While the relationship between sea and world trade is thought to date back about 5000 years, sea freight has evolved to become the linchpin for the global economy. Be it the bulk transport of commodities or the import/export of manufactured goods, sea freight shipping is simply indispensable.
Accounting for over 90% of world trade, sea freight shipping is an affordable and efficient means of long-distance transport of high quantities.
As global freight ramps up, maritime trade volumes are set to triple by 2050. Moreover, sophisticated sea freight solutions by modern shipping freight companies and their wide-reaching freight forwarding networks have given a new meaning to the sea-borne trade.
If, as a business, you are trying to wade through the complex waters of the sea freight, you’ll soon find yourself caught up and overlook the basics. But we advise otherwise. With so many moving parts of sea freight, it is essential to be equipped with the basic knowledge.
Therefore, we’ve broken down the nitty-gritty of sea freight in a simple manner for you. Let's get started.
What is Sea Freight?
Sea freight or ocean freight is the method of transporting goods by sea. In its most common form, cargo is packed into containers with standard sizes of 6 to 12 meters (20 to 40 feet), which are loaded onto colossal shipping vessels or ships. Ships then transit through sea routes and transport the cargo to their destination.
A typical freight ship can carry about 18,000 containers (TEU). TEUs, or six-meter (20 feet), are the primarily accepted units of ship capacity measurement in sea freight.
The advanced technical features of shipping vessels make them capable of carrying massive amounts of goods between the continents, making sea freight the most cost-efficient mode of transport.
Yet, sea freight is much slower compared to other international shipping methods like air freight, as the typical time for the arrival is between 40 to 60 days.
Common cargo transported via sea freight include:
- Crude oil and petroleum products
- Chemicals
- Agricultural goods
- Furniture
- Electronics
- Ores and minerals
- Vehicles
- Heavy machinery
- Livestock, etc.
Types of Sea Freight Shipping
As mentioned earlier, container shipping makes up the most common shipping options, thanks to its relative ease and safety while handling oversized packages. Sea freight by container shipping comes in two varieties.
Less than Container Load (LCL)
If the cargo size is less than the maximum load-carrying capacity of a container, it is beneficial to share the container space with shipments by other exporters. So, businesses shipping smaller quantities of goods only have to pay for the container space they use rather than renting the whole container.
Benefits of LCL:
- You can split and reduce the sea freight cost.
- You have the flexibility to maintain low inventory levels.
- You can ship smaller quantities more frequently.
Full Container Load (FCL)
If the volume of goods is high enough to warrant being shipped in one or more containers, i.e. more than 20 cubic meters, then this option makes the most sense. Here, you rent the container(s) exclusively, and only your shipment occupies the entire space.
Benefits of FCL:
- You pay a flat rate rather than paying on the basis of the container space you use.
- In-transit damage risks are less.
- Faster transit time compared to LCL.
So, how do you choose between LCL and FCL?
As a matter of fact, choosing between them depends on the factors that might be almost exclusive to your business needs.
In general, factors like volume, budget, cargo type, and urgency can be your best compass to decide which container shipping option to go with.
Let’s say, if your shipment is larger than ten cubic meters, it's worth paying the flat rate for the entire container. Because, for goods that occupy more space, LCL costs can shoot up steeply. But for low-volume shipments, LCL may turn out cheaper. If your load is much lower than ten cubic meters, FCL will likely be more expensive.
Plus, if speed and cargo security are your primary considerations, which is often the case for time-sensitive and fragile goods, FCL is a better choice.
How Does Sea Freight Work?
While shipping cargo via sea freight, you will need the services offered by third-party freight forwarders. They are the ones who specialize in complex procedures and documentation involved in successfully executing sea freight.
However, an essential aspect that you should be aware of is the shipping contract. It is governed by standard international shipping terms called Incoterms. These are trade terms established by the International Chamber of Commerce (ICC) and define seller’s and buyer’s responsibilities in a shipping agreement.
In general, the process of sea freight involves the following steps. However, if there are exceptions depending on the goods and country, your freight forwarder is your best guide.
1. Planning Freight at the Origin
On getting the order from the buyer, the shipper, exporter, or seller prepares all the necessary documents, such as the packing list and commercial invoices, and packs the goods.
2. Contacting the Freight Forwarder for Booking
The freight forwarder, on getting the freight schedule from the shipper, books the freight.
3. Arranging the Pick-up
The goods move from the seller’s warehouse to the forwarder's warehouse.
4. Export Custom Clearance
The goods go through customs clearance at the origin by providing extensive documents with a detailed cargo declaration.
5. Handling at the Origin
It prepares goods for shipping. After a goods check, the forwarder confirms the receipt of goods. Depending on LCL or FCL, cargo is stacked and transported to the port of departure to await loading on the ship.
6. Transporting across the Ocean
The actual transportation over sea takes anywhere between 20 to 60 days.
7. Import Custom Clearance
When cargo arrives at the destination port, the local forwarder initiates customs clearance procedures. It involves necessary paperwork, cargo declaration, and paying the fees.
8. Handling at the Destination
The cargo is transferred to the forwarder’s warehouse, where it is opened and examined for any damage or loss. The bill of lading is checked. Then it moves ahead for import haulage.
9. Final Delivery
The cargo is loaded onto trucks or trains for inland transportation to the designated destination.
Pros and Cons of Sea Freight?
|
Benefits |
Drawbacks |
|
Massive shipping capacity Perfect for bulky goods that are difficult to transport by other modes. |
Longer shipping time As sea shipment moves slowly, sea freight is time-consuming. |
|
Cost-effectiveness Large quantities of goods can be transported at much cheaper rates. |
Higher damage risks Due to longer transit, the goods are vulnerable to damage or loss. |
|
Fewer restrictions Goods shipped are subjected to fewer restrictions. |
Less predictability Port congestion and bad weather may hold up cargo for longer. |
|
Eco-friendly Less carbon footprint than air freight, due to lower fuel consumption and emission |
Limited Connectivity Lack of the facility to receive sea freight ships can impact the delivery. |
Wrapping Up
If you are a business looking to transport huge quantities of products overseas or domestically, sea freight is hands down the most cost-effective way.
Hopefully, this article has given you insights into how sea freight works. But we won’t blame you if you still have questions. Our sea freight service experts are just a click away to make your sea freight journey hassle-free.