International Shipping & Freight Forwarding Blog

The world is a big place.

... And there are millions of people out there committed to bringing us closer together. WE happen to be apart of that group. As international freight forwarders, it is our main duty to move cargo across borders.

On paper, that's what we're here for - but it's not exactly the reason why importers and exporters turn to us when it comes time to deal with international cargo transport. After all, there are PLENTY of options out there, many of which, are quite huge - I'm talking about the huge freight conglomerates you see everywhere.

Then there are the guys like us - family owned and operated, and we have no intention of changing (why would we after more than 30 years?). If you're wondering why, allow me to walk you through a little comparison.

Labels are important... in shipping:

There are a lot of different ways your freight can be handled from one stop to the next. Some important things to think about are risk, ownership, and responsibilities... They all transfer from seller to buyer at some point, but where and when it occurs can vary widely depending on the preferences of the parties involved, the type of cargo you're transporting, how far it's going, and how many borders it's crossing.

But there is one method that I prefer to use above all else for about 80% of our shipments. It's known as Incoterm FCA, or Free Carrier, and it's for good reason.

Greatness, even in shipping, comes from repetition

Over the 30+ years I've been doing this, I've received shipping requests for everything you can possibly imagine... from cars, to factory equipment, to entire factories! Some of our business comes in the form of one-offs, but we also have our regulars, who import and/or export frequently.

For those of you who ship often, we have to find a rhythm, build rapport, and establish transparent lines of communication quickly, because there are no second chances. Your shipments are important, and if they don't arrive on time, or there are numerous "unforeseen" circumstances right out of the gate, that's not going to make you feel very confident the next time through.

There's also a quick turnaround expectation, so the issue becomes compounded. But, we have a system, and I'm going to share it with you! Today, I'm going to talk about Air or Ocean Freight Consolidations or full straight container loads.

What's an FOB? Or a CIF for that matter?

When shipping to or from an overseas country, you need to understand the proper purchase & freight terms dictating costs and responsibilities. After all, who likes dealing with unexpected costs, or worse, disasters associated with misunderstandings and incorrect interpretations? Obviously, nobody, but with international freight, you're dealing with other countries, which means different customs, different languages, and different expectations - all of which will impact your shipments.

In one of my recent posts, I outlined a project that we took on after the shipper painted himself into a corner by not having his basis covered before putting all of his belongings in a container heading for Germany. (read more about it HERE)

The point I always try to express is that we want to start off on the right foot, because there are things we can't control, like customs inspections, labor issues, or other political, economic, or environmental challenges - and I would rather help you navigate through those, rather than things that could have been avoided if a little more care were taken in the planning process.

Terms are so important when working with foreign entities where language and cultural barriers may exist, so I've put together something that will take the mystery out of the shipping process for those of you who are concerned about protecting your investment and knowing your responsibilities - Your 2010 Incoterms:

Freight industry jargon is the worst, but Incoterms are necessary

I know how dull freight can seem to those not in the freight forwarding industry. The amount of jargon we use is overwhelming, and to outsiders, it probably feels a little obnoxious.

But it's not without reason. You have to remember, we're dealing with international policies that impact every country on the planet. That's a lot of different languages, laws, cultures, and governments, so we just have to deal with it.

The good news is that I'm always sharing my experiences, and after more than 30 years in this industry, there's a lot to share!

The better news is that there are organizations out there that are making it easier to understand the rules of engagement for international trade, and today I'm going to go over the most important guidelines there are.

Putting the right foot forward :

Not all shipments are large & cumbersome, but whether air or ocean ALL shipping will need the right information to start with. You'll also need to pick the right services to fit your specific needs, because even though many are competing for your business, there are a LOT of different answers out there, and choosing the right one could make or break you.

Wash & rinse, but don't forget to repeat!

It's true what they say, that history does, in fact, repeat itself, even the good stuff. The 90s seems like a long time ago, and back then things were really good for international trade, especially for my company, ETC International Freight System. We seemed to have the golden touch, and even had clients that nicknamed us "Midas International."

Don't get me wrong, because we take a lot of pride in our work, and we know that our services are superior, but international freight shipping is complicated, and there are many outside forces that we cannot control, which could cause setbacks for anybody.

There was a lot of pressure due to this apparent golden touch, and we survived and thrived under it. Today, it feels very similar to what it did in the 90s even though a lot has changed - the technology we use, the international networking system, many of the people involved, and the expectations of our customers.. all of this has changed, but there are some interesting similarities as well.

Different freight shipments come with different rules

Last week, we wrote about C & F versus CIF destination (more here). This week, we have a quick tutorial for shippers who are sending freight to their destinations via air or ocean consolidation services with two very important terms in mind: Delivery duty paid (DDP) versus delivery duty unpaid (DDU).

Although it's not all that common for shippers to export all the way to their international customers’ site, it happens when affiliated or when a buyer requires a price to its final destination door, which, as you probably know, happens enough to care about getting these details right.

What does CIF stand for, you ask?

If you're shipping products overseas or importing to the United States, you're faced with a flurry of industry jargon that can get really confusing really quickly. But knowing these terms will likely prove quite valuable to you, so you are getting the best relative prices while meeting the demands and resources of your organization.

This is a term that we use and see quite a bit, so let me help you understand a little more about the acronymn itself and why exactly it exists, so you can identify whether it's right for you.

Supplementing your global freight management strategy with letters of credit can be challenging but worthwhile.

Whether shipping an import from China, an auto export to Dubai, or machinery somewhere else internationally, a global management approach using a reliable freight forwarder can be the difference in a successful delivery with minimal twists and turns and, well... everything else. The freight logistics machine is complex, challenging to navigate, and entrenched with restrictions and regulations that must be followed for customs and a variety of other agencies when imports or exports are involved.

Sometimes shipping under a letter of credit is the way to go. For a bank to issue one, they are indicating a validation of their customer (the buyer), which is worth the money when executed correctly. The fees can be paid by the buyer, the seller, or shared between the two. If the selling party successfully prepares the letter of credit correctly & presents it to a bank for negotiation, the funds can be transferred within as few as 10 days of the presentation of all the required documents.

This kind of financial flexibility is actually quite advantageous, and that kind of backing from a bank can open many doors for trading and transportation.