With an estimated size of more than $30 billion USD—and an impact on just about every industry conceivable—it’s hard to overestimate the importance of international freight shipping.
The carriers, freight forwarders, logistics managers, and other supply chain professionals who handle international freight shipping play a key role in keeping the world economy running, supplying both businesses and, ultimately, consumers.
If you’re considering going into international freight shipping, we’ll walk you through what you need to know. Moving cargo internationally can be a path toward expanding your customer base, uncovering additional sources of revenue, and scaling your business to a new level. This step-by-step guide will help you execute your first few cargo shipments quickly, easily, and efficiently so you can make the most of your freight budget.
Must-Knows for International Freight Shipping
First, let’s cover the key terms and concepts you need to know when moving cargo internationally.
International Freight Shipping: Modes
You’ll have a couple of different modes to choose from when shipping your cargo internationally. Each has its pros and cons, so select carefully. Additionally, to get your cargo all the way from origin to destination, you’ll likely leverage several of these modes, so it’s good to be familiar with all of them:
Air Freight
Air freight offers you two main advantages: 1) it’s generally the fastest way to move freight and 2) it subjects your cargo to minimal handling. Keep in mind that you’ll have a several service levels to choose from, including the most cost-effective option: air freight consolidation.
Ocean Freight
Ocean freight is your most budget-friendly option for moving goods internationally, although it offers the slowest transit times.
Ocean freight service falls into two categories:
- FCL: Full-container-load service, usually reserved for larger cargo shipments. If you’re moving high-value goods, you may decide to choose FCL service, regardless of your shipment’s size. FCL service guarantees that your cargo gets its own, dedicated container for maximum protection and security.
- LCL: Less-than-container load service, also called a consolidation. Freight forwarders offer this service, collecting smaller loads headed to the same destination to create a full load. If you don’t have enough to fill a container, LCL service offers a cost-effective shipping method for smaller international freight loads.
Not sure whether air freight or ocean freight is right for your shipment? Check out our guide to ocean freight vs. air freight.
Rail Freight
Rail freight can be a cost-effective method to move freight across long distances—and it can also lighten your environmental footprint. Where international shipments are concerned, rail often is leveraged as part of an intermodal solution that combines rail transportation with another mode, such as ocean freight.
Trucking
Trucking (a.k.a., road freight) will also play a role in your international freight shipment. Trucks will move your shipment to/from a forwarder’s warehouse; to/from the airport/seaport; and to/from the final destination. Although it may not be the primary mode of transportation for most international freight, trucking offers a vital link that keeps your cargo moving.
International Freight Shipping: Key Players
As you dive into the world of international freight shipping, it’s critical to know who’s who—and how the logistics industry refers to each party:
Shipping
The person who’s packing and preparing the shipment to turn over to the carrier. (Think of the “from” line on a package. That’s the shipper.)
Carrier
The party actually moving your cargo: the steamship line, the trucking company, or the airline, for example.
Consignee
The person who’s designated to receive the shipment. (Think of the “to” line on a package. That’s the consignee.)
Freight Forwarder
An individual or a business that organizes shipments on behalf of their clients. Freight forwarders act as intermediaries between shippers and carriers to coordinate freight movement from origin to destination.
Customs Broker
An individual or a business that facilitates the clearance of shipments through customs. Customs brokers may represent either shippers or consignees in clearing cargo.
Who Pays for What? Know Your Incoterms
As you arrange your first international shipment, you’ll need to negotiate who pays for what. For example, if you’re buying a container of goods from a vendor in China, you’ll need to agree on who pays for the ocean freight, trucking, insurance, etc. The same is true if you’re selling a container of goods to a customer in Mexico.
That’s when you turn to the Incoterms® rules, a simple way for buyers and sellers to dictate who will pay for loading and unloading costs, customs export procedures, insurance, freight charges, import costs, and more.
Discover the 5 most common Incoterms. We’ll show you how each impacts your expenses and, in turn, your profits.
International Freight Shipping: Cost Considerations and Surcharges
The cost of an international freight shipment hinges on factors such as: what you’re shipping, where you’re shipping it from, and how fast you need to get it there. This is where a solid relationship with a good freight forwarder can come in handy. Your forwarder can help you run a few different scenarios so you can choose the right mode for your shipment—and your budget.
A couple of things to keep in mind as you plan (and price out!) your international freight shipment:
- Balance cost and speed – In general, the faster your shipment needs to move, the more expensive the freight cost. Planning ahead will help you manage your expenses effectively.
- Plan early for peak demand – If you’re moving cargo related to a busy retail shopping season, such as the holidays or back to school, a freight forwarder can be an essential partner for avoiding shipping delays and managing freight costs. If you’re ordering from suppliers in Asia, it’s also important to keep Lunar New Year in mind to avoid delays and price fluctuations.
- Know your landed cost – If you’ve ever seen an ocean freight invoice, you know that it often contains a number of extra charges, which is standard practice for the ocean freight industry. Drayage, fuel surcharges, terminal handling charges, wharfage, etc. are all a part of shipping ocean freight. (See a full list of ocean freight charges here.) Make sure that any quotes you review include all potential charges so you can calculate your all-in cost.
Now that you know the basics, let’s walk through the step-by-step process for shipping freight internationally.
How to Ship International Freight in 7 Steps
Step 1: Choose the Right Mode of Transportation & Prepare Your Shipment
As you solicit quotes, keep your ideal timeline—and budget—in mind to guide you as you decide which transportation mode is right for your shipment. As a quick reminder:
- Air freight: Best for time-sensitive shipments, high-value shipments, and lightweight shipments.
- Ocean freight: Likely your most cost-effective mode. Well-suited for large or heavy shipments. Ocean freight may be your only option for certain types of hazardous shipments.
Packaging Your Shipment
Once you decide on how you’ll move your international freight shipment, your next step will be packaging it properly:
- When you’re shipping via air freight, it’s important not to over pack, since your shipment’s weight and volume both impact your cost. Check out our best practices for shipping and packaging air freight.
- When it comes to ocean freight, keep in mind that your shipment will be subject to a number of different forces along its international journey—loading and unloading, waves, wind, etc. Make sure you package your freight carefully so your freight arrives in perfect condition.
For more on proper packaging, check out our tips for avoiding costly freight damage.
Documentation
Proper paperwork is critical for international freight shipments so your freight 1) can be correctly routed by each carrier and 2) clear any import, export, or customs procedures along the way.
Your freight forwarder will help make sure that you have all your documentation in order. In general, expect to supply:
- A commercial invoice, which provides vital information about what you’re shipping, including the quantity and value of the items in the shipment. Government agencies will use this invoice will be used to determine any duties or taxes owed.
- A bill of lading is a document your forwarder will create, using the information you supply. This document lists the shipper and consignee, as well as any special shipping instructions, etc. The bill of lading essentially acts as an agreement documenting the movement of your goods.
- A packing list with all the details of the shipment, including quantities, dimensions, and weights.
- A certificate of origin that shows the country of manufacture. This document will be crucial for customs clearance, as well as for determining any potential tariffs.
You may need additional documentation, depending on the nature of your shipment. For example, if you’re shipping hazardous materials, you may need to provide a material safety data sheet (MSDS).
Ask your freight forwarder for assistance regarding the necessary documentation for your international freight shipment.
Step 2: Accept Your Quote & Get Your Freight in Motion
Once you’ve decided how you want to send your international freight shipment, you’ll formally accept the winning quote. This gives your forwarder the green light to officially book your freight with the carriers who will move it.
Don't Forget to Ask About Insurance
Talk to your freight forwarder about your cargo insurance options. As your freight travels from origin to destination, damage is always a possibility, despite all parties’ best efforts. Insurance can offer you significant peace of mind against the financial losses arising from damaged or lost cargo.
Keep in Mind: Certain Incoterms, such as CIP and CIF, dictate which party pays for insurance and define the type of coverage required. Pay attention to the Incoterms in your contract so you stay compliant with your agreement—and avoid accidentally paying for duplicate coverage.
Once all the paperwork is signed and completed, your freight shipment can start moving:
- If you’re the shipper, you can make the freight available at your warehouse for pickup or you can choose to drop it off yourself at your forwarder’s warehouse.
- If you’re the consignee, your vendor/supplier will take care of this process, sometimes known as export haulage.
Next, your shipment will prepare to leave its country of origin.
Step 3: Export Procedures: Taxes & Customs Clearance
The exact export process for your shipment will differ, depending on the country of origin. In many cases, your shipment will go through some type of export procedure, which may include some kind of inspection or screening. If there are any export duties and taxes, they’ll need to be paid at that time. (Using Incoterms can be an easy way to define who pays for these!)
If there are any snags, a customs broker can assist in getting them resolved.
Once your shipment has cleared its export procedures, it can move to the next phase—such as an airport or a seaport—and begin its voyage.
Step 4: Tracking Your Shipment
Talk to your forwarder about monitoring your shipment during its journey from origin to destination. Your forwarder may offer you access to an online portal that allows you to keep an eye on your shipment’s progress.
It’s also a good idea to ask your forwarder to confirm the email address and phone number for your point of contact, in case you have any questions along the way.
Step 5: Import Procedures: Taxes & Customs Clearance
Once your international freight shipment reaches its destination country, it will need to clear through that country’s customs authority.
Exact procedures will vary based on the destination. However, the shipment will likely be screened for security purposes—and for compliance with the destination country’s regulations.
That inspection may be relatively quick. In some cases, shipments may be held for further inspection. Shipments may also be held in the destination country because of incomplete or incorrect paperwork.
As with export procedures, a customs broker can assist if there are any snags during the import process.
Step 6: Final Delivery
Once your shipment has cleared customs, your forwarder will arrange to move it to a nearby warehouse. (You might hear this called import haulage or drayage.)
From there, your forwarder will coordinate with other carriers to get your shipment to its final destination. For example:
- Your shipment might be transloaded onto a truck, headed for the final destination.
- Or, if you’ve chosen an intermodal solution, it might first be loaded onto a train for the next leg of the journey, and then loaded onto a truck for final delivery.
Inspect Your Freight Carefully on Arrival
If you’re the consignee, make sure to inspect your freight for damage immediately on arrival so it can be noted on your bill of lading. It’s important to report damage as soon as possible to facilitate an efficient claims process.
Step 7: Evaluate & Optimize
Finally, when all is said and done, take a few moments to evaluate your international freight shipping experience:
- What went well?
- What could have gone better?
- What will you do differently next time?
Make notes for your next international freight shipment so you can start to optimize your logistics and streamline your processes to save yourself both time and money.
You might also consider sharing these insights with your freight forwarder. This will give them the opportunity to share their perspective—and their own insights—to help you create even more efficiencies for the future.
Your Next Steps in International Freight Shipping
The first few times, shipping international freight can feel complex. With the right knowledge—and the right experts at your side—international freight shipping can become a natural part of your logistics flow. Now that you know the basics, your next step will be to partner with a solid freight forwarder. Together, you can build a standard set of processes to streamline your international freight flow.
Want to talk about your next international freight shipment? Our experts would be happy to help! Just reach out for a complimentary quote, and leave the logistics to us. We’ll help simplify your next international freight shipment.
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