Shipping globally relies on sea freight also referred to as ocean freight. Sea freight helps
businesses across the globe to move goods from one place to another. This option in shipping
is a popular method of shipping due to the affordability and the ability to move freight long
distance.
Shipping via sea freight can be cost-effective for especially those businesses that ship oversized
or heavy cargo. Moving this type of freight via air freight would be very costly therefore
companies look at sea freight as their shipping method.
The most popular method of shipping sea freight is through shipping containers which are
shipped in 20 or 40 foot containers. There are also specialized containers for companies who
transport liquid or hazardous material.
Understanding Sea Freight Terms
These are some key terms that are used frequently in the shipping industry. For ocean freight,
or sea freight, these terms are used to prepare key documents.
Bill of Lading (B/L)
This is an important document that is issued by the carrier. It contains full details of the shipper,
the buyer, and key shipping information.
Freight Forwarder
A freight forwarder is someone that helps to arrange shipments for companies looking to import
or export goods. They provide guidance, handle customs and documentation, and handle your
overall shipment details.
Consignor (Shipper)
The consignor, or the shipper is the company that is shipping the goods. This is usually the
exporter.
Consignee
The consignee, or the buyer, is the company that is receiving the goods. This is usually the
importer.
Full Container Load (FCL)
FCL means full container load. This is where the entire container belongs to one shipper. This is
one of the most common shipping methods of sea freight services.
Less Than Container Load (LCL)
Another common shipping method in sea freight is LCL, meaning the container is shared with
other shippers. This involves consolidation of cargo and is a good option for small to mid size
companies that ship smaller quantities.
TEU (Twenty-Foot Equivalent Unit)
Shipping required to ship in a 20 or 40 foot container. A TEU is used as a unit of measurement
for container capacity. One 20 foot container equals one TEU and one 40 foot container equals
two TEUs.
Port of Loading (POL)
The port of loading is the place where the cargo loads the ship.
Port of Discharge (POD)
The port of discharge is the port where the cargo unloads the ship
Incoterms
Incoterms are internationally recognized trade terms that define buyer and seller obligations
Tariff
A tariff is a fixed cost plus additional charges that a shipping line applies to the cargo
Demurrage
Demurrage fees are charges that are applied to a shipment if it remains at the port longer than
the free time allowed by the shipping line.
Detention
Detention fees are charges that are applied to a shipment if the container is not returned back
empty to the port within the allocated free time.
Free Time
Free time, or Last Free Day, is the period in which you can pick up your container from the port
without being charged demurrage fees.
Customs Clearance
This is often handled by your broker who is knowledgeable in customs rules and regulations.
They file the custom entry closer to arrive at the destination port and inform the buyer of duties
on the goods that need to be paid to customs
HS Code (Harmonized System Code)
An HS code is used internationally to classify the goods. This helps in determining duty cost and
any regulatory requirements on that product.
Container Yard (CY)
A container yard is an area within the port where containers are loaded or unloaded to/from the
vessel.
Transshipment
A transshipment port is a place where the cargo is transferred from one vessel to another before
reaching the final destination port. Some carriers, or shipping lines, use more than one
transshipment port.
Understanding How Sea Freight Works
Sea freight is a process that includes multiple stages to ensure cargo moves safely from point A
to point B.
First, the shipper packs and prepares the cargo. The goods are then loaded onto the shipping
container where it is then transported to the port of loading to load the vessel. Once the cargo is
loaded on the vessel, it departs for the final destination port which can takes days or weeks to
reach depending on the destination.
After the cargo has reached its final destination, it is unloaded from the vessel at the destination
port, has to clear customs, and can be transported onward, usually by truck or rail, to its final
delivery location. A knowledgeable forwarder can help to facilitate the movement of goods in a
timely manner.
Advantages of Sea Freight Services
Here are some of the benefits of using sea freight services for your cargo:
●Shipping capacity – sea freight offers better shipping capacity especially for large
shipments.
● Cost effective – compared to air freight, sea freight is significantly cheaper. A very ideal
option for companies who move large volumes of goods.
● Less restriction – sea freight has lesser restrictions than shipping via air freight. For
example, shipping HAZ cargo via air has many restrictions and may not even be
allowed.
Challenges in Sea Freight Services
While there are advantages to sea freight there are also some disadvantages. Below are few
disadvantages of sea freight services.
● Transit time – The transit time in sea freight is longer than air freight. This might not be
suitable for shipments that are urgent.
● Shipping Challenges – these could be due to weather conditions, port congestions, or
custom delays that can add extra days or weeks to your transit time.
When to Choose Sea Freight Services
If shipping heavy, bulk cargo or just choosing a cost effective shipping method is your
requirement then consider using sea freight.
When shipping large or heavy goods
Ocean freight can handle oversized, bulky, or heavy cargo that would be expensive to ship by
air, such as machinery.
When keeping shipping costs low is a priority
Sea freight is much more affordable than air freight, which is a great method for shipments that
are not urgent.
When transporting high volumes of cargo
If you are moving a large number of shipments, ocean freight offers better capacity and
affordability.When delivery timelines are flexible
Ocean freight does have longer transit times, so it’s best for shipments that are not time critical.
Final Thoughts
Sea freight services is a top choice for shipping globally. Understanding the requirements of
shipping via sea and how sea freight works can help businesses make the right decision that
can help avoid costly mistakes. Whether you are shipping small volume or large shipments,
understanding the basics of sea freight is essential for all businesses to understand.
Consider Terralink Logistics for your next shipment. Our team provides reliable sea freight
services for both imports and exports, backed by the experience and expertise to manage your
shipments smoothly. Get in touch with our team today to discuss your shipping needs.