What is Freight Shipping?
Are you familiar with freight shipping? Before you get started on your first freight shipment, maybe it’s a good idea to get to know some of the terminology.
Freight on Board refers to the international commercial law imposed by the International Chamber of Commerce (ICC). The law points to the fixed cost and variable cost associated with shipping. The fixed cost is for a standard shipment that depends on the increase and decrease in volume of the shipment and variable cost depends on the volume solely.
In layman terms:
Freight shipping is the process when the seller no longer holds responsibility for the shipment. Once the shipment arrives at the dock, the buyer is now in control of it and has to pay the charges.
Before the shipment goes on board, any costs associated with shipping are paid by the seller. When the buyer receives the shipment, he pays for the transport cost.
Costs Involved in the Process
- Transport cost of shipment
- Marine freight transport
- Cost of loading goods onto the vessel
- Unloading costs
- Transporting goods from the port to its final destination
Here’s an example to help you understand the process better:
You are a shoe manufacturer in China and a buyer in Bernalillo has ordered a huge shipment of shoes. You are only responsible for putting together the shipment, whereas the buyer in China has to pay for everything. He will pay for the following steps in the process:
- When the shoe shipment will be transported to the port from the warehouse of the seller
- When workers will load the products onto the ship
- Any transport costs in between such as delivery to the buyer’s warehouse
For all this, the buyer will have to buy insurance to make sure that the shipment is protected in transit.
Now that you are familiar with the basics, following are two frequently asked questions that you might want to know the answer to:
What is 3PL?
This is short for 3rd Party Logistics, as in those companies that help with freight shipping. The moment you hire them for the process, they take full responsibility for the delivery.
Are There Different Options in Freight Shipping?
The Basics of Freight Shipping
Truckload shipping is chosen when you have enough goods to fill the truck. The goods are transported at the given time. Less-than truckload is chosen when you have a limited amount of goods. This shipment option is a little slow because the ship makes multiple stops. Expedited shipping speeds up the process whether you are shipping a small box of goods or a truckload. Lastly, intermodal is shipping by railroad.Once you have the basics down of freight shipping, it will become easier for you to speed up the shipment of your goods. This option gives you the opportunity to do international business and expand your brand’s reach.