You might be used to the idea of being able to order goods or services from practically anywhere and have them delivered within a reasonable amount of time. Yet how do these goods travel to you? Here is an overview of container shipping and some key terms and processes.
Types of containers
There are many different types of containers available and range in size from 8 feet long to 40 feet long. The most common size is 20 feet by 8 feet wide. Here are the main types of containers:
Key shipping terms
Party or company that wants to receive cargo.
Wishes to send the cargo to the importer, likely after selling it.
- Shipping Company
If the importer or exporter is not handling shipping in-house, they may use a shipping company’s services. ‘Freight forwarder’ might also be used here.
The main process
Here is a simplified summary of how container shipping works:
1. Export Haulage: The exporter or shipping company will forward the freight (generally by truck or train) to the port. Often the shipping company can or will arrange for this. Export haulage generally ends when the cargo reaches the port for export.
2. Export Customs Clearance: The first of two main documentation steps required (at least for international shipping.) A licensed customs broker will clear the cargo to leave the country and receive a cargo declaration. Documents and information will be required, but those documents vary by country, and you should carefully check the details of what is needed. Generally, this step will be handled by the exporter or shipping company.
3. Origin Handling: Origin handling can refer to all of the activities that occur after the container or items to be shipped have reached the exporting port but have not left yet. Following this, the cargo is generally placed into the port’s warehouse, and it waits there until it is time to load it onto a ship.
4. Ocean Freight: This varies from ship to ship. The freight forwarder (shipping company) will usually enter a shipping contract with the shipping line, owner, or freight vessel. Parties may or may not be able to track where your shipment is at any given point It is not uncommon for a cargo container to be transferred to multiple cargo ships through multiple ports (much like how people might change subway lines).
How long the ocean freight step takes naturally depends on the distance is between the ports and how many stops are made along the way.
5. Import Customs Clearance: To determine levies, duties, and other payments and make sure goods are as they should be, cargo must go through import customs clearance, much like export customers clearance. Naturally, the exact process and requirements will vary from country to country. It is often the importer’s responsibility to handle the matter, but the task can be assigned or forwarded elsewhere.
Sometimes the freight forwarder will be unable or unwilling to perform customs clearance services, but the importer can generally find a broker if this happens.
6. Destination Handling: Much like how cargo is onboarded, there must also be an unloading process. Documents are checked, and the container is unloaded and brought to the warehouse. The importer can collect the cargo directly, or other shipping processes (trucks, etc.) can ensue.
7. Import Haulage: Once the cargo is in the import warehouse, it will travel to the address of the final destination. This last step is called import haulage. It can be done by the shipping company if they have the capabilities, or it might be outsourced. Some importers might also decide to have the cargo picked up. How exactly it happens will vary depending on the shipping agreement.
Delivery models & possible pricing
Shipping costs are a significant expense for many companies, especially with large products. While economies of scale impact container shipping and business, it still means that dedicated professionals must work to keep costs low.
Delivery and pricing models vary, but there are a few common ones you might see offered. You can read more about this at conexboxes.com/blog/how-container-shipping-works-a-global-solution. As with most things shipping, it’s wise to consult professionals about the process.
Anyone who has worked with container shipping before can tell you that there is a lot more to it than the simplified concepts and steps listed above. It is a massive industry, a career for many, and a key reason we enjoy so many amenities of modern life.
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