What is international ocean freight?

Freight transported by ship is increasingly in demand. Its price, the possibility of reaching the world’s main logistics ports and its versatility are the main positive aspects to take into account. However, many people, even companies, are still unaware of what sea freight is in the logistics chain. In this post, we provide all the details.

Characteristics of international sea freight

International ocean freight can be defined as the most important cost in the entire ocean freight chain. Exact quantities as well as conditions of the shipment are usually specified in the shipping quotation of the freight itself, prepared in any case by the brokering companies or the freight forwarder who will facilitate the shipments, also between shippers and shipping lines.

Thus, international freight is the cost associated with transporting containers from one port to another, either 20 or 40-foot containers (the cost of freight varies, according to the capacity).

It is important for all organisations to be aware that there are different surcharges and concepts that are associated with the international ocean freight quotation, in addition to the aspects that influence the cost of the same, which we review below.

What influences the price of ocean freight?

Freight rates are determined, among other things, by the demand and supply in the countries of origin and destination of the goods. For example, if containers of grain return empty from a continent, the cost of freight will be higher as there is no export demand at destination. However, in recent years, if this is the case, freight rates have been lowered to boost export activity.

It should be noted that not all shipping companies offer this service and, in addition, the total amount of the freight will depend on the option chosen: whether it is door to port, door to door, port to door…

There are also clauses that can increase the cost of freight if certain conditions are met. In view of this fact, the ideal is to take out insurance to cover certain circumstances, something that is already common in most organisations.

At this point, it should be noted that there are two essential modalities that will determine the way in which the container is loaded, which will depend on the goods to be transported: FCL and LCL freight.

FCL Ocean freight

FCL refers to the use of full containers for a single load. Companies tend to contract this type because of its high versatility and cost-effectiveness, especially when handling volumes of more than 15 cubic metres. Many shipping lines charge a flat rate per container, which greatly simplifies operations.

FCL also provides extra security for the cargo, since it is usually sealed and belongs to the same owner. Moreover, it often results in faster deliveries, as the containers will go directly from the port of origin to the port of destination without having to make stops at intermediate ports.

LCL Ocean freight

The alternative to FCL is LCL freight, which is suitable for shipments with small cargo volumes. Goods of moderate volume are stored together from several shippers for the sole purpose of filling several containers.

However, the delivery of the goods is not usually as fast, since it makes stops at several ports. However, if you are not in a hurry for delivery and you want a more economical shipment, this is the best option, as it is more economical due to the sharing of costs. In these cases, the freight is calculated per tonne of cargo, so each company will only pay the cost of moving its goods.

Pre-shipment costs

There are, as can be seen, expenses derived from the sea freight quotation but, in addition, others must be incurred in the process prior to the loading of the goods on the ship, which are the following:

• Land transport until the goods arrive at the port of origin.
• Cargo Fees (T-3 Tariff).
• Terminal Handling Charge (THC).
• Customs clearance.
• Issuance of Bill of Lading.
• Bank losses from financial transactions.
• BAF (Bunker Adjustment Factor) for fuel price adjustments.
• CAF (Currency Adjustment Factor) for currency rate variations.
• IMO surcharge for hazardous goods.
• CS (Congestion Surcharge).
• CSF (Security Surcharge).
• Extra costs (e.g., container cleaning, seals, documentation, packaging).

Remember that SuiscaGroup offers everything that a ship may need in its stopover, so now that you know what sea freight is, we can adapt to everything you need or, directly, to your requirements. Moreover, as you have seen, international sea freight and its rates depend on different causes.