Gain key insights into ocean freight, explore different shipping types, and discover best practices to optimize your global shipments.
Gain key insights into ocean freight, explore different shipping types, and discover best practices to optimize your global shipments.
Ocean freight, which refers to the transportation of large volumes of cargo via specialized ships, has become the backbone of global trade. Around 90% of international freight management is carried out through vessels designed to transport everything, from containerized cargo to bulk shipping.
Ocean freight enables businesses to move large volumes of goods, from electronics and clothing to food and industrial machinery, across vast distances. Though it has become a compelling choice for companies seeking global expansion, ocean freight poses significant environmental challenges. But the good news is that businesses can turn shipping into opportunities to realize their sustainability goals. In current times, it has becomes crucial to balance the benefits of reduced freight costs with efforts to minimize the environmental impact of shipping.
Types of ocean freight
Selecting the correct type of ocean freight forms a crucial element of shipping logistics strategies. Each type offers distinct advantages based on the nature of the cargo, shipment size, destination, and urgency. Types of ocean freight services include:
1. Full container load (FCL)
Under the FCL shipping method, a shipper uses an entire container for the cargo. Businesses often prefer this method to transport large volumes of goods.
| Advantages | Disadvantages |
| Lower cost per unit for large shipments | High upfront cost |
| Ideal for fragile items due to reduced handling | Not cost-effective for smaller shipments |
| Faster transit times and fewer delays | Requires substantial cargo volume to be economical |
2. Less than container load (LCL)
Under the LCL shipping method, multiple shippers share space in a single container. This shipping method is ideal for startups, and businesses with smaller and lower frequency shipments.
| Advantages | Disadvantages |
| Cost-effective for small shipments | Longer transit time due to multiple shipments |
| Flexible shipping schedules | Increased risk of damage due to multiple handling points |
| No volume requirement for a full container | Additional charges for handling and consolidation of cargo |
3. Bulk shipping
Bulk shipping involves transportation of large quantities of unpackaged goods such as oil, grains, and minerals. This shipping method is typically used for commodities that are not containerized.
| Advantages | Disadvantages |
| Cost-effective for large quantities of homogeneous goods | Requires specialized handling and storage facilities |
| Transportation of a wide variety of bulk materials | Less flexible, as it typically involves specific shipping routes |
| Lower per-unit cost for bulk goods | Prone to delays due to weather conditions and port congestion |
Key considerations in ocean freight
Making informed decisions can simplify your shipping process. Here are some key elements that can make or break your ocean freight experience:
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Shipping routes
Finalize the ocean freight route after carefully considering the shipping lanes' congestion, port infrastructure, and trade agreements. You must also consider prevailing factors such as high-risk areas, geopolitical instability, and weather conditions.
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Costs and surcharges
Consider the base shipping rates, fuel surcharges, port fees, security charges, and customs duties. These costs can fluctuate based on market conditions, geopolitical factors, or changes in international shipping regulations.
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Transit times
Transit time is often influenced by factors such as shipping routes, weather conditions, port congestion, and carrier schedules. Accurate estimation of transit times is crucial to manage inventory levels, meet customer expectations, and maintain a reliable supply chain.
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Documentation and compliance
Ocean freight compliance requirements can be complex for international shipments. You must prepare and submit error-free documents that conform to the regulations of different countries. This often includes bills of lading, commercial invoices, packing lists, and certificates of origin. The step helps avoid fines, legal issues, or shipment detentions.
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Carbon emissions
It is equally vital to consider the environmental impact of ocean freight shipping. Maritime shipping emissions constitute about 2.5% of global CO2 emissions and are increasing exponentially. Businesses must opt for fuel-efficient vessels to minimize carbon emissions and meet their sustainability goals.
Ocean freight best practices for optimizing shipments
Refer to the following ocean freight best practices to avoid common pitfalls, reduce unexpected costs, and streamline your supply chain operations:
Leverage digital tools for better visibility and tracking
Utilize digital tools to monitor your shipment at every step. Such tools provide end-to-end tracking from origin to destination, enabling you to identify any potential delays and make timely decisions. for instance, Pando.ai's real-time visibility platform allows you to track shipments at the product, SKU, or order level. According to Jacob from Accuride, “With Pando, we can indicate the precise location of the product and the container.”
Optimize carrier selection and ocean freight routes
Consider factors such as cost, transit time, and reliability of the service provider before selecting a carrier. Partner with experts such as Pando.ai — the company has access to more than 40,000 carriers — to evaluate and select carriers based on multiple criteria. This would allow you to negotiate better rates and ensure compliance while maintaining a high service quality standard.
Streamline documentation and compliance through automation
Documentation and compliance can be tricky and time-consuming. Automating the creation and management of shipping documents can accelerate your shipping operations. Pando.ai's collaborative document management feature streamlines this process, ensuring 100% compliant shipment execution. “Initially, a lot of our processes were manual. Pando has freed up some of our time so we can focus on the important day-to-day responsibilities,” says Brian from Accuride.
Manage freight rate volatility with predictive analytics and AI
Ocean freight involves numerous risks, from weather-related delays to geopolitical disruptions. Recent events such as the Red Sea crisis and the Suez Canal blockage highlight the need to manage freight rate volatility. Pando.ai's intelligent transportation forecasting, powered by AI and ML, enables efficient transportation planning to mitigate risks. Additionally, Pando.ai provides global shipment planning to orchestrate multi-modal and multi-leg shipping routes.
Navigating ocean freight landscape with confidence
A deep understanding of the various types of ocean freight is essential for navigating the landscape effectively. Several factors are involved at each step of ocean freight management; each one can significantly impact the success of your global trade operations.
It is imperative for businesses to apply the best practices, such as digital solutions, to stay competitive. Pando.ai can enhance the visibility of your ocean freight, automate manual tasks, streamline communication, improve transparency, plan optimal routes, and manage resources effectively. Don’t miss out on the opportunity to transform your shipping operations—book a demo today.
