A Guide to International Shipping for Importers

global shipping for importers

International shipping is complicated and can be intimidating for new importers - but it doesn’t have to be! This guide breaks it down to help you choose the right shipping option, understand pricing and sneaky surcharges, and navigate customs clearance. Finally, we discuss how digital freight marketplaces are simplifying the international shipping game with advanced technology solutions. 

 

Demand for Imports and International Shipping 

 

International shipping has been on the rise for decades, as advances in communication, technology and transportation provided an opportunity for a more global, interconnected supply chain. Companies found cost-savings by sourcing materials and labor overseas, and began shipping raw materials and finished products across the globe en masse. This model ultimately created a flourishing market for low-cost consumer goods and products around the world. 

 

The COVID-19 pandemic unexpectedly drove increased demand for consumer goods, particularly in the U.S.  Economic stimulus payments led to immediate spending, but in patterns that were vastly different from pre-pandemic. Unable to spend money on services like restaurants, travel, and salons, Americans were shopping online for goods and products. Consequently, direct-to-consumer and e-commerce sales soared, outpacing 2019 numbers by 32%. Many of those goods are manufactured overseas, so imports have been steadily rising for the last two years. Economic re-openings and easing of COVID restrictions seem to have done very little to slow import demand, so international shipping demand is likely to remain high.

 

What is International Freight Shipping?

There are two modes of transportation for shipping overseas – ocean or air. Which mode is best for your freight depends on several factors: urgency, cost, and shipment characteristics.

 

Air Freight

Air cargo is often used by global shippers when they need to get a shipment somewhere quickly and reliably. Speed is the distinct benefit of shipping by air instead of ocean – air freight arrives in days, while ocean freight takes weeks. Of course, the convenience and speed of air freight comes with additional costs, shipping by air is almost always more expensive than shipping by ocean.

 

Air freight rates are determined by the cargo weight and volume. It is important to note that carriers use several weight calculations when pricing air freight:

 

 

Note: volume must be calculated in meters and kilograms

 

 

Chargeable weight may seem confusing, but it is designed to create a more equitable pricing structure by taking into account the lightness or heaviness of cargo (actual weight) and the amount of physical space the cargo takes up (volumetric weight). If pricing was based strictly on weight, shipping a pallet of steel bars might cost more than shipping three pallets of cotton. Accounting for volume evens the playing field for heavy and light cargo shippers. 

 

Ocean Container Shipping

International shipping by sea accounts for approximately 90% of international freight, due in large part to its relatively low costs. Despite rising freight rates over the last few years, ocean freight remains the most popular method for shipping cargo internationally. 

 

There are two options for ocean freight, based on the cargo and amount of space needed: full container load (FCL) and less-than-container load (LCL). Let’s look at the specifics for each option and explain when to use one over the other. 

 

Full Container Load (FCL) 

As the name implies, FCL shipping allows you to utilize a full, dedicated container to move your goods. This option is typically used when shipping larger volumes of cargo, or bulky non-standardized freight like machinery. 

 

There are many equipment options for FCL ocean shipment, but three standard container sizes are most commonly used – 20’ general purpose, 40’ general purpose, and 40’ high-cube. Cargo volume determines which container is best-suited for a shipment - the chart below shows approximate capacity for each container option.

 

 

20’ / 20GP

40’ / 40GP 40HC
Cubic Capacity

1,156 CBF

32.7 CBM

2,367 CBF

67 CBM

2,619 CBF

74 CBM

Base Pallet Capacity

10 Standard

11 Euro

20 Standard

23-24 Euro

21 Standard

25 Euro


Weight is also important when selecting a container, but note that a container’s payload capacity is much greater than legal limits for road transport. A container may have a 55,000 lb (24,900 kg) payload capacity, but legal weight limits for hauling that container in the U.S. would limit the capacity to approximately 44,500 lb. Overloading an ocean freight import container can cause issues upon arrival and lead to additional charges for transloading or securing overweight permits for transportation. 

 

Less-than-Container Load (LCL)

LCL shipping means your cargo is shipped in a shared container with other goods that are moving in a similar trade lane. This option is used for smaller shipments (less than 6 pallets or 13 CBM) and rates work similar to air freight based on cubic volume and weight. LCL is generally less expensive than securing a full container when shipping small volumes, but tends to have longer transit times and more touch points in transit through transloading and potential warehousing. 

 

Weighing the Options: FCL vs. LCL 

FCL and LCL ocean shipping methods are both valuable in their own right, and offer benefits to shippers on a load-by-load basis. Specific benefits and attributes of both options are summarized here for quick comparison.

 

Full Container Load (FCL)

Less-Than-Container-Load (LCL)

Best when volume is more than 13 CBM

Best for shipments between 2 & 13 CBM

Allows for a lower per-item shipping cost

Allows for a lower per-item shipping cost when consolidated with other shippers’ goods

Fixed importing fees and trust that current import documentation is accurate to the best of your ability

Potential for additional importing fees or risk of inspection if one shipper’s import documentation is off

Lower risk of damage or lost freight

Risk of damage during handling, consolidation and loading

Complete control over the types of goods shipped in the container

Shipping with multiple other types of freight, such as corrosive materials or liquid goods

Increased security by ensuring your sole access to a container

Others working within your container

Best for urgent shipments

Requires more time to process and transport

 

Understanding the Costs of International Freight Shipping

 

Mode of transport and shipment characteristics impact international freight costs, but these are only two pieces of the puzzle. The global freight market follows the same supply and demand curve as any other economic market – with prices fluctuating based on demand for capacity and supply of available capacity. When capacity in any particular region or trade lane is constrained, as it is in most of the global market currently, shippers compete for a small amount of available space and freight rates increase. Additionally, with increasing port congestion and continued capacity issues, there are numerous surcharges that may be added to base freight rates, further escalating total costs. 

 

Surcharges & Fees to Know

International freight quotations are often divided into three sections, based on the level of service required. If door-to-door services are required, the quote will include all three sections to account for pickup charges at origin and delivery at destination. If the quote is only to move freight from port-to-port, only one section will be included.

 

Carriage 

Carriage charges are applied and calculated together to determine total ocean freight rates. These charges vary by carrier depending on service agreements and contracts with ship lines. It is important to understand how and why these surcharges are assessed, so we have provided more detail for this section.

 

 

 

 

 

 

 

 

 

 

 

Pre-Carriage & On-Carriage

Pre-carriage and on-carriage refer to is used to describe any movement at origin before the container in-gates at a loading port, or destination after the container is discharged at a port. These inland charges apply to shipments that require pickup and/or delivery and may include:

 

 

How to Control International Freight Costs

INTRO – another bullet about understanding freight lanes? 

 

 

 

 

 

The Role of a Freight Forwarder

 

When learning how to ship cargo internationally you need to understand the role of freight forwarders. Freight forwarders facilitate global commerce by piecing together shipping-related steps on your behalf. More than simply arranging inland and ocean transportation, freight forwarders also assist in order fulfillment, shipment consolidation, customs clearance, and documentation through a combination of providers. Freight forwarding differs around the world, depending on a country’s primary modes of transportation and their role in global trade, but usually include a combination of rail, truck, and sea routes to move goods.

 

Freight forwarders are like travel agents for freight, helping you find the right vendors and coordinating the journey to delivery. However, there are some common misconceptions around freight forwarding services, so let’s clear those up.

 

Freight forwarders generally do not physically move cargo.

Forwarders primarily act as intermediaries between customers and individual carriers, which is extremely valuable considering the number of carriers and vendors involved in moving a single shipment. Freight forwarders generally do not own assets (like ships or trucks) so they do not usually physically move cargo, but there are exceptions. Some forwarders may offer drayage or warehousing services in addition to transportation coordination and document processing. 

 

Freight forwarders are not freight brokers. 

On the surface, freight brokers and freight forwarders seem to play similar roles - both connect shippers to carriers in order to move freight - but there are key differences in what they can do. 

 

 

 

 

Overall, freight forwarders have more capabilities than freight brokers because they are able to arrange international freight and submit documentation on your behalf. 

 

Customs Clearance and Freight Release

 

Ocean shipping procedures are complex, even when working with experienced and reputable freight transportation partners. Customs clearance issues contribute to substantial delays in freight release and create major headaches for importers. It is essential to understand customs clearance and other factors that can delay freight release to keep your goods moving.

 

Customs

In short, customs clearance is the process of getting permission from a government agency to move goods out of a country (export customs) or into a country (import customs). It involves filing appropriate paperwork, paying taxes and duties as regulated by the national government, and passing any freight inspections. Below we answer some of the most frequently asked questions about customs clearance. 

 

Who pays for customs? 

In most international shipping agreements, the seller is responsible for export customs clearance, and the buyer for import customs. The exact arrangement depends on the international commercial term (widely known as incoterm) applied to the transaction, so it is important to review sales contracts and know transportation and customs responsibilities in advance. 

 

What documents do I need to clear customs?

Document requirements vary based on the country, but there are some standard documents that are necessary for the majority of clearance processes:

 

 

 

 

 

How long does customs clearance take?

Unfortunately, there is no global standard for customs clearance timing - but it is a good idea to start filing as soon as you have the necessary documentation. Many nations offer online systems for submitting customs documents, which substantially speeds up the process. When documents are complete, accurate, and consistent, customs clearance should be fairly quick – but any discrepancies or errors can lead to significant delays, so be diligent with paperwork!

 

Freight Release 

When freight arrives at the destination port it needs to be released before you can pick it up. Freight release is essentially an endorsement on the BOL that states all charges associated with the shipment have been paid. This protects shippers and transportation providers by ensuring they are  paid for goods and services before delivery to the buyer. Delays in freight release quickly lead to demurrage charges as containers sit at the port, adding unnecessary costs to your transportation budget. The easiest way to avoid these delays is to pay suppliers and transportation providers on time and before your freight hits the destination port. 

 

How Digital Marketplace Technology Streamlines International Shipping

 

Navigating international ocean logistics processes can be overwhelming, especially for infrequent importers or companies just entering the global market. Fortunately, digital freight marketplaces offer technology solutions that connect shippers and importers to the capacity they need, with support every step of the way. 

 

 

 

 

 

 

Introducing the FreightMango Marketplace

 

FreightMango is a digital managed marketplace that simplifies the international shipping process by instantly connecting shippers and importers to the capacity they need. They offer transparent, competitive pricing and help mitigate any unexpected surcharges and fees. On the backend, shippers and importers receive professional, digitized support and management throughout the transaction - helping them navigate the nuances of documentation requirements and customs processes. Contact FreightMango today to learn more about their groundbreaking digital solutions for international shipping and importing.