If you're contemplating shipping international freight you likely have a number of questions regarding the process. We're here to help with answers to common FAQs on shipping internationally.
1. How is international freight shipped?
When shipping from the U.S. to Canada or to Mexico, Central or South America, international freight is commonly moved by rail. When the cargo is headed overseas ocean freight is the most common. Air transportation is also used for shipment of international freight but as you might guess, the freight quote for that will be significantly higher than with other modes of transport.
To physically transport the cargo large containers are used. Some carriers require you to purchase full container space but most shippers find space for your cargo in containers that are not full. These shippers are known as Lcl or Ltl carriers and are by far the most common type.
2. What are the major costs associated with shipping international freight?
Most freight forwarding agents use something called a freight calculator that takes into account all of the costs required to produce a comprehensive freight quote. The bulk of the freight quote is made up of the cost of the transportation to the destination country. But there are many additional costs that include insurance, surcharges depending on the freight class, documentation fees, warehousing of the goods if needed, moving the cargo from a container yard to a train or ship, and additional transportation of the cargo once it is offloaded at the port or rail hub.
3. What do freight forwarders or transportation brokers do?
These agents coordinate the logistics involved in moving international freight to its destination port or hub and possibly from there to a point of distribution. They have a network of reliable freight transporters they use including Ftl and Ltl carriers that ship via all the major modes of transportation. These forwarding agents or transportation brokers will handle the documentation and other paperwork required. When you are planning to ship cargo your forwarding agent can supply you with a separate price quote for different modes of transportation to help you make the determination of how to best get your products to the foreign buyer.
4. What paperwork is required?
In the U.S. you will need a commercial invoice that offers line by line quantity and pricing, a certificate of origin which must be authenticated by an authorizing agency, and the shipper’s export declaration (SED) required by the U.S. Census Bureau. The foreign documentation varies quite a bit though most involve a bill of lading, or BOL. The EEU has its own set of documents as does the Caribbean coalition known as CARICOM. Individual countries also have unique documents that must be submitted.
5. What exactly is the Bill of Lading, or BOL?
This document is provided by the carrier to indicate that it has received the cargo onboard and takes the responsibility of transporting it to the specified location. The BOL serves as the contract with the transporter and also as a receipt.
6. What does “FOB” mean?
This designation stands for “free on board” and is used to show when ownership of the cargo, and responsibility for it, is transferred. If you ship goods from New York, for example, the designation “FOB New York” means that you as the seller or consignor are responsible for the goods until they are loaded on board the transportation vessel. You pay to get them to the vessel and loaded. At that point, the buyer becomes responsible and pays the cost of freight, insurance and other logistics. It is normal for the seller to arrange all of these logistics and include their costs as part of the total price quote given to the buyer.
7. Is freight insured by the carrier?
Generally, carriers accept a very small amount of liability which, in most cases, is not adequate to cover possible losses. These carriers include in the contract limits to their liability. Therefore, additional insurance is recommended to cover your investment. The forwarding agent you select for your international freight can factor insurance into the freight calculator and offer you a freight quote that contains it.
Handling the details of shipping international freight can be costly and time consuming. Most companies find it well worth the slight additional expense to hire a reliable forwarding agent to coordinate all of the details. They are the experts and their ability to find the lowest prices offered for transportation means that their services pay for themselves in nearly every load.