International Cargo Shipping: A Definitive Guide

What's in this article?

International cargo shipping is something that you should consider if you want to expand and further your customer reach.

With international cargo shipping, you can reach many customers and won’t be limited to your country only. In addition, with the expansion of eCommerce, international cargo shipping is becoming more popular-even for smaller businesses.

International cargo shipping involves importing or importing goods via various transport methods, such as via ocean, air, or road. It is not an easy process as many different rules, laws, and regulations must be adhered to transport your goods successfully. As you can imagine, this is a complicated process as different countries will have different rules to abide by.

Furthermore, you must consider foreign currencies, different time zones, language barriers, and cultural differences when importing or exporting goods to and from other countries.

So, if you are interested in expanding your business and would like to consider international cargo shipping, then this definitive guide is for you.

We will look at everything you need to know to make the process easier and more cost-effective.

Shipping Process:

As you can probably tell, international cargo shipping is a highly complicated and intricate process. There is a lot of documentation and cost involved, and each country will have its own set of laws and regulations when accepting or sending off cargo.

So, we have taken the time to make the process easier for you to understand and comprehend.

1. Export Haulage:

First of all, the cargo will go from the shippers to the forwarder’s location. There are different ways in which this can be handled from the forwarder’s point of view.

They may manage the cargo from this point with their agency or employees to overlook the process. From the shipper’s point of view, however, they may decide to hire local transportation to get the cargo to the origin warehouse. There should be a conversation beforehand regarding who is responsible for the freight.

2. Export Customs Clearance:

This process takes place for every single shipment leaving the country. Specific regulations and formalities ensure that the cargo is delivered under the law.

A declaration is produced, and the relevant documentation is given to authorities. It is important to note that this can only occur with companies with valid customs licenses.

A customs house broker usually does this that the shipper appoints. Furthermore, this step must be done before the goods leave the country.

3. Origin Handling:

At this part of the process, the cargo is inspected thoroughly at the origins warehouse.

This takes place until the cargo is loaded onto the ship. The shipment is tallied, and a plan is then put into place regarding how the freight will be loaded. It is then consolidated with other cargo in the same container, which is then put in the container and moved to the port.

The shipment will then be put onto a ship. An agreement should be established stating which side of the party is responsible for paying for this part of the process. This can either be paid for by the shipper or the forwarder.

4. Ocean Freight:

If the method of transportation is via ocean, the specific ocean line will then be decided upon. The shipping line will be responsible for the entire journey, from the shippers’ location to the forwarder’s destination. A contract will be produced and signed at this point, but there will be no direct interaction with the shipping line. Once again, an agreement will be put into place as to which party will pay for the different stages of the shipment process.

Various surcharges are involved in the process, such as currency adjustments or bunker adjustment factors.

5. Import Customs Clearance:

This part of the process can be technically done before the cargo reaches the destination. This part of the process includes a declaration developed and submitted with relevant documentation. This then enables authorities to register and levy customs duty on the shipment. This part of the process must be cleared before the cargo can leave the customs area in the destination country.

6. Destination Handling:

Cargo handling is something that also needs to take place before the cargo can be released to the forwarder. This takes place in the form of the container being transferred from the ship to the shore. The container is then taken from the port to the forwarder’s warehouse. The cargo is prepared specifically for the forwarder before being delivered. Once again, there needs to be an agreement as to which party will cover the costs of this process, which needs to be paid in full before the cargo can be released successfully.

7. Import Haulage:

The final step of this process is the cargo being hauled to the forwarder. Usually, the cost of this does not cover unpacking the shipment once reaching the forwarder’s warehouse and will be done by the forwarder’s employees.

Freight Forwarding:

Your mind is probably on overdrive after ingesting all the information above. But what you may be unaware of is that there is something called Freight Forwarding that can take care of the whole process mentioned above for you in a timely and cost-effective manner.

What is Freight Forwarding?

Freight Forwarding consists of a company taking charge of the shipment process for importing and exporting goods. Using a freight forwarder for your business will alleviate endless stress and ensure that your international cargo shipping runs smoothly.

In addition, a freight forwarder will be aware of all the regulations and laws required to follow in each country and at each step in the process.

Furthermore, a freight forwarder will act as the transporting service's middleman and the shipper to ensure clear communication. It may not have anything to do with the physical shipment of products. A freight forwarder is either a single person or a company that implements the necessary process to ensure smooth international cargo delivery.

Benefits of Using Freight Forwarders:

Experienced freight forwarders will be able to run the process quickly and save both time and money as they may be able to offer discounts and know the most cost-effective ways to do so.

In addition, they will know the best routes to take and learn how to overcome barriers to international cargo shipping.

Moreover, the freight forwarding company or individual will be able to predict specific issues and will be able to implement specific problem-solving solutions that will, as a result, save time and money.

This is especially useful if your business does not have ample knowledge of international cargo shipping. The freight forwarder will be able to guide you appropriately. Furthermore, you will rest assured that the company will work ethically and according to the law.

Initial Processes Involved in International Cargo Shipping:

1. Finding the Best Route

Knowing the correct route and the best transportation method is vital when wanting to transport cargo internationally. For example, one must decipher the best transport method for shipping cars internationally. Will it be best to do so by air, land, or ocean?

Many different risks need to be considered for each transportation method, and a risk assessment plan would need to be thought out for each of these to figure out which transportation method poses the least risk.

2. Customs Clearance

Similarly, to fly abroad and needing to take your luggage through customs, transporting international cargo will need to be cleared.

Various documentation goes into doing this, and the paperwork will be checked thoroughly before being able to enter any country. Customs will need to ensure that the goods have been delivered legally. Knowing the different regulations for each country you want to transport goods to is vital to the success of international cargo shipping.

3. Prepping documentation

Apart from the documentation needed for customs, various documentation and licenses will be required to transport international cargo successfully. Documentation that would most likely be required are things such as invoices, statements, and certificates.

4. Packing Goods and Storage

A prominent part of the process would be packing and storing the goods you want to import or export. If you are transporting fragile goods, you must ensure that your stock is packaged and stored appropriately to save on cost.

Different Charges Involved:

Although we have mentioned a few different costs above, we have compiled a detailed list and brief explanation of the additional costs involved in international cargo shipping.

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Freight-associated Costs:

Maritime Freight Charge

This is the main cost that needs to be considered when shipping cargo via the ocean. This charge covers the prices generated when transporting freight from the origin port to the destination port.

Bunker Adjustment Factor (BAF): Fuel costs
Emergency Bunker Surcharge (EBS): Rise in fuel costs
Currency Adjustment Factor (CAF): Exchange rate risks
Peak Season Surcharge (PSS): Covers an increase in operational expenses between July and October
Lesser known carrier-related fees include congestion surcharges, war risk, and container management fees (there are other career-related fees).

Zone-specific Charges:

These charges cover additional charges through specific zones, such as Piracy Risk, River Plate Toll, and Suez Canal Surcharge, to name a few.

Delay Fees:

Demurrage:

The cost for holding cargo in containers by shipping lines if there is congestion.

Per Diem:

This charge covers equipment not returned to the port or terminal after its allocated free time. This is to prevent importers from holding onto containers for too long.

Storage Fee:

This covers the fees of holding your cargo at any location.

Taxes and Duties:

Taxes:

This is calculated according to the value of cargo being transported. The importer usually covers this.

Duties:

Duties are charged taking into consideration the percentage of the value of the goods. This comprises the cost of the goods, maritime freight rate, and insurance.

Customs Fees:

Customs clearance fee: administrative tasks are covered by this fee
Customs bond: insurance for goods ensures that taxes and duties are paid.

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Other Charges:

Port charges
Inland charges
Destination charges
Documentation fees
Cargo insurance

Thus, it is clear that planning the shipment of cars internationally can take up much time and involves the utilization of a vast amount of resources. There are numerous steps to the process and many charges that need to be paid along the way. Furthermore, when shipping a car internationally, the shipper and the forwarder need to consider the different regulations and laws each country holds. If these are not considered, then the shipment of cars will not be successful.

Accordingly, A1 Auto Transport holds terminals in most major cities in the United States. When utilizing a terminal, one would need to drop off and pick up your car once the shipment has been made. If, for some reason, the terminal cannot be accessed, A1 Auto Transport also offers door-to-door services.

For those customers who own luxury cars, we can offer for your vehicle to be loaded into the container first to avoid any cars that may be reloaded, resulting in less chance of damage. At A1 Auto Transport, we ensure that the vehicles in our care are covered by insurance.

We also have satellite tracking to keep an eye on the entire process. Although we take utmost care for the cars we transport, taking out additional insurance for international car shipping is something we suggest. This will ensure extra safety for your vehicle should any issues occur that are out of our control.

And so, we understand how difficult and stressful it is when you need to transport your car safely to another destination. You may not have known how to do so before, but now that you have taken the time to go through this information, you hopefully have a broader knowledge of the services we at A1 Auto Transport can offer you.

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