When you’re looking to grow your business or enter a new marketplace, ocean freight can offer you a cost-effective method for importing and exporting goods. This is especially true if you work with a freight forwarder who can offer you consolidation options. (More on that in a moment!)
Many of our customers who are new to ocean freight tell us that it can feel intimidating. Others simply have questions around the logistics—sailing schedules, packaging concerns, container sizes and more.
In this article, we’ll bring clarity to six ocean freight concepts that cause the most confusion. If you’re new to this shipping method, you’ll get a solid overview of how ocean freight works. If you’re already using ocean freight, you may discover something new to help you take full advantage of this cost-effective shipping option.
Ocean Freight Surprising Fact #1: You May Not Need a Full Container
When many companies enter ocean freight for the first time, they assume they’ll need to reserve a full container for their shipment. Although you can certainly move goods by full container load (FCL), you can also find freight forwarders who will help you ship less-than-container loads (LCL).
How do LCL shipments work? If you go the LCL route, you’re becoming part of a consolidated load, in which your freight forwarder combines a number of smaller shipments to make up a full container.
Ultimately, this option can help you save on shipping costs. You’ll secure a lower cost right out of the gate just by being part of a consolidation, as opposed to shipping a full container on your own. Additionally, forwarders are always looking for a mix of freight. Your shipment might be the missing puzzle piece they need to balance their load. As a result, you may get a great rate for your shipment.
That leads us to the next concept, which causes a lot of confusion—although it doesn’t have to!
Ocean Freight Surprising Fact #2: The Pricing Isn’t That Complicated
Because ocean freight can involve a few types of transportation—truck, rail and boat to name a few possibilities—you might think the pricing model is complicated.
However, when it comes down to it, by and large, LCL shipments are priced according to how much space you’re taking up in the container. In other words, your price is based on the volume of your shipment in cubic feet.
If you haven’t calculated the volume of an object since you were in school, it’s pretty straightforward. The formula is as follows:
The Formula for Calculating the Volume of Your Shipment:
Length (in feet) x Width (in feet) x Depth (in feet) = Volume (in cubic feet)
Of course, there are a few other variables that come into play. If you’re sending an extremely heavy shipment of decorative boulders or an extremely light one made up entirely of pillows, your rates will definitely vary. And, as we mentioned above, if your freight is of the type that a forwarder is particularly interested in to complete a load, you may get a price break.
However, as a rule of thumb, your price is most often based on a very simple concept: The overall amount of space you need in the container.
Now, that being said, you might be interested to know . . .
Ocean Freight Surprising Fact #3: There Are a Bunch of Charges Going on Behind the Scenes
If you were to ship directly with one of the main ocean freight companies like Matson or Pasha, you’d get a very detailed bill with all kinds of charges listed out: wharfage, terminal handling and Harbor Department of Transportation (Harbor DOT) fees. Often times, a freight forwarder will condense the number of line items for you so you can simply focus on the bottom-line cost.
However, one line item you’ll want to be aware of is the fuel surcharge. As the price of fuel goes up and down across the country—and the world—your forwarder may adjust your quote accordingly. This can cause considerable confusion, especially because the surcharges don’t always sync with the fluctuations you may see at the gas pump.
The bottom line is this: Fuel surcharges are a normal part of ocean freight shipping.
When you get a quote, ask about fuel surcharges so you can better understand your costs. You may also want to ask how long that quote is good for, as the fluctuation in fuel prices can mean last week’s quote is different this week.
The other thing you’ll want to educate yourself on—especially if you’re new to ocean freight—is how to protect your goods as they move across the ocean, which brings us to . . .
Ocean Freight Surprising Fact #4: You’re Probably Not Packing Your Goods Well Enough
Frankly, even experienced ocean freight shippers are prone to packaging mistakes.
The most important thing to realize is that shipments going via ocean freight need more protection than those going over road or rail.
After all, ocean freight is subject to a significant amount of motion. First, your shipment will be packed in a container that will be lifted by crane on and off the ship. Additionally, while the container is in transit on the vessel, it will be subject to the rocking and rolling of the Pacific Ocean all the way to its final destination.
To ensure that your shipment reaches its destination safely, you’ll want to take extra care in packing it right.
Some of the most common packing mistakes we see include:
- Poorly-constructed pallets
- Loosely wrapped shipments that will likely shift in transit
- Shipments that are haphazardly padded—or not padded at all
- Overhanging pallets
- Odd shapes that make handling and packing difficult
One of the other common mistakes we see is using the wrong size of pallet. Pallets constructed for containers need to be 40″ wide x 48″ long. Although other sizes, such as 48″ x 48″, are becoming more common for trucking, those types of pallets won’t fit side by side in a container. Ultimately, this means your shipment will take up more room, resulting in higher charges for you.
Once you’ve perfected the packaging for your ocean freight shipments, you’ll also want to master their timing.
Ocean Freight Surprising Fact #5: Ocean Freight Schedules Are a Little Different
Ocean freight operates on a unique schedule, one that has confused many a shipper. When it comes to the timing of drop-offs and deliveries, there are two things you need to know:
#1: Boats Have Sail Dates and Forwarders Have Cut-Off Dates
These dates are not usually the same. For example, a boat may set sail for Oahu on Wednesdays and Saturdays. However, the cut-off date to get on those shipments is likely Tuesday and Friday respectively. That way, your forwarder has enough time to get your shipment packed and delivered to port. So when you ask about sail dates, make sure to ask about cut-off dates as well so your shipment gets loaded on time.
#2: If the Boat Arrives on Tuesday, That Doesn’t Mean You’ll Get Your Shipment on Tuesday
Once a boat arrives in port, it has to dock, then the ship has to get unloaded, then the shipments have to be deconsolidated and organized for delivery. This can take up to 48 hours—or more. So when your tracking dashboard lists the vessel as having arrived, know that there is additional behind-the-scenes work to be done before your shipment will be scheduled for delivery.
Now, although some of the issues we’ve raised in this article can sound confusing on their face, the last thing you’ll want to know is . . .
Ocean Freight Surprising Fact #6: Ocean Freight Is Not as Complex as You Might Think
Once you know the main concepts, most of which we’ve covered in this article, ocean freight is a fairly straightforward and budget-friendly way to import and export goods.
At the end of the day, the right freight forwarder will make ocean freight even easier for you.
Look for someone who can help you come up with creative and flexible solutions for moving your goods within your budget. You’ll also want to find someone who’s willing and able to answer your questions so you can feel confident leveraging this shipping method.
After all, ocean freight can offer your business a huge growth opportunity. Once you understand how it works, you’ll find yourself positioned to take advantage of its ability to connect you with new buying opportunities at a price that can work for almost any business.
If you have more questions about ocean freight, feel free to reach out to us. We’d be happy to talk you through the ins-and-outs of making this shipping method work for you.