Mastering International Freight Doesn’t Have to be a Train Wreck!
International trade has opened up a world of opportunity for entrepreneurs. But as incredible as global sourcing and importing can be for a business owner, it can also get complicated. Even for the seasoned eCommerce seller, freight, customs and importing can seem intimidating and overwhelming.
Image Credit: Tim Mossholder on UnSplash
Nonetheless, entrepreneurs shouldn’t be deterred. Sure, there’s a bar to entry and some industry knowledge is required. But once you crack it, you’re literally open to a world of global commerce.
Here are nine of our top tips for getting into the freight game.
Tip 1: Get Help You Can Trust
You need a partner who knows how it works, and for international shipping, that means a freight forwarder. A good forwarder is like a good travel agent for moving your cargo. They understand how the process works, will work out your options, give useful advice, make the bookings, complete all the paperwork, and step in if things start to go wrong.
Here’s a common trap for beginners who try to go it alone. Many suppliers offer to arrange the shipment as far as the port in the U.S. The buyer mentally adds on local trucking costs, and it looks like a great deal. But there are some other significant costs involved, like clearing the goods through Customs. Having a forwarder involved in the process, should steer you clear.
Tip 2: Know When To Ship By Air Freight Or Ocean
If you are looking at cost, ocean freight is much cheaper. For instance, a shipment costing $195 by ocean, may cost almost $1000 by air. Huge container ships and historically low rates means that while it may be slower, ocean freight is at rock bottom. A full 20’ container from China to the US main leg can go for as low as $800.
If you have a pressing deadline, go for air freight. Express Air can deliver in less than a week. Standard Air generally takes 8-10 days. Air freight is generally more reliable, but you’ll pay for the speed.
There is a fairly new, third option, which is much cheaper than by air, and often not much slower. It works by streamlining ocean freight processes and only incorporating faster ocean services. It’s usually called Expedited Freight, and only some forwarders offer it.
Tip 3: Find The Right Forwarder
There are over 100,000 freight forwarders in the world, so finding the right one for you can be hard. Start with word of mouth. If you have a friend who is happy with their forwarder, chances are that it will be a good fit for you as well.
Since many freight companies are still a little old-school, expect it to take at least a couple of days to get a price quote. Many forwarders are also reticent to work with small customers so asking for quotes from a couple of extra companies will ensure that you’ll get enough quotes to compare.
Don’t be put off by smaller local forwarders. They don’t get caught up with big customers, so they are much more likely to reply to your spot quote, and will have more time to stay on top of your shipment.
Online platforms can help speed up the process. The Freightos Marketplace allows you to instantly compare quotes from reputable forwarders. And some larger forwarders, like UPS Air, will let you get partial quotes directly online.
Tip 4: Prepare Before You Request Quotes
You will need the supplier to send you the Packing List (they’ll know what that is) before you start. Make sure you give all the following information when you request a quote from a forwarder:
- Buyer and Seller contact details, including the physical addresses for pickup and delivery.
- Total weight (from the Packing List).
- Dimensions of every box, pallet, etc. Work out the total cubic volume, too.
- Product description. Be sure to ask your supplier for the HS code or find it here.
- The date that the shipment will be ready.
- The value of shipped goods.
Tip 5: Always Go For Comprehensive Cargo Insurance
When it comes to freight, ship happens. If your goods are damaged or disappear, you can’t rely on forwarder and carrier liability. Their standard terms and conditions probably means you’ll get a paltry $2.00/kg (2.2 lbs).
Insurance cover is internationally standardized and forwarders rates are usually competitive, so you probably don’t need to bother shopping around. But make sure that your forwarder arranges comprehensive cargo insurance.
Tip 6: Let Your Supplier Arrange Freight … If You’re lucky
Occasionally, your supplier may offer to arrange the entire shipment. Check that this means dropping off at your warehouse, FBA warehouse or store, and whether it includes clearing US Customs. If you trust your supplier, and their rates check out as reasonable, let them take on the responsibility and liability for the shipment. You can always use this Freight Rate Calculator for checking those rates out.
Tip 7: Only Go With One Forwarder For The Shipment
If your supplier isn’t arranging the shipment, you have two choices. Your forwarder could manage the entire shipment; or you can have your forwarder take over at some point in the process, like at the port in China. Having two forwarders involved is usually not a great idea: you get less control, and if the forwarders don’t coordinate well, you may end up paying substantial additional charges.
These choices, and more, are determined by the freight term (called an incoterm) that the seller and you agree to in the sales contract. Incoterms are part of the language that forwarders speak. There are two incoterms where having two forwarders involved actually does work well. They are the FOB incoterm (but only for full container loads), and FCA (for air freight and less than a container loads). Check out this resource if you want to know more about incoterms.
Tip 8: Think Landed Cost
Everyone knows how important it is to get good deals on the buy price of goods and the terms of payment, but most buyers don’t realize how important freight terms are, and how easily freight charges can sour a deal. When you are left with a choice of incoterms, the key tip is to forget the buy price, and instead calculate the landed cost – how much will it have cost to have those new goods sitting in your warehouse.
Tip 9: Some Final Tips To Pack Up With
Over-packaging will blow out freight costs. Avoid empty spaces, and check that your supplier is using the smallest box size possible.
Stick with the standard sized boxes – they fit nicely on pallets. Fragile shipments are the exception. They should be double boxed to add extra cushioning against jostling, both inside and outside the box.
About This Guest Post
I am extremely picky about guest posts. I normally don’t accept them and when I do it’s usually because I’ve used the products or services myself and love them. But I made an exception in this case because international shipping has been a thorn in my side since I started my private-label journey over two years ago.
To date I have only tried shipping by air because ocean shipping seems to be fraught with land mines and I didn’t know who to trust. The manufacturer arranged the shipping; even then I didn’t know if I was getting the best price.
When I spoke with Eytan Buchman and JohnEdmonds, both members of the Freightos team, I learned some very interesting things about the company including:
- Freightos is modeled after companies like Expedia. They provide a platform where you, the buyer, can enter your shipping information and get back quotes from multiple companies. When companies compete for your business, you win.
- You can lock in a price quote for 30 days. That can be handy when shipping prices are in flux.
- Freightos has real live human beings that you can connect with via live chat or phone…imagine that!
- Their system is free for you to use. Freightos gets paid by the freight companies.
To get Freightos quotes you have to sign up for a free account; I highly suggest that you do if you’re considering overseas vendors. At the very least least you will be armed with valuable information and at best you may just find the perfect partner to help you with acquiring your overseas goods.
I’ve signed up and requested quotes based on my last air shipment from Shanghai, China. Based on the research I had done at the time I placed the order, Freightos’ quotes were spot on for what took me hours of research to find on my own.
There’s no question that I will give them a try on my next international shipment. And maybe for shipping within the US as well because they quote for that, too.
I have no affiliate relationship with Freightos; I’m just sharing what I believe to be a good service at a great price…free.
Call to Action
What’s your story with international shipping? Are you afraid to try shipping by sea? Has this article helped you gain enough confidence to give it a try?
I’d love to hear from you in the comments. I’ve asked the Freightos team to keep an eye on this post so they can weigh in and answer any questions you have.
Now back to work for me!
Want to follow along on my journey?
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