Sea Freight 101

An introductory guide to sea freight and why it's the mode of choice for budget-conscious imports and exporters.

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Sea Freight

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What Is Sea Freight?

Additionally referred to as ocean freight, sea freight is cargo shipped by domestic (coastal) or international waters (imports and exports).

Sea Freight Services

Sea freight options are available based on cargo type to ensure the safe, efficient and economical transport of goods by sea.

Containerised

Sea freight cargo packed and stowed in shipping containers for onward transport aboard a cellular vessel (container ship). Ideal for a diverse variety of goods, including commodities that require refrigeration, containerised consignments can be easily interchanged between transportation modes (i.e. ships, trucks and trains) without the need to rehandle contents. For this reason, containerisation is a popular and cost-effective sea freight option, which is commonly available across the globe.

Smaller consignments consisting of goods that do not exclusively fill a shipping container can be grouped with other FAK (Freight All Kinds) shipments. Referred to as a Less Than Container Load (LCL) consignment, resulting shipping container space and associated costs are optimised for the voyage, reducing transportation costs to the benefit of the consignee/consignor.

Bulk

Unpacked or loose commodities stored in large quantities in the hull of a ship for transport, such as oil, grain, coal, gravel, etc. Merchant vessels that carry this variety of cargo are often called bulk carriers, bulk freighters or bulkers.

RORO

An abbreviation for roll-on/roll-off, RORO is a logistics term which refers to sea freight vessels designed to carry wheeled cargo, such as cars, buses, trucks, etc. Vehicles can be driven on and off the ship via built-in access ramps, avoiding the need and expense of packing and craning cargo (as required for containerised freight).

Subject to limited availability (depending on the origin and destination of merchandise), RORO services are a cost-effective sea freight option for all vehicles in working condition, particularly when cargo does not match standard dimensions (oversized). In such cases, out of gauge (OOG) flatrack shipments are generally considered a less attractive alternative based on transport costs.

Chartering

Vessels and crew can be hired for specific sea freight voyages, permitting full customisation of sailing routes and schedules. Rates vary based on a variety of factors which are outlined in the charter party agreement (legal contract between the ship owner and charter).

Oversized

Large sea freight consignments that exceed standard dimensions such as boats, trucks, agricultural equipment, mining machinery, tanks, etc. Oversized cargo does not provide the same level of efficiency in terms of vessel space/capacity afforded by containerised freight. For this reason, resulting transport costs can be high, exacerbated further if specialist equipment is required to crane and transport goods.

Shipping Rates

The way in which sea freight rates are calculated varies between carriers and transport providers. Charges typically pivot on the following:

  • Origin and destination.
  • Vessel availability and market saturation.
  • Fuel prices.
  • Port congestion.
  • Seasonal demand.
  • Cargo size and weight.
  • The type of shipment (i.e. RORO, bulk, containerised, refrigerated, oversized, etc).
  • Commodity.

Containerised shipments are a common sea freight option, as services are widely available, reasonably priced and suitable for a variety of cargo types (including refrigerated goods). Even smaller consignments (LCL shipments) are grouped with other mixed goods to collectively fill a single shipping container, optimising the space and resulting costs. Charged at a minimum of one cubic metre or one tonne (whichever is greater) it is sometimes cheaper to send low quantity items through a local courier who specialises in the delivery of small parcels.

Why Sea Freight?

Sea freight is a cost-effective and reliable mode of transport which is commonly available across the globe. With the advent of modern containerisation, international demand for services continues to grow as markets enjoy an improved level of transport efficiency, competition and associated costs.

Where time is not a primary consideration, sea freight is the obvious choice in contrast to air freight for international cargo.

Terms

Shipping for the first time? It won't be long before you're exposed to a jargon rich world of acryonms and industry terms. Here is a belief list to help you get started.

  • LCL - Less Than Container Load. Smaller consignments are shipped together (consolidated), to fill a container and therefore optimise transport efficiency.
  • FCL - Full Container Load. A full container carrying one consignment of goods.
  • Customs Clearance - The act of passing imported or exported goods through customs, subject to documentation and physical inspection approval (where applicable), permitting cargo to enter or leave the country.
  • Incoterms® - See Incoterms® Explained for details.
  • Freight Forwarding - See freight forwarding for details.
Full Glossary