Ocean & Sea Freight Shipping Knowledge

Ocean Freight Meaning: What Is Ocean Freight?

Ocean freight transport is the shipping of goods by sea via shipping containers.

Ocean freight is the most common mode of transport that importers and exporters use. In fact, a full 90% of goods are shipped by ocean freight and sea freight. The other international freight transport modes (courier, air freight, express) are all faster, but they are also more expensive. Smaller shipments, and products with a high value, generally go by these other modes. 

Why Ship By Sea?

Capacity and Value – One container can hold 10,000 beer bottles! And ocean freight is cheaper. As a rule of thumb, any shipment weighing more than 500 kg is too expensive for air freight.

Fewer restrictions – International law, national law, carrier organization regulations, and individual carrier regulations all play their part in defining and restricting what goods are considered dangerous for transport. Generally, more products are restricted as air cargo than as ocean freight, including gases (e.g. lamp bulbs), all things flammable (e.g. perfume, Samsung Galaxy Note 7), toxic or corrosive items (e.g. batteries), magnetic substances (e.g. speakers), oxidizers and biochemical products (e.g. chemical medicines), and public health risks (e.g. untanned hides).

Emissions – CO2 freight emissions from ocean freight is minuscule compared with air freight. For example, according to this research, 2 tonnes shipped for 5,000 kilometers by ocean freight will lead to 150 kg of CO2 emissions, compared to 6,605 kg of CO2 emissions by air freight.

What Are The Downsides Of Ocean Freight?

Speed – Airplanes are about 30 times faster than ocean liners; passenger jets cruise at 575 mph, while slow-steaming ocean liners move at 16-18 mph. No surprise then, that a shipment going by air freight from China to the US usually takes at least 20 days more than by ocean freight. Reliability – Port congestion, customs delays, and bad weather conditions generally add much more days to ocean freight than air freight. To date, tracking technology in air freight is often more advanced than ocean freight. That means that ocean freight is more likely to get misplaced than air freight. This is especially true when the ocean shipment is less than a container load. That said, ocean freight is becoming more reliable thanks to digitization.

Protection – Ocean freight is more likely to get damaged or destroyed than air cargo. That’s because it is in transit a lot longer, and because ships are more subject to movement. But don’t worry too much about ocean cargo falling off ships. The urban myth says 10,000 lost per year, but it’s more like 546 of the 120 million container movements per year that fall in the drink. Even less likely is piracy. Hotspots in recent years have included the Horn of Africa, the Gulf of Guinea, and the Malacca Straits.

Ocean Freight Services

Ocean and sea freight services break down to two further options: a full container load (FCL) and a less than container load (LCL). With LCL, several shipments are packed into one container. This means more work for the forwarder, there’s extra paperwork involved, as well as the physical work of consolidating various shipments into a container before the main transit and de-consolidating the shipments at the other end. This gives LCL three disadvantages: 

LCL takes more time to deliver than an FCL shipment. It’s typically recommended to allow an extra one or two weeks for LCL.

There is an increased risk of damage, misplacement, and loss with LCL.

LCL costs more per cubic meter.

Since shipping rates are lower for FCL, it may be worth using a full container once your shipment is large enough, even if your goods do not fill a full container. The tipping point for upgrading from LCL to FCL (the smallest sized container is a 20 footer) is somewhere around 15 cubic meters. 

Sea Freight Rates per kg

With the exception of particularly heavy goods, most LCL is priced per volume of goods, and not by weight. 

For most products, use these rules of thumb for which selecting the most cost-effective mode: 

Shipments weighing more than 500 kg becomes uneconomic to go by air freight.

Ocean freight is around $2-$4/kg, and a China-US shipment will take around 30-40 days or more.

At about $5-8 per kilo, a China-US shipment between 150 kg and 500 kg can economically go air freight and will take around 8-10 days.

Express air freight is a few days quicker, but more expensive.

Packages that are lighter than 150 kg can economically go by courier (express freight).

Common Ocean and Sea Freight Costs, Rates, and Charges in Your Freight Quote:

Expect to see these items on ocean freight quotes and invoices: 

Customs security surcharges (AMS, ISF)

Container Freight Station (these are the consolidation charges, and apply for LCL only)

Terminal Handling charges (charges by the port authority)

Customs brokerage

Pickup and delivery

Insurance

Accessorial charges (fuel surcharges, handling hazardous materials, storage, etc.)

Routing charges (e.g. Panama Canal, Alameda Corridor)