Freight Shipping Cost, Steps, and More // Ultimate Guide

Shipping is one of the last steps before your product goes on sale. At this point, you are eager to get your finished product fro the factory to a fulfillment center or the shelves of a retailer. So how do you get your goods from the factory to its final destination This guide covers every step.

Shipping is the final step before your product goes on sale. Most people think it is an easy step and often overlook it. As a result, they may be hit with higher than expected cost and delays getting a product through customs, and many other challenges.  Shipping can be easy if you know what you are doing and are prepared, which is why we made this guide. 

What information do you need to get a shipping quote? 

IN order to make a shipment you need to know certain things in advance and provide that info in order to get a quote. 

 One important thing that you need to know in advance the Incoterm, which should have been agreed on before manufacturing started. The incoterm will stipulate when the goods are handed off between the supplier and you and the buyer. And thus when the Freight Forwarder will pick up the goods. 

The info needed is: 

• Total Volume
• Total Weight
• The Port of Loading* 
• Port of Destination 
• Insurance*
• Incoterm

*varies by the incoterm.

 One important thing that you need to know in advance the Incoterm, which should have been agreed on before manufacturing started. The incoterm will stipulate when the goods are handed off between the supplier and you and the buyer, and thus when the Freight Forwarder will pick up the goods. 

The costs and Steps of Shipping 

What are the Steps of the Shipping Process? 

In the shipping process, there are essentially 10 steps that need to be completed in order to get a product from a factory to the final destination.

• Transport to the export port
• Unloading the carriage in the export port
• Loading onto the vessel
• Export customs clearance (to clear for export)
• Shipping on the vessel (such as ocean shipping or plane)
• Unloading the vessel at import port
• Import customs and clearance
• Import duties and taxes
• Loading of the carriage in import port
• Unloading at the destination (terminal) 

These steps are fairly basic but each needst be handled correctly to make sure that your shipment goes smoothly. 

We do a full breakdown of each step in our guide to the Shipping process <<<Link coming soon>>> 

What are the costs of the shipping process? 

When shipping many people think that the freight cost is the only cost is the actual cost of shipping, however in reality that is not the case. IN addition to the Fright cost, there are taxes, transport to and from the port, duty, Tariffs (From China to the USA) Customs Bond. 

When you are shipping form either China, Vietnam and really anywhere over sear you will need to pay the following: 

• Transport from the factory to port
• Export port clearance (exit fees) 
• Shipping/freight cost
• Insurance
• Delivery of Documents to customs (UPS, DHL, FedEx) 
• Port Charges (aka Destination Charges)
• Custom Bond (USA)
• Tariffs, Duties, and Taxes 
• Transport from Domestic port to the final destination

Note that Port is either a shipping port or an airport depending on if you do ocean or air shipping. 

We go over the full cost of shipping, and what to expect to pay for each sep so that you can figure out the total cost here: https://www.sourcinghub.io/shipping-costs-from-china-vietnam/

Cost Breakdown of shipping a container 

As stated earlier there are several different steps of the shipping process that you are paying for when sending a shipment from a factory to its final destination, usually a warehouse or fulfillment center. 

Please note that this guide mainly covers the cost of shipping a full container load (FCL). IF you are looking for Less than container Load (LCL),  we cover some differences in the two after this. Despite the difference, most of the cost will be the same, so this section is still useful. 

Loading the container and Transportation from Factory to Port

When the manufacturing of your product is finished, a freight forwarder will send a container to the factory. The container is then loaded and shipped to the Port of Loading. In almost all cases the transportation will be land-based, using either a Truck or a train (assuming the factory is near or on a rail yard) 

The typical cost for this step is about $100-$500 dollar depending on the distance. Fortunately, most factories are located relatively close to major ports, typically less than 2 hours drive. The cost of transporting from Factory to port is cheaper in China than most other countries, due to China’s investment in world-class infrastructure. In other countries, such as Vietnam and India the cost to transport from Factory to port can be higher than elsewhere due to longer distances traveled and waiting time at the port. 

Which party pays the cost depending on which incoterm is chosen. IF you are shipping FOB, which we personally recommend, then the cost is paid for by the factory and the price is reflected in the total price. 

Typical cost: $100-$500

Export clearance 

Products must be cleared for export from the country in which the goods were manufactured. Rules vary by country but for the most part, you need to have a commercial invoice, a Bill of Lading, and a certificate of origin. My experience is shipping out of China and Vietnam and these were the most common documents. There are a few cases where you need to have a Materials safety sheet if you are shipping a hazardous product. 

China’s Customs authority tends to inspect about 5-10% of all shipments that leave the country. We have had inspections done very regularly on shipments. We have been fortunate and all of our products shipped have had the proper documentation and have not been held up. But if you mislabel and the item you can face fines that start at about 10,000 RMB (~$1,400 USD) and go up from there. They also may confiscate and destroy the shipment which they will do at your expense. This is one reason we recommend using an experienced sourcing company that can double-check every step to make sure it’s legit and flows smoothly. 

From our experience, it’s best to make sure that the incoterms assign the task to the supplier. It’s much easier for a supplier, who is based in the country of export, to handle this as the process will go much smoother. 

Typical cost: $75-$300 USD

Cost of Freight

The Cost of Fright is simply to cost of shipping from the Port of Loading to the Destination post. For the most part, this is what people think of like shipping, it’s the actual time that the container 

Shipping cost varies depending on the destination. It costs about $1,000-6000 to ship a container from China to the United States, depending on the size and which coast. It’s more expensive to ship to the east coast, as ships have to pass through the Panama Canal. 

If you are shipping LCL then the shipping cost is most typically charged by volume, not weight, if you are shipping by ocean. 

• FCL – Varies, but around $1,000 to 6,000
• LCL – Varies but around $30-70 a square meter 

Insurance cost

Insurance is essential to make sure that you have all the risks covered. most freight forwarding costs include the insurance so it will be a small fee added 

The cost of insurance is based on the value of the cargo, and in many cases, it’s valued at 110% of the value of the shipment. The exact amount needs to be negotiated in advance, and typical rates range for 60% of value up to 110%.

The cost tends to be about .2-.4% (note the decimal) of the total value of the shipment as outlined in the commercial invoice. If you are making a shipment of goods worth 100,000 then you should expect to pay between 200-400 in insurance. 

Cost of Insurance: .2-.4% of the shipment. 

Delivery of documents to destination port

When a shipment is arriving in the domestic port you need to send the documents, inducing Bill of Lading. Packing list, commercial invoice, arrival notice, and other documents. We detailed the documents needed above. These documents are usually shipped with standard posts, such as DHL, UPS or FedEx, in advance of the cargo. You can send original or certified copies. 

Cost: around $50

Destination/ arrival port charges 

This is the step in which the customs, taxes, duties, and tariffs are applied 

This step is usually the biggest surprise for those who have never shipped before. The main reason is that the final cost is hard to quote in advance and is determined by the customs office at the time that the item arrives in the port. Customs charges vary widely depending on the classification so it’s important that you do your homework in advance. 

IF you want to calculate your charges the first thing you will need to know is your items HTS (Harmonized Tariff Schedule) code, and then look up the charges in advance and calculate them based on the commercial invoice provided by your supplier. Cosmo sourcing wrote a guide on how to find out the rates in advance here: Guide to Tariffs and Customs Duty // How to Easily Import your Product

Another hidden cost is inspection charges. In the US, Canada, and the EU tend to inspect about 5-10% of cargo entering the country. These inspections range from a quick visual inspection or an X-Ray that can take a few hours and cost $100-300 to a full inspection that can take up to a week and cost $2000. Unfortunately, when this happens, the buyer is expected to pay the cost. 

It’s hard to give an exact rate but you should expect to pay about 2-8% of the value of the shipment for taxes and duties, and if you are shipping a good into the US from China that is hit by tariffs then add an extra 10-25% on top of that. 

United States Customs Bond

IF you are importing into the United States then you need to obtain a Customs bond. This only applies to the US, so you can skip this section if you are shipping elsewhere. 

What is a Customs Bond?

A customs bond is basically a contract or legal agreement that ensures that the Importer pays all required fees, duties and taxes to customs. This is often called an Import bond. Customs and border protection (CBP) make this standard for all shipments of more than $2,500 or are restricted by other agencies such as the FDA. 

Most customs brokers as well as online booking platforms such as FreightOS or Flexport, allow you to purchase them directly with them. 

There are two types of Custom bond, single entry or a continuous bond. A single entry bond is good for those who only are doing one shipment or isn’t sure about the future. The cost is 5.5% per $1000 and a minimum cost of $55. A continuous bond is useful for anyone who does regular shipment and is valid for an unlimited amount of entries. The rate starts at $475 a year. 

Cost: varies by shipment, roughly 5.5%

Transport from Destination port to Final destination

This is the final cost associated with shipping. This is the cost to get your product from the port to the final destination. This is typically done by either truck or by train. 

In the United States, If you are shipping by Truck, you should expect to pay about $1.50-3.00 per mile to ship a container. Train rates are much cheaper. European Union is hard to get consistent answers as it varies by country. 

Cost: Varies by distance, type of transport, and country

Shipping Cost Overview

What Documents are Required for Shipping

The documents required to ship actually differ depending on which country is the destination. The United States and the EU actually have different requirements for what documents are needed to get a shipment cleared by customs so that they can enter a country. 

Required document for importing to the United States 

One benefit of shipping to the United States is that you do not need an Import License, however, it does have some specific requirements: 

• Commercial INvoice listing H.T.S. Code
• Custom Bond
• Custom Broker (almost all freight forwarders will have them on staff) 
• Bill of Lading (ISF or HBL) 
• Packing list
• Shipment advice* 

Required Documents for importing to the EU

For shipment to enter the European Union you need 

• Packing list
• A Commercial Invoice
• Bill of lading
• Declaration of Conformity
• Shipping advice*

*This is for shipment in which you are using Letters of Credit as the payment method

The final destination is defined by the buyer and if you are an FBA seller then that typically would be either Amazon’s warehouse or a prep and ship center.  The incoterms explain who is responsible for doing each action. It’s very common for a buyer or seller to hire a freight forwarder to do the shipping for them. 

Link: https://www.sourcinghub.io/shipping-documents-for-import-and-export/

Incoterms 2020 guide

You can read our full in-depth guide to the INcoterm 2020 here: https://www.sourcinghub.io/incoterms-2020-guide/

Incoterms are created by the International Chamber of Commerce (ICC) to dictate when and how a shipment is to be handed off between a buyer and a supplier. The ICC updated the terms into what is called Incoterm 2020. Incoterms also define who is expected to pay the insurance and when the transfer of risk happens between the buyer and the seller. This is the first time that the Incoterms drafting group has included representatives from China.

For the most part, the two most common terms are FOB (Free onboard) and EXW (ex-works) are the two most common. IN FOB the manufacturers are responsible for getting the goods to the port where it is handed over to the buyer. In Ex-works the buyer is responsible for the goods as soon as they leave the factory. IN most cases, the buyer and manufacturers will outsource the shipping to a freight forwarder. 

Amazon FBA Barcodes 

For our complete guide, check out Amazon FBA Barcodes Made Easy // Complete Guide

If you are selling on Amazon, then you must know that you have to have a barcode so that amazon can track your products in its system. Amazon is very strict about what barcodes can be sued and how they are applied. So please read this guide in full so that your product arrives in Amazon’s fulfillment center ready to sell. 

What are Amazon FBA Barcode Requirements? 

We are combining multiple aspects of FBA Barcode requirements into one complete article, so that’s it’s easier to follow if you are selling on Amazon FBA then you need to understand exactly what to expect using Amazons’ official guide. It’s a little technical so we try to break it down. The official guide is below Below:

There are three different types of Barcodes that Amazon uses, and they require certain standards for each 

• Manufacturer codes  // Must be GCID, UPC, EAN, JAN, or ISBN
• Amazon Barcodes // FNSKU
• Transparency Authenticity Code // This one only applies to brand owners registered with Amazon’s anti-counterfeiting programs. This does not apply to small sellers. 

UPC and FNSKU barcodes are the most widely used and recognized barcodes and are the ones that we recommend that you require 

Amazon FBA Barcode Types 

Amazon recognizes several different types of barcodes But the two that you need to focus on are UPC and FNSKU. It’s very important to know that when you ship a product to Amazon you have to have one and only one visible barcode. If the item already has a barcode and you are using another code you must cover up the old code. There are no exceptions, and Amazon is very strict about this. 

So when should you use FNSKU or UPC? FOr almost all sellers you should just use FNSKU, which is Amazon’s barcode. If you hear someone say “Amazons barcode” they are almost certainly referring to FNSKU. 

If you are a European seller then you will want to look into EAN barcodes. EAN stands for European Article Number and is provided by GSI, the same organization that assigns UPC. in 

Important note about GCID: Amazon stopped recognizing this code in 2018 and only uses it for product registered before this date. As this code cannot be used by new sellers anymore, we will not be covering it in this guide. 

UPC Codes

UPC, short for Universal Product Code, is the most common code used in North America. UPC is a 12 digit code that is unique to your product and recognized by almost all retailers including Amazon. 

EAN Codes

EAN stands for European Article Number and is provided by GS1, the same organization that assigns UPC. EAN has 13 digits instead of the 12 that UPC has. 

FNSKU aka Amazon’s barcode

FNSKU stands for “Fulfillment Network Stock Keeping Unit” and is assigned by Amazon to products that will be sold exclusively on Amazon. IF you are shipping directly to Amazon warehouse you will need to print this off, and if the product already has a UPC or other barcode you will need to make sure that this code covers it up. Amazon will only accept items that have one barcode. 

FNSKU amazon’s own barcode, every seller will have a unique barcode for every unique item. We encourage sellers to obtain one from amazon so that Amazon will create a unique listing. If you are selling an item using a standard UPC then amazon will lump all items with the same UPC into one listing. This can lead to product hijacking by your competitors 

Amazon ASIN codes

ASIN stands for Amazon Standard Identification Number. You will need to have a trademarked brand registered with the  US trademark office and then apply for Amazon’s Brand registry. This is for more advanced sellers that have a developed private label brand. 

How to Figure out H.T.S. Codes

Figuring out which HTS code is a 

Link: https://www.sourcinghub.io/tax-tariff-customs-when-importing-guide/

Calculating Tariffs, Taxes, Duty, And Customs Fees

When importing goods, people have many questions: How do I pay customs and taxes? How much are the tariffs? What is an HTS Code and how do I figure it out? We cover this and more in our guide to Customs and taxes when importing goods.

When importing products you need to be aware that almost all countries subject goods to some form of taxes and fees in order for the goods to enter the country. The fees vary by product and country and can be quite difficult to understand. 

The simple way is to simply know your products HTS (harmonized Tariff schedule) code and then look it up on your respective countries’ trade agency website. In the United States that is the Customs and Border Control, Canada

Importing to the United States: Customs Duties

In essence, the process is fairly simple: 

1. Figure out the HTS code of your product
2. Figure out the total cost of your shipment
   • I.e. if you are shipping 1000 units at a value of $5 each, then the total shipment is $5,000
3. Figure out the tax rate for your HTS code
4. Total shipment * Tax rate = Payments made to customs

We’ll go over each step in full detail later on in this guide

Tariffs Importing from China to the United States 

If you are importing or looking at importing, to the United States you are probably aware that the US has imposed tariffs affecting around $550 Billion worth of goods imported from China. This adds an extra fee that applies to these goods. 

Here is a direct link to the list of items affected by the tariffs on China [PDF Warning]

VAT importing into the European Union

While this guide is mainly written for Americans, it’s mostly the same process for the European Union just with different agencies and names. In the European Union, they refer to the as a Value Added Tax (VAT) and the information is published by the  Tariff of the European Union (TARIC) which you can visit here: TARIC database

One other important note is that the EU has an additional Combined NOmelcatue (CN) code that is added to the HTS code. This is 2 additional digits at the end that provide extra specific items. Regardless the method of looking up the code is the same. 

What is Freight Forwarding

For a full guide, check out our article, What is an International Freight Forwarder

Freight Forwarders are basically project managers for the shipping, import, and export process. That is to say that they don’t actually do the shipping or customs, but work with partners to make sure that the goods are shipped, cleared by customs, and arrange for smaller shipments to be bundled. 

Freight forwarders come in all sizes and specialties. A large freight forwarder can do every step to get your product from one country to another, while smaller freight forwarders may specialize inland trucking or a specific country. Freight forwarders will often coordinate with each other to ensure a smooth delivery. 

Finding a good and reliable Freight Forwarder is essential for your business no matter the size of your company or shipment. In this article, we’ll let you know what a freight forwarder does and how to find a great one! 

Freight Forwarder simply put, arrange all the details to get a shipment from one place to another. Freight Forwarders are experienced experts that understand every step and a potential issue in the full shipping Process. Check out our guide that breaks down the steps and costs of the shipping process.  

In most cases, this will be from one country to another, with multiple shipping methods involved, although some smaller Freight Forwarders will only handle domestic. Most freight forwarders are set up to handle shipments of all sizes from LCL shipments to multiple containers.  

List of International freight forwarders

This is a partial list, the full list is here: What is an International Freight Forwarder? // List of 40+ Trusted Freight Forwarding Companies

There are hundreds of freight forwarders around the world. Most tend to focus on import or export from one particular country. The best way to get a freight forwarder is to find one that is based in the country you are planning on exporting from. There are many but we made a list of some of the biggest Freight Forwarders in each country. The list is based on companies that export the most by volume into the United States in 2019 and pulled from various customs databases. 

List of Freight Forwarders in China

• UNICARGO
• Seabay Logistics
• Freight Right
• De Well Container Shipping Inc
• EVERGREEN LOGISTICS CORPORATION
• Eurasia International Group: Home
• 中国外运股份有限公司 (Sinotrans Central Company Limited) 
• HONOUR LANE

List of Freight Forwarders in Vietnam 

• ECU Worldwide
• Seabay Logistics
• EVERGREEN LOGISTICS CORPORATION
• T&M FORWARDING Ltd
• Saigon Ocean – International Logistics
• Royal Cargo
• Century Distribution Systems 
• Damco Vietnam 
• GROUP
• EXPEDITORS VIETNAM COMPANY LIMITED
• MAN FAI VIET NAM LOGISTICS CO., LTD (no website found)
• Fastport Co., Ltd
• SAIGON VINA STAR TRANSPORT LOGISTICS
• TRANG CHỦ (Twin Dragon Trading and Forwarding) 
• A & L Cargo
• Vietranslink & Logistic Solutions

List of Freight Forwarders in Thailand

• Amazing Logistics & Supply Chain Co., Ltd.
• OEC Group
• DSV United States Global Transport and Logistics | USA
• APL Logistics: Home
• Trax Intertrade Co., Ltd.

List of Freight Forwarders India

• EFL | Expo Freight 
• Orient Star Group 元泰集團
• CP WORLD LINES PVT. LTD.
• Freight Systems: International Freight Forwarding Company
•  

List of Freight Forwarders Hong Kong 

• OOCL Logistics
• Damco-Home
• APL Logistics: Home
• OEC Group
• Century Distribution Systems: Home
•  

List of Freight Forwarders Indonesia

• APL Logistics: Home
• Beranda – IndoExpress.co.id
• Damco Indonesia
• PT. Trans Pratama Sejahtera
• InterLogic Inc. 

List of Freight Forwarders Taiwan

• NMC LOGISTICS INTERNATIONAL
• K-Apex Logistics 
• China Sea Group
• OOCL – Taiwan

What are the dimensions of a container

In international shipping, there are two standard container sizes– 40-foot and 20-foot containers. As you can probably guess by the names, the length of these containers are 20 or 40 feet. A standard 20-foot and 40-foot container is exactly 8 feet 6 inches high and 8 feet wide. Containers were popularised and standardized in the United States, and thus we made suing standard Imperial units. 

For the metric dimension, containers are 12.19m or 6.09m (40 and 20-foot respectively)  long and 2.59 meters high and 2.44m wide  

Shipping Container Volume 

20 Foot Container // 1,150 Cubic Feet // 32.56 Cubic Meters

40 Foot Container // 2,400 Cubic Feet // 67.96 Cubic Meters 

High Cube Container dimensions

High cube containers are a taller version of cargo containers that are made for plus-size items.  These containers are the same length and width as a standard shipping container but are an extra foot (.3 meters) taller. 

Source: Shipping Container Dimensions – Standard Container Size Information

Weight of a container 

Maximum Total Weight 

How much does it cost to ship a Container

We used Frightsos free cost estimator and some of the most popular routes, which you can access here; https://ship.freightos.com/search (You will need to make an account) 

Important notes: Data was taken on February 16, 2020, for a hypothetical shipment on March 11, 2020. All prices are for a 20’ container, shipped FCL and Port to Port. The prices do NOT include, customs Bond, Taxes, Duties, and inland transportation to and from the port. 

Shipping from China to the USA Cost

• Shanghai to Los Angeles/Long Beach // $1,200 – $1,400
• Shanghai to New York // $2,200 – $2,500

Shipping from China to the EU Cost

• Shanghai to Rotterdam // $850-$1250
• Shanghai to Hamburg // $850 – $1,200 

Shipping from Vietnam To the USA Cost

• Ho Chi Minh to Los Angeles / Long Beach // $1,175-$1,400
• Ho Chi Minh to New York // $2,225-2,500

Cost of Shipping from Vietnam to the EU Cost

• Ho Chi Minh to Rotterdam // $950- $1,250
• Ho Chi Minh to Hamburg // $980 – $1,300

How long does it take to ship a Container

Important note this info is only for Port to Port shipping and does not include times taken to clear the customs and inland transportation from the factory or to final destination. 

Shipping from China to the USA Duration 

• Shanghai to Los Angeles/Long Beach  // 18-28 days
• Shanghai to New York // 30-43 days

Shipping from China to the EU Duration

• Shanghai to Rotterdam // 28-43 days
• Shanghai to Hamburg // 30-44 days

Shipping from Vietnam To the USA Duration

• Ho Chi Minh to Los Angeles / Long Beach // 20-31 days
• Ho Chi Minh to New York // 27-45 Days

Shipping from Vietnam to the EU Duration

• Ho Chi Minh to Rotterdam // 22-35 days
• Ho Chi Minh to Hamburg // 22-35 days

Shipping Insurance

Section coming soon

Packaging and labeling

Section Coming soon

FCL vs LCL Shipping Guide 

This section comes from our guide: FCL vs LCL Shipping // Which is best for your Freight. 

When you are looking at shipping options you need to figure out whether you should ship a full container load (FCL) or less than a container load (LCL). There are several factors that you need to consider, but the main one is the volume of the shipment. 

Most of the time buyers are not purchasing enough to justify a container, and thus need to go with the Less than Container Load (LCL) option. However, LCL does come with several disadvantages that you need to be aware of and make sure that you are getting everything right before you ship, including the export packaging. 

It should be noted that Container can only be shipped via ocean or land, not air, so for almost all cases LCL vs FCL only applies for ocean shipping. For almost all air shipments your cargo will be palletized and is nearly identical to LCL shipping. 

What does FCL and LCL Shipping Mean? 

FCL  Meaning // Full Container load  

When the shipment takes up an entire container by itself.  

LCL  Meaning // Less than Container Load or Low Container Loading

The total order takes up less than the entire container and needs to be bundled with other shipments to fill a container. 

If you are shipping at sufficient volumes you should always do FCL, as you have full control of the container from the factory to the final decision. Most of the time when you are shipping FCL you are loading the container at the factory.  

If you are shipping less than a container load you will need to work with a freight forwarder to bundle your shipment with other sellers who are shipping from the same port to the same designation port. THis 

Disadvantages of LCL,

There are a few disadvantages, for one, you need to work with a freight forwarder or some other similar services, in order to bundle your items into a container. This can add time as there isn’t always a container going from the same point a to b. IF there are no other containers, then you, or more likely the fright forwarded, will need to unload the container and transfer it to a different mode of transport. This can add time and cost to a shipment. 

In many cases it is actually easier, cheaper and faster, to purchase an entire container even though the shipment will not fill up the total container. 

When does it make sense to do FCL instead of LCL

The cost varies but if you are shipping more than 20 Cubic meters, it is often easier and cheaper to just go ahead and get the full container. Remember that a full 20’ container is 32 Cubic Meters, so you will be shipping a large amount of empty space. Despite that, it still may be easier. Compare the most up to date cost, before booking though as prices fluctuate as often as airline tickets do. 

Ocean vs Air shipping 

When you are shipping you need to figure out if you want your product shipped fast, or shipped cheap. The overly simplified answer is if you want cheap, ship by the ocean if you want fast ship by air.  But that is way oversimplified and there are several other factors such as environment, restriction on hazardous goods, volume shipped, protection form demand and much more that make the decision much more complicated. 

One thing buyers need to know is the actual step of shipping is just one of over half a dozen parts that you need to pay for when shipping from overseas. Check out our full guide on the cost of shipping freight. 

Ocean Freight vs Air Freight // Pros and Cons

See our full guide, Pros and Cons of Ocean vs Air Freight Shipping // Complete Guide! 

Ocean and sea shipping are the two main options for shipping large volumes overseas. Each of these methods has benefits and disadvantages.

There are a few cases of rail shipping from China to the European Union, but that isn’t as common and can only be done on one train. If you are interested, check out the Yiwu to Madrid line, the world’s longest rail route!

Pros and Cons of Ocean Freight

As you can guess this is the process of loading up your shipment on to a giant vessel and having it transported by sea from one port to another. These ships can be massive and they are almost always the most cost-effective method of shipping cargo. 

Benefits of ocean shipping

• Cheapest option
• Prices are determined by volume, not weight
• Have full control of the container from the factory to destination

Cons of Ocean Shipping

• Slow, sometimes taking more than a month
• Delays are common

Pros and Cons of Air Freight 

When shipping by air, you are loading the cargo onto a plane and shipping from one airport to another. As planes can travel significantly faster than ships, Air shipping is much faster. 

That speed does come at a cost. Air shipping is typical3 to 6 times more expensive to ship than by ocean. Air Shipping is also more restrictive on what items can be shipped, for instance, there are major restrictions and regulations regarding goods that have batteries. 

Benefits of Air shipping

• Fast, often taking less than a week 
• Can ship further inland than ocean shipping

Cons of Air Shipping 

• Expensive
• Strict regulation on what can be shipped
• Price is determined by weight and volume
• Can’t ship as a container

When choosing between air and ocean shipping you need to figure out which factors are most important for the shipment and make a decision that is best for you and your business. 

Shipping Hazardous goods, Restrictions, and regulations   

When shipping goods via Air, you need to be aware that the rules are very strict on what can and cannot be shipped. These include many obvious items like explosives, as well as some more surprising items like magnets and batteries. 

The categories include:

• Explosives
• All Flammable items (including aerosol sprays and more)
• Gases 
• Toxic or Corrosive items (Many batteries are included)
• Magnetic substances (including speakers) 
• Public Health Risk
• Oxidizers and organic peroxides 
• Poisons and toxins
• Radioactive material

If any of your items fall into any of these categories, you MUST follow very detailed procedures to ship. Here is the official Guide from US Federal Aviation Administration (FAA): https://www.faa.gov/hazmat/what_is_hazmat/

You can still ship items that are considered Hazardous, but the amount of extra safety needed and permits often make it extremely difficult and expensive. In addition, the fines for making a mistake can be in the $10,000’s. 

It should be noted that while air shipping is extremely strict, ocean shipping also has its own restriction on what can and can’t be shipped. Ocean shipping does allow for more items but you do need to be mindful of the regulations and restrictions. 

What information do you need to get a shipping quote? 

IN order to make a shipment you need to know certain things in advance and provide that info in order to get a quote. 

 One important thing that you need to know in advance the Incoterm, which should have been agreed on before manufacturing started. The incoterm will stipulate when the goods are handed off between the supplier and you and the buyer. And thus when the Freight Forwarder will pick up the goods. 

The info needed  is: 

• Total Volume
• Total Weight
• The Port of Loading* 
• Port of Destination 
• Insurance*
• Incoterm

*varies by the incoterm.

 One important thing that you need to know in advance the Incoterm, which should have been agreed on before manufacturing started. The incoterm will stipulate when the goods are handed off between the supplier and you and the buyer, and thus when the Freight Forwarder will pick up the goods. 

How to book a shipment

There are many ways to book a shipment, including asking your supplier for a recommendation, doing a google search, or one of the ever-growing platforms that allow you to book online. When I first started Sourcing, I had to call several-Freight forwarded on the phone and get quotes in a process that took hours. Fortunately, more freight forwarders are using online platforms and can quote instantly. For what it’s worth I predominantly use and prefer Freightos. 

• https://www.freightos.com/
• https://www.flexport.com/

What is the Cheapest shipping method 

For quick reference, this is the ranking of which methods of shipping are the cheapest by weight

1. FCL Ocean Freight
2. LCL Ocean Freight
3. Railway (China to Europe) 
4. Economy Air Freight
5. Express/ Priority Air Freight 

Shipping Scams 

Section coming soon

Final Thoughts 

Shipping is the final step before your product goes on sale, it is also one of the most overlooked steps. If you know what you are doing and are fully prepared shipping should go smoothly without any issue, however, if you wait until the last minute to plan and book then you can run into major issues, delays and lost money. 

It’s important that you start to get quotes before you manufacture your product so that you can come up with a full budget for the product manufacturing process. I personally have seen a case where someone finds an item in China that sells for about $5 from the factory and $60 in the US. Thinking they found an amazing deal, they bought 5,000 units. After the product was manufactured and paid for in full, they realized that it will cost an average of $40 a unit to ship since it is a large bulky item. They didn’t have the money for the shipment and ended up losing over $10,000 on the product. 

The point being, do not end up like them, do your research, understand the process, and know what the costs are. If you do this, you will have a great shipping experience!