air Freight, shipping goods can be consolidated to benefit economies of scale and reduce the price, this is known as LCL (Less Container Load). If you are shipping enough goods to fit into one container, or the goods are fragile or contain chemicals / liquids, it may be good to consider FCL shipment, Full Container Load.