WHAT IS OCEAN FREIGHT
Goods are packed in shipping containers, the freight forwarder books the space or container with the ship agent, cargo is trucked to the shipping line at the port of origin and shipped overseas to the importer at the port of destination. The itinerary can be port-to-port or can include truck pick up and or delivery, door-to-port, port-to-door and door-to-door.
Ocean freight versus air freight
Airfreight is much faster, but more expensive than ocean freight. The size of the cargo will determine the feasibility of airfreight versus ocean freight.
Some cargo is restricted from airfreight so it must be shipped by ocean freight. Perishable cargo may have to travel by air to keep from spoiling during the shipment.
In ocean freight, incoterms – standardized shipping term sheets – determine the shipper and consignee’s contractual obligations and financial responsibilities. Those terms provide guidelines as to which party, between the importer and the exporter, is responsible for the shipping arrangements and assign the liability for each step of of the itinerary, whether it is door-to-door, port-to-port, or door-to-port. This process also determines who has to insure the cargo. If you are financing your transaction with a Letter of Credit (LC), the bank will verify that the incoterms have been met before releasing the funds. In other words, incoterms dictate when the ownership of the cargo is transferred to the consignee.
What is FCL shipping?
FCL shipping is a type of ocean freight and the term FCL refers to full container load. Shipping FCL does not mean you need to have enough cargo to fill an entire container. You may ship a partially filled container as FCL. The benefit is that your cargo will not share a container with other shipments, like it would happen if you picked as a less than a container load (LCL). It is common for exporters and importers to ship their cargo in a half full or partially full containers, due to time constraints, deadlines or to protect their cargo from contamination of other cargos. Often a partially full container is less expensive to ship because there will be none of the consolidating and handling fees associated with loose cargo, as in an LCL shipment. The rule of thumb is, if you are shipping 6 standard pallets in a 20ft container, 12 standard pallets or more in a 40ft container, it might be cost effective to ship your cargo as an FCL shipment, full container load, rather than LCL shipment, less than a container load.
Most FCL shipments are door-to-port, but it is possible to ship FCL port-to-port, port-to-door, or door-to-door. In the export and import business, the shipper is usually responsible for the door-to-port and the consignee is responsible from the port of destination to his warehouse. However, Incoterms will determine how obligations and financial responsibilities are divided between the exporter and importer.
A standard container, both 20ft & 40ft, have a door opening of 2.34m width (7’8”) x 2.28m (7’6”) height x 5.898m (19’4”) length.
A 20ft container will fit 10 standard pallets or 12 Euro pallets on the floor of the container, 20 standard and 24 Euro, for a 40ft container. This is assuming that the pallets cannot be stacked.
There are many types of containers: standard dry containers, flat rack containers, collapsible flat rack containers, refrigerated containers, and tank containers. Each type has a specific application and is available in several sizes. The most common containers are:
- 20 ft. standard dry
- 40 ft. high cube dry
- 45 ft. high cube dry
- 20 ft. open top
- 40 ft. open top
- 20 ft. refrigerated
- 40 ft. refrigerated
- 20 ft. flat rack
- 40 ft. flat rack
Contact our shipping experts to make arrangements for non standard containers.
What is LCL shipping?
It is possible to make small ocean freight shipments called LCL (less than a container load) for import and export.
When shipping LCL, cargo is consolidated with other shippers’ goods to fill a container. The price is determined by volume and weight. You are charged only for the space the cargo occupies in the container. Excess weight becomes a factor when your shipment is trucked to and from the port
LCL shipments are facilitated by a non-vessel operating common carrier (also known as an NVOCC). 101 New York Logistics is an NVOCC, having been accredited by Philippine Shipper’s Bureau (PSB).
NVOCC’s reserve full containers from shipping companies based on traffic volume forecasts to different destinations. They are then able to offer space in the containers for small shipments at a reduced rate compared to a FCL(full container load) shipment.
LCL Shipping Frequency
LCL shipments to major ports occur weekly or bi-weekly. Shipments to secondary ports are less frequent and may run every 2-3 weeks depending on the destination. This will sometimes result in a waiting period for the container to be filled.
When shipping to secondary ports, your cargo may be off loaded at a trans- shipment point, where it will wait for more cargo to fill the container, before continuing to its final destination.
Palletizing Your Shipment
In order to ship LCL, the goods must be palletized. If you are shipping boxed, crated or loose cargo, it must be place on pallets.
Shipping loose cargo
To ship loose cargo it must be packed in cardboard boxes and or packing material and placed on pallets. Furniture and items that do not fit in boxes are also considered loose cargo and must be wrapped in plastic and also placed on pallets.
Shipping boxed cargo
Boxed cargo will be goods that are packed into wood crates or plywood boxes which are then placed on pallets. Any wood used in packing or pallets must be heat treated and have a visible stamp verifying ISPM 15 exemption.
There are two types of pallets: Standard (1.2m/47 ¼” X 1m/39 ⅜”) and Euro (1.2m/47 ¼” X .8m/31 ½”.)
It is important to know which pallets you are using and if your cargo is stackable in order to calculate your shipping charge.
LCL Shipping pricing
The price of an LCL shipment is calculated by destination, volume and weight. If volume is over 353 cubic feet, we recommend checking the price difference between FCL and LCL. It is generally more cost effective to ship FCL if volume is greater than 530 cubic feet.
In order to ship LCL there must be a consolidating warehouse at the port.