by A1 WorldWide Logistics | May 30, 2024 | Shipping Logistics, Supply Chain, Transportation
A vital consideration a shipper must make when transporting goods internationally is reducing ocean freight costs. Shipping by sea is the most common way cargo moves globally, accounting for over 90% of international trade. Despite its popularity, there can be numerous expenses that may confuse even the experienced shipper. While certain fees are unavoidable, there are specific ways that shippers can reduce the overall price of transporting by sea. Whether you are shipping as an individual or from a company, this can benefit your supply chain. Saving costs is especially important with recent market conditions and the rise in container rates. This article will explain the best ways to lower expenses.
How Do Carriers Calculate Shipping Costs?
Ocean carriers that move freight internationally have different ways of calculating costs. It is crucial to note that cargo has base rates that depend on the shipment type. Other volumes include the weight, volume, distance, origin, and more. The mode of transport is also a crucial consideration. For example, containerships transport sea freight in different ways, including FCL (full container load), LCL (less than container Load), and RoRo (roll-on/roll-off). There are also additional fees like fuel and special handling surcharges. When importing into a country, there are also port terminal handling charges and customs duties a shipper should know. Shipments can also have optional insurance costs for cargo damage or loss.
What Are The Most Effective Ways of Reducing Ocean Freight Costs?
While there are numerous ways to save on ocean freight costs, the most popular ways that shippers use include the following:
- Consolidating Shipments – Consolidation is a method of shipping where a shipper combines multiple orders into one shipment. The shippers share the transportation cost by fitting various shipments into one container. This can reduce costs, and consolidation can speed up the delivery and customs clearance process.
- Negotiate With Multiple Carriers – Since countless carriers move cargo internationally, each has its shipping rates. A shipper can negotiate these rates and get the best quote amongst the transporters. Having solid relationships with steamship lines is critical in negotiating prices. Using online freight marketplaces to compare quotes is also ideal for finding cost-effective options.
- Optimize Shipping Routes – A carrier’s route to transport freight directly impacts the cost. Shorter, more direct lanes are less costly than more extended ones. Avoiding routes with high congestion is also helpful, as it can increase costs and lead to other issues.
- Pay Attention To Cargo Packaging – A way to optimize costs that shippers tend to overlook is to optimize packaging. Not packing cargo optimally can add extra volume and space, raising costs.
- Ship Off Peak Season – Peak season is when shipping demand is high. This season usually starts in mid-August, goes to the end of October, and sometimes extends to November. An effect is that the cost of shipping internationally tends to rise. Deciding to ship before that period can help in saving costs.
Using The Help of a Freight Forwarder
Finding the best cost to transport your goods can be crucial for individual and business shippers. Another way to reduce ocean freight costs is to use the assistance of a freight forwarder to ship internationally. Forwarders are connected to a network of carriers and can negotiate the best rate to move your shipment. Contact A1 Worldwide Logistics at 305-821-8995 to discuss your cargo’s movement with our forwarders.
by A1 WorldWide Logistics | May 23, 2024 | Economic trends, Importing, Transportation
Recent developments are causing an increase in shipping costs, with container rates still rising since the start of 2024. Carrier companies could soon raise prices to $20,000 for 40ft equivalent units (FEU) by the end of the year. In particular, a surge in Freight All Kind (FAK) rates is not bound to a specific commodity. The Drewry World Container notes an increase of 11% for a 40ft container, bringing the average cost to $3,511. This is a 104% increase compared to the same period last year. The spot rates of specific trade routes’ have also risen by nearly 30% in the past two weeks. With peak season starting in mid-August, the current situation may lead to higher costs and delays in the coming months.
Why Are Container Rates Still Rising?
Different global factors have contributed to the rise in container rates, including the scarcity of available space. Along with the Panama Canal drought and the US-China trade war, the Red Sea crisis significantly adds to the surge. The war near the waterway has caused ships to reroute around the Cape of Good Hope in South Africa. This added nearly 14 days to some shipments, extending transit times and limiting container capacity, raising container costs. Meanwhile, demand for international shipping has reached record levels in Q1 of 2024, nearly up 9.2% compared to Q1 last year. The present market is due to lowering capacity and transit times during the coronavirus pandemic.
Although the international shipping industry has recovered from COVID-19, the impact is still in the minds of shippers. The current scarcity of container space is following the pandemic trend, and many are preparing in advance. Companies are importing more goods now to have inventory and prevent potential delays as the peak season nears. The rise in container rates directly results from the demand and is a GRI (General Rate Increase). GRIs are standardized adjustments by carriers to base rates across shipping routes. With prices rising as the peak season approaches, some may be willing to pay more to secure space.
What Does It Mean For The Shipper?
The hike in rates has a direct impact on shippers that extends beyond having to pay extra costs. Other effects include increasing cancellation of reserved space, new weight limits, and more significant surcharges. While it may be impossible to avoid rising rates, exporters must prepare beforehand to prevent any adverse issues from arising. Shippers have already started looking for alternative methods of conveyance, like air, to prevent delays. They must be current with any news in the international shipping industry. This can include constantly checking news websites or other media sources for information. Understanding your supply chain is also crucial in making informed decisions.
Despite the current rising costs, shippers still must move cargo internationally. However, they must take the proper steps to ensure the transport of their goods. Another way to prepare is by using the assistance of a freight forwarder to move your cargo. Forwarders act as the middleman between the shipper and the carrier transporting the goods. They have various responsibilities, including finding the best rates for exporters. Along with guiding shippers throughout the process, they assist with the duty payments and documentation on their behalf. Call A1 Worldwide Logistics at 305-425-9456 to communicate with our freight forwarders regarding your shipment.
by A1 WorldWide Logistics | May 16, 2024 | Importing, Shipping Logistics, Transportation
A type of import that can be challenging when starting is importing olive oil to the U.S. The reason is due to the various regulations and procedures that the shipper must follow. Organizations like the FDA (Food and Drug Administration) and CBP (Customs and Borders Protection) dictate these policies. Despite this, the U.S. is the 2nd largest importer of olive oil globally. In 2020, the U.S. had a share of 17.9% of all world imports and brought in over 403 thousand tons. Many benefits of olive oil have caused an uptake in the amount brought in recently, especially for restaurants and retail. With the growing push for healthier nutrition, shippers can benefit from importing olive oil.
What Should You Know About Importing Oil To The U.S.
There are numerous things shippers should know before bringing olive oil into the U.S. It is essential to understand the various regulations for importation. The country of origin also has numerous guidelines a shipper must follow before exporting. The FDA is the U.S.’s primary regulatory body and can be very strict on requirements. Examples of FDA prerequisites include a food facility registration, Foreign Supplier Verification Program (FSVP), prior notice of import, etc. The FDA also mandates that olive oil ships from an approved region follow safety standards and be labeled correctly. Failure to follow requirements can result in a delay or rejection of your import.
Along with the FDA, a shipper must adhere to regulations the CBP sets. The CBP is in charge of enforcing trade laws for the U.S., ensuring importers comply. This is to prevent any dangerous or prohibited cargo from entering the country. Additionally, the CBP ensures that import duties are issued and collected upon entry. Duties on olive oil shipments are based on the value of shipments. The blend of olive oil, such as virgin, extra virgin, and certified organic, also determines duties. The CBP may also require that the shipper obtain a customs bond in oil shipments valued at or over $2500.
What Is The Process For Importation
Before leaving the country of origin, the shipper must ensure that the cargo has the proper product labeling. Labeling includes crucial information like expiration dates, specifications, quality certificates, etc. The importer must also prepare the documentation beforehand to prevent holdups and delays. Some of the documents for importation include:
- Bill of Lading or Airway Bill
- Commercial Invoice
- Arrival Notice
- Certificate of Origin
Olive oil also requires other certificates like the Phytosanitary Certificate and the Certificate of Analysis. Two primary ways that olive oil ships internationally are by air and sea. Using the assistance of a freight forwarder can help find a suitable carrier regardless of the conveyance method. Once the shipment reaches the U.S., the CBP (U.S. Customs and Border Protection) will stop and inspect the shipment. When customs releases the shipment, you can move it to the final destination by trucking service.
The process of importing olive oil into the U.S. can be complex and could take more steps than the ones described in the article. Having assistance from a freight forwarder and customs broker can help streamline the process. A1 Worldwide Logistics has both services and more to ensure the success of your shipment. Reach us at 305-821-8995 to begin importing into the U.S. from anywhere internationally. Whether you bring in olive oil or any other commodity, we guide you through the process.
by Jontrey Aimes | Apr 4, 2024 | Importing, Shipping Logistics, Transportation
Although importing cars from Japan can bring numerous benefits for importers, it can be challenging initially. Importers must follow many laws and regulations, and failure to do so can result in monetary loss. In particular cases, it may also result in shipment loss. Despite this, shippers consider Japan one of the biggest importers of cars internationally. In 2023, the Japan Automobile Manufacturers Association (JAMA) reported nearly 4.42 million vehicle exports from the country. In the same year, Japan brought over 1.2 million into the U.S. This article will introduce how to start the importation process.
What To Know Before Importing Cars From Japan?
Understanding the regulations for bringing Japanese cars into the U.S. is essential. For example, almost all 1997 or newer Japanese Domestic Market (JDM) cars are illegal to import into the U.S. JDMS are vehicles designed for the Japanese market. These types of cars are prohibited because they do not meet U.S. emission control and safety standards. There are ways to bypass these laws legally. It is also crucial that the importer prepares the car before shipping it. The U.S. Department of Agriculture requires that the undercarriage be sprayed and cleaned thoroughly before entering the country. The reason is that the undercarriage may contain foreign soil, which can contain dangerous pests.
Before importing cars from Japan, shippers should understand the costs involved. The shipping price usually starts around $1895; however, this number can increase based on the make and model. Other considerations include your shipping destination, transportation method, and departure port. Foreign-made automobiles are also subjected to 2.5% dutiable entry charges, whether new or used. All commercial imports into the U.S. require customs bonds valued at $2500 or more, including duty-free items. Importers should also know fees like storage, cleaning, and vendor costs.
What Is The Process For Importation?
When shippers are ready to import, they arrange transportation by contacting individual carriers or freight forwarders. Forwarders coordinate the movement of your shipment by finding ideal rates from a network of carriers. A standard method is by RoRo, a vessel that rolls cars on and off. The timeframe to transport a vehicle from Japan is roughly 4 to 6 miles, depending on various factors. Before the import reaches the U.S., the shipper must send the appropriate paperwork to the CBP. Some of the standard documents required for importation into the U.S. include:
- Bill of Lading
- Packing List
- Commercial Invoice
- Customs Bond
- ISF Filing
Other documents specific to vehicles include the EPA Form 3520-1 and the NHTSA Form HS-7. Since paperwork tends to be one of the most challenging parts of the process, shippers usually hire a customs broker. Customs brokers coordinate with CBP and provide documentation, payments, and other transactions on your behalf. Once customs releases the vehicle, the importer can use a freight broker’s assistance to transport it to the final destination.
While importing cars from Japan may seem attractive for companies and individual importers, things can still go wrong when starting. For example, not filing an ISF or filing it late can result in a $5000 fine per violation. There are also situations like congestion and cargo damage that are out of your control. Having assistance from a forwarder or broker is the best way to ensure the success of your shipment. Contact A1 Worldwide Logistics at info@a1wwl.com or 305-821-8995 to speak to our freight forwarders and customs brokers when beginning.
by A1 WorldWide Logistics | Mar 21, 2024 | Importing, Shipping Logistics, Transportation
Although increasingly common, shipping boats internationally can be tricky, especially for inexperienced shippers. The different sizes, regulations, and required documentation may confuse even the ordinary shipper. Not understanding the process leads to time and monetary loss. For example, giving customs incorrect documents can result in your goods being held up, leading to demurrage charges. Despite this, the international transportation of ships has grown in recent times. Shipments to and from the Mediterranean Sea to the U.S., particularly, have grown in volume. This article will introduce what to expect and how to prepare when starting.
What To Know Beforehand?
Before starting, it is essential to know the guidelines for transporting boats, which differ based on country. Likewise, the shipper must follow various customs regulations when bringing cargo into the U.S. Another important consideration is the boat’s dimensions, which affect the shipping method. The main ways that carriers ship boats and yachts internationally include:
- Containers – Containerized shipping is standard for boats shorter and narrower than eight feet. This is one of the most inexpensive transport methods despite the size limitations.
- Flat Rack – Larger boats typically ship in flat racks, which are open custom cradles that eliminate container size restrictions.
- Roll-on/Roll-Off (RORO) – The most typical way shippers transport boats internationally is by RORO services. Workers roll the ships onto the carrier using trailers and safely secure them.
- Lift-On/Lift-Off (LOLO) – Carriers with onboard cranes or cranes dockside at a port lift the boats onto the carrier.
A shipper should also prepare the boat for international shipping beforehand. Preparation can include securing delicate areas, removing or protecting detachable parts, and removing components. The yacht must also comply with safety standards. Fuel and water tanks can also require a complete or partial drain. Another consideration is having insurance protection on the shipment. Shipping companies and freight forwarders usually have insurance options available for transporting boats.
What Is The Process for Shipping Boats Internationally?
Once the shipper is ready to transport the boat, they contact a shipping company or freight forwarder. Freight forwarders act as the middleman between the shipper and carrier while handling different parts of the transportation process. During the journey, they give updates on the status of the shipment. The documentation must be ready before the boat enters the country of import. Customs brokers coordinate with customs on the release of your shipment. They do this by completing the paperwork, ensuring government compliance, calculating duties, classifying goods, etc. When customs releases the boat, importers typically use a flatbed truck to transport it to the final destination.
How Can You Get Started?
The reason why shipping boats can be complicated is because of the various rules and regulations involved. Shipments like yachts are valuable investments, and a misinformed decision can lead to significant losses. Shippers typically use the assistance of a 3PL (third-party logistics) company to begin. 3PLs are service providers that handle various parts of a supply chain. Some solutions include cargo transport, distribution, customs clearance, and more. Call A1 Worldwide Logistics at 305-821-8995 or email info@a1wwl.com regarding shipping your boat to and from the U.S. We have freight forwarding and customs brokerage services to clear your shipment once it reaches the U.S.
by A1 WorldWide Logistics | Feb 15, 2024 | Economic trends, Shipping Logistics, Transportation
After months of turmoil, the ongoing Red Sea attacks are continuing on containerships passing through. On December 26th, 2023, Houthi militants attacked a containership of one of the biggest shipping companies in the world. Over the next month, and into February, the militants struck multiple ships moving through the waterway. The reason that the disruptions are happening is the Israel-Hamas conflict that has been ongoing over the last year. Initially the war was primarily in Gaza but has escalated to other parts of the region, like the Red Sea. The attacks are at a point where shippers exporting their goods globally are starting to feel the effect.
What Do The Ongoing Red Sea Attacks Mean For International Shipping
The Red Sea is one of the most significant waterways in international trade. It connects to the Suez Canal, one of the most crucial artificial passages for shipping. Nearly 30% of container volume and 12-15% of global shipping traffic passes through the Suez Canal. Due to the number of carriers that pass through, the attacks significantly affect cargo moving globally. The reason behind the strikes is to cause trade disruptions, which will potentially push Western governments to force Israel to a ceasefire in Gaza. International trade has begun to feel the impact of higher transit times, shipment delays, and more emissions.
International shipping has already felt the strain from the Ukraine-Russia war and the Panama Canal drought. One of the main effects is that delays and congestion in certain ports could continue to surge. Another effect is increased shipping rates, particularly in shipments from China to the U.S. West Coast. The China-West Coast FBX rate of $2,713 on January 3rd, 2024, was over 95% higher than in January 2020. Many believe the congestion will increase in the next few weeks, specifically in West Coast ports. This is due to U.S. West Coast ports like the Port of Los Angeles becoming a more attractive transportation route.
How Are Shippers Responding To The Attacks
With the conflict continuing, shippers are finding numerous ways to navigate the disruption. As mentioned, some of the biggest shipping companies have rerouted their carriers to various locations away from the Suez Canal. By January 2024, freight passing through the Suez Canal reportedly dropped nearly 45% in two months. A frequent route has been the Cape of Good Hope in South Africa, which has pros and cons. Although exporters avoid the disruptions, this journey adds up to 14 days to the shipment. Another solution that shippers are looking at is using other methods of conveyance, like air and land. Transporting cargo by air reduces the transport time to nearly one or two days, which is crucial for time-sensitive cargo.
When situations like the current conflict arise, you must take measures to ensure your shipment’s success. Although disruptions in a canal may not be avoidable, there are ways to avoid feeling the damage to your shipment. Coordinating with a freight forwarder is a primary factor in preventing delays and impediments to the supply chain process. Freight forwarders are logistics professionals with years of experience in shipping. Contact A1 Worldwide Logistics at 305-821-8995 to speak to our export forwarders and begin moving your cargo globally.
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