Managing a business’ international import and export process is no simple task. There are many crucial factors that come into consideration when determining how to package and ship products to customers all over the world.
Shipping and logistics cost time, effort, and often a significant amount of financial resources. All of this is in addition to the fact that shipping a bulkload of items overseas needs enough planning, resources, and most importantly, space to get it from point A to B.
Because much is at stake when it comes to shipping, it becomes increasingly important to optimize your supply chain’s state of operations. Some helpful questions you can ask yourself as a start-off point:
- What are my options for shipping and logistics?
- What is the most efficient and cost-effective method to getting your product to your next business location?
- Are there implications tied to these options?
Here we’ll be diving into the different kinds of shipping options to be aware of and what else to consider when choosing your method of product transport.
International Shipping for Businesses
About 90% of carriage on the world trade platform is made possible by the international shipping industry. Without its aid, importing and exporting goods wouldn’t be possible. That being said, it’s important for businesses to make informed decisions when choosing how to ship products across the globe in a safe, responsible, and economical way.
Listed below are three methods of international shipping. Each option has its own set of advantages and disadvantages depending on your product, its materials, quantity, weight, and other factors.
This type of delivery is undoubtedly the fastest way to transport goods from almost anywhere in the world, making it ideal for valuable and perishable products.
Advantages of Air Freight
- A viable option for urgent shipping. This holds great significance especially to perishable goods and goods of high value. Because air freight takes much less time to transport, you won’t have to worry about products with short shelf lives or keeping too much in stock considering turnaround time for the next delivery is quick.
- Global reach. To date, many airlines can serve hundreds of destinations because of their ability to simply fly over what might be obstacles for other modes of transport.
- Reliable schedules. Should there be any unexpected delays, high quality airlines normally have flights slated on an hourly basis. They are also easy to track as departure and arrival times are logged and can be viewed online.
- Highly accessible. As a mode of transport, choosing air freight eliminates the cumbersome aspect of land delivery. There will be no problem of navigating through narrow roads or passageways that are usually difficult to go through.
- Reduced risk of damage and theft. There is a lot less handling involved when products on air freight are in transit. This minimizes the possibility of damage and theft in the shipping process.
Disadvantages of Air Freight
- Expensive shipping rates. Pricing is dependent on your product’s chargeable weight, which is the greater between actual weight vs volume weight. The higher number will always be taken over the two calculations.
- Carrying capacity. Air freight can only carry so much as compared to other modes of transport. For instance, the world’s largest cargo airplane, AN-225, can only lift 250 tons. Land and sea freight can carry nearly 200,000 tons.
- Size and space limitation. Planes are significantly smaller than other transport methods. This automatically means that space is limited when shipping out.
- Weather sensitive. Flights are ground in times of inclement weather such as fog, blizzards, and typhoons. While delays aren’t frequent, this can disrupt time sensitive shipping schedules.
- High CO2 emission. Of all the shipping options mentioned, air freight has the highest emission rates. If you’re a company that emphasizes social responsibility, this could become an issue.
This type of shipping is ideal for bulkier and heavier goods, which are less time-sensitive. Ships have much larger storage spaces to accommodate large containers and can therefore transport products in far bigger quantities.
Advantages of Sea Freight
- Cost-effective. Sea freight can cost up to 6 times less than air and land transport. This is because they charge according to container rate, making it more dependent on size rather than weight.
- Reliable documentation. When you’ve partnered with the right cargo company to ship your products, you can be assured they’ll have reliable documentation that tracks and details shipment. Because sea freight also takes a longer time in transit, there is more time to accomplish CAT (complete-accurate-timely) documentation process, which is part of the industry standard.
- Flexible carrying capacity. Space, dimension, and weight are no big issues for sea freight. This makes it the perfect option for shipping out large volumes, big, or bulky products.
- Environmentally friendly. Sea freight leaves a significantly smaller carbon footprint as compared to all other forms of transport. The World Shipping Council (WSC) is committed to continuously exerting efforts in minimizing carbon emission for its industry.
- Safe for carrying raw materials. Maritime shipping has long been known to handle these kinds of goods and over the last decade has decreased its incidents of cargo loss. Containers held within sea freights have also been built to safeguard products while in transit.
- Efficient even in bad weather. While air freight is highly sensitive to weather conditions, sea freight can soldier through rough seas as ships are built to withstand more unforgiving environments.
Disadvantages of Sea Freight
- Shipping takes time. What can take air freight a couple of days may take sea freight weeks to a month.
- Products are prone to damage. Considering ships brave seas through different kinds of weather, it’s not impossible that products incur damage in transit. Luckily, it’s unlikely that goods will be lost or stolen given their increased security measures.
- Expensive for small loads. Due to sea freight’s pricing structure being built around container size rather than weight, it’s much more expensive to ship goods in smaller quantities, unless you share the volume with someone else.
- Lack of infrastructure. There are only so many locations that have ports and terminals to receive sea freight shipments.
Land freight has two modes of transport, these are road and rail transport. This means shipping with this method is ideal for sending goods around accessible locations in a single country or landlocked countries.
Advantages of Land Freight
- Positive economic impact. Choosing to use land freight shipping makes door-to-door deliveries possible, offering more than just access to locally made products. It also effectively provides more jobs within the country and boosts the supply chain industry.
- Cheaper shipping rates. Land transport doesn’t need complex maintenance compared to air and sea freight shipping.
- Fast delivery for short distances. There are minimal chances of delay given the short distances that land freight needs to travel.
- Less packing cost. Land transport doesn’t need complicated packing as compared to air or maritime shipping, making it much cheaper option for locally accessible transport.
- Can access rural areas. Because road transport doesn’t always need a terminal to receive shipment, goods can be sent to even small towns that air and sea freight wouldn’t normally be able to access.
Disadvantages of Land Freight
- Carrying capacity is limited. Compared to air and sea freight, shipping on land has significantly less space.
- Shipping is dependent on road and rail accessibility. Depending on the location that goods are being sent, passageway conditions can very easily affect the time and capability of land transport to deliver.
- Accident prone. For motor transport it’s unavoidable for accidents and breakdowns to occur. Luckily, rail transport has a smaller risk of this happening.
Other Shipping Factors to Consider
Aside from the three kinds of shipping methods and their rates, there are several other things to consider when shipping internationally:
Tariffs, duties, and taxes
When shipping to a different country, it’s important to get a good idea of the standards you’ll need to be aware of. Countries will always have their own set of rules and regulations to adhere to when it comes to importing and exporting products. Rates for shipping tariffs, duties, and taxes will differ at each international border.
You may also want to look into calculating your estimated tax for shipping as it’s very easy for costs to build up and get out of hand. Consider customs value, import and processing fees, tax duties, as well as additional handling fees.
Paying for fees and services will also vary per country. Double check what payment method is accepted. Some may not accept credit cards, preferring to use bank transfers and online payment.
Look into what kinds of products may not be allowed for import in a country. You can check country-specific rules and regulations on this handy UPS resource.
There may be certain specifications for product packaging that you need to observe, such as the allowable product quantity and weight as well as its necessary labeling.
Part of the list of requirements in international shipping includes documentation. Details such as commercial invoice, certificate of origin, and export information are necessary processing materials. Look into what documents and certificates you may need to acquire to push with your shipping. You may have to submit them electronically or provide hard copies.
Be aware of the standard turnaround time of shipping with the transport service you’ll be partnering with. Factor in possible delays in delivery too. This way you’ll be able to set expectations for your customers and properly manage your business calendar.
Some other factors you might want to look into further:
- Bundled service offerings – Shipping services may have bundled services that can take packages beyond a designated port and provide door to door delivery.
- Market competition – How are your competitors doing it? Are their methods more effective? Could you possibly adapt some of their practices?
- Product factors – Does your product need any special services? Consider temperature, packaging for fragile items, and other unique circumstances.
- Macroeconomic factors – Is the country you’re shipping to undergoing an economic growth that’s impacting shipping prices and your business’s current sales? How should you adjust?
Managing a business takes a lot of hard work. Producing high-quality goods just scratches the surface. Shipping out your products and ensuring they get to your customers is just as important in the process because this can affect what will reach your customers and when. This makes supply chain optimization a key part of running a successful business.
When you set up processes to distribute your products on a global scale, you need to determine a number of important factors. Beyond the standard metrics of quantity, weight, fragility, and time constraints you’ll also need to be able to meet the necessary demands of the country you’re sending to. Making sure these are set in place can contribute to the efficiency and stability of your business.
If you’re in the market for safe, economical, and reliable containers for your shipping needs, BSL Containers has you covered.