Everything you need to know about freight forwarders, shipping, and more.
For e-commerce sellers, few things seem more confusing than international freight, even if you’ve nailed everything else to do with creating, setting up and launching a profitable online store, especially for businesses just getting their feet wet. Learning about documentation, finding freight forwarders, pricing, mode selection and the million other freight-related specifics can be hard. But it doesn’t need to be.
Here’s what you should know about international freight – freight forwarders, freight shipping, and more – all from the international freight experts at Freightos.
In this article, you’ll learn everything you need to know about:
Modes of Shipment
Communicating with Your Supplier
Choosing a Forwarder
Palletization: When to Palletize Goods for Shipment and Which Shipping Pallets to Use for Amazon Shipping
Shipping pallets are used to consolidate shipments and transport freight with ease. Pallets are firm, portable platforms customarily made of wood or plastic and weighing between 20 and 70 lbs.
- Air Freight: Due to their weight, pallets will increase the cost of shipping through air freight. When shipping by air, it is best to palletize after customs clearance.
- Ocean Freight: The cost of shipping cargo through ocean freight is not driven by weight to the same extent and you can have the shipment palletized at the factory. Palletizing the shipment will protect goods against damage or loss and will make the shipment easier to transport.
- Depending on the country, your supplier may need to provide you with a fumigation certificate if using pallets.
When working with a new supplier, it may take time to build trust. Therefore:
- Plan to re-palletize to Amazon’s requirements after customs clearance.
- Prepare for Amazon’s packaging requirements at this point, too.
- Arrange for a quality inspection in the supplier’s country, at least for the first shipment.
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Express Freight, Air Freight, or Ocean Freight: Choosing the Best Mode for Your Shipment
Aside from cross-border shipments, there are three freight “modes” – express, air and ocean. Each mode comes with a premium option. What are the differences between each freight mode?
Express Freight (International Courier)
- For small shipments only. Check each courier for weight and size restrictions.
- Shipping is streamlined (even customs) so you can book and pay online.
- Air freight processes are more complex and less automated than express freight. Another point about air freight is that more products are restricted cargo and with ocean freight.
- Ocean freight reliability is improving but it is still more prone to delays due to port congestion, customs holdups, bad weather, etc. Therefore, ocean freight is a risky choice if you have a hard deadline. Some ocean carriers offer a premium service. “Expedited freight” works by streamlining processes and only tying in with faster ocean and trucking services.
How do I choose which mode of freight to use?
The answer depends on whether you want to save time or money.
For speed, the following estimated times are for China-US door to door.
- Premium Express Freight (1-2 days)
- Express Freight (3 days)
- Premium Air Freight (5-8 days)
- Air Freight (8-10 days)
- Premium (Expedited) Ocean Freight (18-30 days)
- Ocean Freight (Expedited) (30-40 days)
For cost, each mode has a different fixed cost/variable cost (variable by weight) ratio. So the cheapest method will largely depend upon shipment weight. Here’s a rough guide:
- Express Freight is cheapest for shipments less than 50 kg.
- Air Freight is cheapest between 50 kg and 500 kg.
- Go for ocean freight if it’s more than 500 kgs.
- Ocean Freight vs Air Freight: Making the Decision
- Ocean Freight Explained: Calculating Costs And Price Trends
- International Air Freight Explained: Calculating Costs and Price Trends
- Shipping From China: Everything You Need To Know
- Freight Transit Time Calculator
- Freight Rate Calculator
- Amazon FBA Calculator for Freight Rates
- Seaport Code Finder
- Airport Code Finder
- Embed Freight Estimator Widget
What Information Do You Need from Your Supplier?
Your supplier will already know the shipment’s dimensions and total weight by the time you sign the deal. You will need these measurements when you are ready to request shipping quotes. If your shipment is made up of several items, calculate total dimensions by multiplying the three dimensions for each item to get its cubic volume, and then add the cubic measures together. These dimensions are on the Packing List. Request this doc from your supplier before you request a quote, to get the shipment’s weights and dimensions.
Your supplier may need to send you (or your forwarder) the following documents:
- Certificate of Origin. Customs may require this document in order to apply rebates and exemptions or enforce embargoes, depending upon the product and country. This will only be necessary for the first shipment.
- Commercial Invoice. This document includes the standardized product description, which you will use for checking duties and requesting quotes.
- Material Safety Data Sheet. This document is only required for shipments containing potentially hazardous products.
- Fumigation Certificate. Customs may require this document, depending on the product /pallet and country.
Choosing the Right Freight Forwarder
Choosing the right freight forwarding company is a big deal so how do you find the right forwarder for you from the thousands out there? Is it better to choose a small forwarding company or a larger one?
Choosing a freight forwarding company was once guesswork. The Freightos Marketplace includes reliable forwarder ratings, simplifying how you can choose a good freight forwarder.
Smaller forwarding companies are often able to focus on smaller customers and their shipments, but it is important to check which countries they specialize in and where they have trusted agents to take care of local arrangements.
Invoicing errors are practically unavoidable in the shipping industry. The average importer/exporter pays approximately $50,000-$150,000 annually just in errors made booking shipments onto container ships. However, it is difficult to check quote accuracy before you build experience because each forwarder presents their quote in a different layout, has their own fee description, and rolls up fees in different ways. Automatically generated quotes are an exception. They generally have fewer errors and will take everything that you requested into account.
Important Shipping Terms and Abbreviations You Need To Know
The freight industry is full of jargon and shipping terms. Here are some important terms you should know and why you need to know them:
An incoterm is a standard contract term used in sales contracts when importing/exporting is involved, that defines responsibility and liability for shipment of the goods. Basically, they determine how far along the process the supplier ensures that the goods are moved, and at what point the buyer takes over. By international convention, every international sales contract must include an incoterm that both parties agree on. Without an incoterm there will be no shipment. Each incoterm has its advantages and disadvantages.
- FOB – Free on Board shipping. This incoterm plays to the strengths of the shipper and the supplier. Your supplier arranges the stages of the shipment in their country. Your forwarder arranges the main leg and delivery.
- EXW – Ex-Works. This incoterm gives you complete control of the shipment from pickup to delivery. While it costs more than going with FOB, you can use a freight calculator to calculate the costs involved.
- If you are considering using another incoterm, make sure that you do some incoterms research first.
- Incoterms In Plain English: A Freight Shipping Guide
- Freight Information: Tips And Advice On Common Freight Shipping Costs, Charges, and Fees
- Common Freight Term Glossary And Explanations
It is important to familiarize yourself with three types of freight restrictions. On top of air or ocean cargo carriers banning your potentially “hazardous” product, there are two other types of product restrictions to check out before signing a deal with your supplier.
- Customs and import restrictions. Customs enforce all sorts of import restrictions on behalf of a variety of governmental agencies. The product, part of product, even something about the packaging, may be problematic, including common products like cosmetics, and common materials like wood and aluminum. Additionally, some products can carry steep anti-dumping duties. A simple Google search will also help determine customs fees and restrictions. Better still, check out the product on an HS lookup table. HS Codes (so-called because they come from the Harmonized Commodity Description and Coding System) are internationally standardized classifications of globally traded products.
- Copyright and trademark infringements. If the product or packaging is similar to another brand, especially a big brand, you may need professional help. Check out that product’s site for intellectual property details first.
- Freight Restrictions: You Can’t Sell These Hotcakes
- Is Your Cargo Flightworthy?
- HS lookup table
- Import Duty Calculator
- Freight Shipping Hazardous Material Table
Customs Clearance, Freight Quote Information, and Packaging
Although your forwarder will fully represent you on most things, duty payments, and customs bonds are exceptions. Forwarders are often reluctant to pay your customs duties in advance. An alternative is to use Customs’ three days free-storage allowance, but it often becomes a last minute rush, especially if the customs clearance happens over the weekend. Forwarders will often suggest another alternative, setting up your own account with Customs.
Customs bonds mostly apply to the US. The bond is Customs insurance policy to make sure that they receive all duties and penalties due. You have to make the choice between a Continuous bond or Single Entry Bond (plus ISF bond for LCL ocean freight).
Requesting A Freight Quote
When requesting a freight quote, it is important to ask for the following information:
- Product measurements (from the packing list)
- Precise product description (from the commercial invoice, unless your supplier already knows the HS code)
- Freight mode
- Full pickup and delivery name and address details – get Amazon fulfillment center delivery details from Seller Central (or just the one if you are using Amazon’s Inventory Placement program).
- You may be asked for your company tax ID (for customs records)
- Work out whether you will also want your forwarder to handle the FBA prep.
- Cargo insurance from your forwarder is an absolute must. Default carrier insurance is very low and forwarders generally provide competitive rates. Ask for the “comprehensive cargo insurance” option. It is well worth the cost.
Standard factory packaging is often quite suitable, and modifications will come at a cost. But, here are some things to look out for with shipment packaging:
- Too much packaging. An overload of packaging with additional weight, thereby adding air freight charges.
- Fragile products. The exception to the rule about too much packaging. Double-box fragile products for extra cushioning and use bubble wrap rather than styrofoam peanuts (many warehouses, including Amazon, ban them).
- Box size. Smaller shipments should be placed in smallest practical-sized standard size boxes in order to fit on a pallet.
- Reduce packaging cost. If you have a say on product packaging, check out some creative ideas that will help reduce packaging costs.
- Importing From China: The Definitive Guide
- Freight Insurance: Why You Need to Cover Your Bases
- Packaging: Think Outside (And Inside) The Box
- Key Freight Documents Explained
- Carbon Emissions in Logistics: The Road To Green International Freight
- Amazon FBA & Fulfillment Warehouse Locations
- The Ultimate Amazon FBA Europe Seller and Sales Guide
- Beating Freight Peak Season
- 4 Tips For Sellers To Master International Payments
There is always more to learn about international freight. While a good forwarder will take care of most of the shipping, Freightos Marketplace provides a one-stop shop for comparing instant freight quotes from over thirty freight forwarders, online booking, shipment management, and 24/7 customer support.