MANYShips

Full container or shared space

With a full container load (FCL), you pay for the whole box whether or not you fill it, and it usually stays sealed until destination. With less than container load (LCL), a consolidator combines your cargo with other shippers’ goods and charges by volume or weight, whichever works out higher. LCL suits small shipments but adds handling, warehouse fees at both ends and the risk of delay if another shipper’s cargo is held.

As a rule of thumb, price a 20-foot container alongside LCL once a shipment reaches about 13 to 15 cubic meters. Standard sizes:

• 20-foot: about 33 cubic meters, suited to heavy goods that reach the weight limit before the space runs out.
• 40-foot: about 67 cubic meters, and often well under twice the price of a 20-foot.
• 40-foot high cube: the same footprint but about a foot taller, roughly 76 cubic meters, for light, bulky cargo.

Who handles your cargo

Knowing who does what tells you whom to call when something stalls. In the United States, the Federal Maritime Commission licenses or registers forwarders and NVOCCs, and CBP licenses customs brokers.

• Shipper: the party sending the goods, usually the seller or exporter.
• Consignee: the party receiving them, often the buyer or importer.
• Freight forwarder: arranges the move, books space and coordinates documents.
• NVOCC: a non-vessel-operating common carrier that issues its own bills of lading but operates no ships.
• Carrier: the ocean line that runs the vessels.
• Customs broker: prepares and files import entries and calculates duties.

The documents that travel with a shipment

The commercial invoice lists the seller, buyer, goods, quantities, value, currency, terms of sale and country of origin, and customs relies on it to assess duty. The packing list gives counts, weights, dimensions and marks for each package. A certificate of origin states where the goods were made, which matters when claiming a lower duty rate under a trade agreement.

The bill of lading is the carrier’s receipt for the goods and evidence of the contract of carriage. A negotiable, or original, bill of lading also controls the cargo: whoever holds the originals can claim it, which protects an unpaid seller. A sea waybill is non-negotiable and releases the goods to the named consignee without paper originals, which is faster when buyer and seller already trust each other.

Incoterms divide cost and risk

Incoterms are standard trade terms published by the International Chamber of Commerce. Write the rule, the named place and the edition into your contract, since each rule shifts cost and risk at a different point. For container cargo, the ICC notes that FCA (Free Carrier) often fits better than FOB, since containers are usually handed over at a terminal before loading.

Four common rules:

• EXW (Ex Works): the buyer handles nearly everything from the seller’s door, even export clearance, which can be hard to arrange from abroad.
• FOB (Free On Board): the seller clears export and loads the goods aboard, and risk passes once they are on the vessel.
• CIF (Cost, Insurance and Freight): the seller pays freight and minimum insurance to the destination port, yet risk passes at loading in the origin port.
• DDP (Delivered Duty Paid): the seller delivers to the buyer’s door and pays import duties and taxes, so it must be able to clear customs there.

U.S. import basics

For ocean cargo entering the United States, the importer must submit an Importer Security Filing to U.S. Customs and Border Protection (CBP), often called 10+2 because the importer supplies ten data elements and the carrier two. It is due at least 24 hours before the cargo is loaded aboard the vessel at the foreign port, so you need details from your supplier early; late or inaccurate filings can draw penalties.

Most commercial shipments are formal entries that require a customs bond, either a single-entry bond or a continuous bond covering a year of entries. Duty depends on the item’s classification in the Harmonized Tariff Schedule of the United States, its origin and any added tariffs, which have changed often, so confirm the rate close to purchase. An unclear classification can be settled with a binding ruling from CBP. Some goods are also regulated by other agencies, such as the FDA for food, and wood packaging must meet the ISPM 15 standard.

The costs a freight rate leaves out

An ocean rate covers moving the box from port to port, and often little else. Line up trucking and unloading before the vessel arrives, since some charges accrue daily, and know that the Federal Maritime Commission takes complaints about improper demurrage and detention bills.

Compare itemized door-to-door estimates that include these charges:

• Surcharges for fuel, peak season and currency, which can change between booking and sailing.
• Terminal handling charges at both ports.
• Demurrage, charged when a full container sits in the terminal past its free days.
• Detention, charged when you hold the carrier’s container outside the terminal past its free days.
• Drayage, the trucking between port and warehouse, plus chassis fees.
• Broker fees, duties and CBP fees, such as the Merchandise Processing Fee and Harbor Maintenance Fee.

Insurance and planning for delays

Under the U.S. Carriage of Goods by Sea Act, a carrier’s liability is generally capped at $500 per package unless you declare a higher value, and many causes of loss are excluded altogether. Cargo insurance covers far more, including general average, under which every cargo owner shares the cost of sacrifices made to save a ship and its cargo in an emergency, usually posting security before release, even if their own goods arrived intact.

Schedules slip as well. Carriers cancel sailings, roll cargo to the next vessel and skip ports, and a customs exam can add days or weeks. Build buffer time into every plan, especially ahead of peak retail season and around Lunar New Year, when many factories in China and elsewhere in Asia close for a week or more.