Sea Freight : The Popular Choice

Sea freight remains on of the most popular choices for shipping goods globally. In fact, about 80% of goods shipped across the world use this method for its ability to reach all continents and ship large quantities of products of any type. Automobiles, machinery, agricultural products, hazardous materials, and more are all suited for shipping by sea. Generally the manufacturer is able to arrange loading the container and sending it to the departure port where it is loaded and heads for its destination port.

Once the container is loaded, it is then transported by ship which can take anywhere from a few days to almost a month, depending on the final destination port. For example, a shipping container from Shanghai to Los Angeles can take anywhere from 15-20 days to arrive. While this may seem a bit long, it makes practical sense for clients who project a product need within a month or more time-frame. Clients using this method should be aware of this timing and also the incoterms, various methods of shipment by sea, to select the options that make the most sense for the business objectives and buyers.

Once the container arrives, it is then unloaded and goes through customs verification before being ready to move to the client’s arranged facility for storage and distribution. Once the container arrives, it is unloaded and products are stored ready to be shipped to buyers. The entire process from manufacturer to the end user can be under one month. In some cases, it can be longer, especially where it is taking into account the customs and tariff rates, if any, for products received by sea and at the port. Take for example 2020 when many ports across the world were backlogged with shipments coming in by sea due to the pandemic. This created a major disruption in the global supply chain system and made it more difficult to receive goods by sea. While this is not a common occurrence, clients should be aware that such incidents can disrupt their supply chain system.

Shipping by sea remains one of the most cost-effective methods for clients. Costs can be pennies on the dollar compared to other methods, which means larger profit margins through reduced transportation costs.

Understanding Incoterms

Incoterms are the 11 methods by which shipment by sea, land, or air can be sent from the manufacturer to the seller. It is important to understand these terms, especially when ordering products. Buyers should aware of which method makes the most sense for them and their business needs since each one defines different responsibilities in the shipment process between the seller and the buyer. Choosing the wrong method could mean a delay in receiving goods or possibly not receiving the goods at all because the duties were not performed by the responsible party as outlined in the incoterm.