How many times have you used ocean freight services for transporting your goods? Most popular as Sea Freight, the ocean freight shipping process is a broad term used in the shipping industry that you must understand before starting. If you are just starting with these services, this blog will be a great help for you. Here you will find what ocean shipping is, how it works, the different incoterms, and does it suit your needs. So, let’s get started:
What is Ocean Freight Shipping?
Popularly known as Sea Freight, ocean freight shipping is a process of transporting goods internationally through the ocean. Shippers get several options to ship their goods using the sea freight method, and it is considered the most cost-effective and durable shipping option for the freight forwarding process. Sea freight is the most popular shipping option for businesses transporting bulk and heavy-duty goods.
Different Ocean Freight Shipping Types
One of the most popular sea freight options shippers use is container shipping to move their goods efficiently. Containers offer an extra layer of protection to shippers’ goods to move their goods without much hassle. There are two types of container shipping options shippers have in front of them, including LCL or FCL.
Under FCL services, shippers can get their goods delivered in a single container without mixing them with others. This is one of the most suitable options for those who want to ship several goods together at a single location. In this, your goods will be transported undisturbed without sharing with anyone.
LCL shipping is considered one of the shippers’ most preferred shipping services to transport goods in low quantity. One of the top reasons to choose this method is you don’t have to buy the whole container to ship only a small package. It offers the most economical choice for the shippers who don’t want to buy an entire container for their goods. Under this, you have to pay only for the space your package takes in the container.
How does Ocean Shipping work?
Ocean shipping is the most complex job in the shipping industry that requires the right skills and knowledge to get the most efficient services. That is why most of them prefer partnering with a reliable shipping company like SLR shipping services to get the goods delivered safely and cost-effectively. The shipper signs a contract with the logistics company to get their goods delivered safely, and they will take care of the rest. All the functions of the ocean freight services, such as packaging, warehousing, inventory management, order processing, order fulfillment, etc., are handled by them.
The Basic Incoterms Used in Ocean Freight
Before you get into the ocean freight business, there are many incoterms you must be aware of. The sea freight industry consists of the various incoterms you must know before getting into the process. Here are three basic incoterms you must know before you begin shipping your goods:
Free on Board (FOB)
The free on board (FOB) agreement is signed between the seller and buyer to share the responsibility for goods. Under this, the sellers take responsibility for the processes, including packaging, labeling, and loading the goods before the transportation process. Afterward, the buyers shift the burden as soon as the goods get loaded on the vehicle.
EXW (Ex Works)
Under Ex Work’s agreement, the sole aim is to transfer the risk to the actual buyer of the goods. When buyers purchase the goods from the manufacturer, the entire responsibility is shifted to them. All the risks ranging from transporting the goods to the actual delivery become buyers’ responsibility.
DDP (Delivery Duty Paid)
In DDP, buyers and shippers get into an agreement to share the responsibility for the risks associated with the transportation of goods. Here, the aim is to transfer the maximum risk incident to the seller. Under this, all the significant risks, including shipping costs, goods insurance, and inland transportation, are transferred to the seller.