WHAT YOU MUST CONSIDER BEFORE DECIDING WHETHER TO SEND YOUR CARGO BY AIRFREIGHT or SEA FREIGHT

This is one of the commonest question we get asked. Must I use airfreight or sea freight to transport my cargo? Whether you are a business that is moving to new location overseas or returning resident from overseas or an expatriate relocating, a decision will need to be made as to what means of transport you must use. The choice is not always obvious as there are 4 main factors to consider before making the decision of Airfreight vs Seafreight

1) Cost
This is an obvious consideration. If you are a business, you consider cost and its bottom line and if you are an individual, you consider your budget. There is a generally acceptable view that sea freight is cheaper than airfreight. This is not always the case. You need to understand the differences in how airfreight and sea freight cargo are charged.

Airfreight is generally charged by airliners based on what is called CHARGEABLE WEIGHT. This is calculated as a combination of cagro's weight (kg) and size expressed as height (cm) x width (cm) x length (cm) divided by 5000(5000 is a conversion factor used to convert volume to weight).

Seafreight is generally charged by shippers based on size of the container (20 or 40 foot)- sometimes called Full Container Load (FCL). However, if shipping  cargo that are less than a full container (LCL), weight and size then become factors to consider.

If shipping less than a container load, the cargo is charged per cubic meter (expressed as height (cm) x width (cm) x length (cm) The bigger and the heavier your cargo is, the cheaper it is per weight measure to send by sea.As shipment gets smaller, the margins also become smaller, hence at times it becomes cheaper or almost the same to send smaller cargo by air than by sea. Consideration of destination charges, storage costs and documentation fees need to be considered when shipping by sea because at times it may be cheaper to send than actual cargo by sea, but when you factor in destination charges and other customs and excise costs, it will work out to be more expensive than airfreight.

2) TIME//SPEEDThe faster the delivery time, the more expensive it becomes. Airfreight is  generally suitable for time sensitive light weight goods. Unless your budget allows you, large items such as household effects and industrial heavy duty equipment is usually more economic to send by sea. Air freight generally takes a few days, while seafreight can take up to a month from departure country to destination country.

3) RELIABILITYAny business or individual want a reliable service. However, you need to be aware that there  are factors beyond the air freight and seafreight services which may cause delays. Bad weather and natural disasters affect both airfreight and seafreight. It is a known fact that although airfreight suffers delays, there is a fast turn around of a day or two to correct schedule, whereas seafreight delays may run into days or even weeks. Any delay has cost implication and therefore when deciding which method tO use, put cost implication into your decision.

4) ENVIRONMENTAL IMPACTEnvironmental Impact awareness is playing a major role in affecting how businesses and individuals make decisions about which means of transport they use. Seafreight is considered environmentally more friendly than airfreight.
Current trends show that individuals/ companies tend to favour to do business with companies that have considerations of impact of their business to the environment. This is still a voluntary choice in most countries but if you consider issues of oil spillage and damage to the ecosystem by seafreight, the choice may not be necessarily easy to make.

We will therefore leave you with a bit of information to consder before deciding which method to use. 

THE CONTAINER DEPARTMENT, WHAT DO THEY DO?

It has been called many names – Equipment Control, Container Control, Logistics, Container Department – whatever you call it, it is one of the most dynamic departments’ within a shipping line’s (and by extension the ships agency’s) business.

What does this department do..??
A container department looks after containers belonging to a shipping line or NVOCC operator.
It monitors the containers that enters and exits the country and ensures that they are properly tracked, monitored, maintained and utilised while in the country..
Containers come in various size and types including below most common size/types

• 20′ Dry, High Cube (some countries), Open Top, Flat rack, Reefer, Tank, Hard Top, Garment On Hanger

• 40′ Dry, High Cube, Open Top, Flat rack, Reefer, Hard Top

• 45′ Dry, Reefer

1. The details of the container such as Container number, ISO Code, ACEP, CSC Plate, Tare weight etc have to be captured into the shipping line’s system.
2. The current status of the containers (empty, full, damaged etc) have to be updated in the system and as and when the status of a container changes, the system has to be updated.
3. Only if this is done the customer will be able to track the progress or status of their containers using the shipping lines online tracking system.
4. These status changes/updates are received from the container depots, ports, ICD terminals either via EDI or email generally on a daily basis.
5. Daily co-ordination with the empty container depots, issuing empty container releases for export packing, liaison with the port, rail authorities and transporters are part of the everyday life for someone in the container department.
6. Maintenance & Repairs (M&R) of the containers has to be monitored and checked to ensure that the standards of the containers are not compromised.
7. In the case of special equipment such as reefers, the information relating to the performance during PTI, machinery etc has to be checked and verified carefully.
8. On-hiring of containers when there is a demand situation and off-hiring of containers when there is a surplus situation. Both on-hire and off-hire of course would depend on the equipment situation in a particular area at that particular time.
9. Steering of empty containers from surplus areas to demand areas and vice versa.
10. Monitor container seals.
11. Monitor collection of demurrage/detention as the case maybe for import and exports.
12. Making sure that the equipment costs are kept to a bare minimum as this is one of the most cost sensitive departments and one that could make or break a container service.

There are quite a lot of processes involved within the container department.
Equipment cost accounts for more than 20% of the total operating cost for a shipping line and depending on the number of containers in circulation this cost can easily run into millions and needs to be tightly controlled.


This department is linked very closely with all the other departments within the organisation – imports, exports, accounts & sales and plays an active part in the commercial working of any shipping line or NVOCC..

TIPS TO SHIP OVERSEAS

For manufacturers, wholesalers and retailers, shipping products quickly and reliably to clients and customers is a major concern. But transporting goods by ground, sea or air domestically or internationally can be a complicated operation for business owners who haven't explored every shipping method and the cost associated with them. 

Although shipping internationally can be daunting, it really isn’t any more difficult or confusing than shipping within your own country. Here are tips to smooth the process:

Research Costs

Just like with local shipping, it’s important to get the costs right so you don’t lose money or customers. However, that doesn’t mean you need to know the cost of shipping to every single country in the world. I recommend checking online or taking a sample package to your local Post Office and finding out these key pieces of information:

• How much would it be to ship to the country with the highest shipping cost?
• How much would it be to ship to a few of the most likely destinations?
• How much extra would it cost to get tracking and/or insurance?
• What is the process for sending international packages? 

With this information you can start by setting up just 1 or 2 different international rates, using the highest cost to be sure you don’t lose money. As you get orders from other countries, you can research those as you go and expand your settings by adding rates for those countries, if they are very different.

Customs Regulations

Every country has different regulations regarding import taxes and acceptable import products so it’s unreasonable to expect you to research them all. It is standard practice, with retailers large and small, that the customer is the one liable for any import fees and duties. That being said, it is worthwhile to include that information in your FAQ section so it doesn’t take the customer by surprise when they suddenly get a bill for extra charges.

You should be aware of any regulations regarding the import (and export) of your specific product, at least for the countries you most-commonly ship to. 

Be sure to fill out any forms accurately and in detail. If customs have to seize a package because the description of the contents isn’t detailed enough or doesn’t seem to match the contents, this will mean long delays on shipping times or even the destruction of the package. It is also illegal to mark an item as a gift when it is not. Customers may ask you to do that so they don’t have to pay import taxes, but you will be the one liable if it is discovered.

Insurance

Tracking and insurance can mean a significant price increase on international shipments, depending on the shipping provider. However, the risk of packages getting lost in international transit is typically higher because the package is usually transferred from one shipping service to another. Providing the option of tracking at an additional cost to the customer is one way to mitigate this. Alternatively, you can build sufficient leeway into your pricing such that you are able to replace the occasional package when it goes missing. This option may work out cheaper in the long run, depending on the additional cost of insurance and the frequency at which packages go missing.

Don’t be freaked out if your shipping costs turn out to be quite high once you have done the research. Obviously, it’s great if you can find cheaper solutions, but there’s no point cutting costs if it’s just going to lose you money. International customers are usually well aware that they will have to pay high shipping costs and they are happy to do so to get hold of the products they really love and can’t find anywhere else!

DIFFERENCE BETWEEN LOGISTICS AND SUPPLY CHAIN

The terms "supply chain" and "logistics" are often used interchangeably within the transportation industry. They are, however, distinct areas, each involving specific processes, duties and responsibilities. The confusion in distinguishing between supply chain and logistics might stem from the fact that logistics is considered by many people to be a subcategory of supply chain management. The main difference between supply chain and logistics is that logistics is merely a specialized part of the entire supply chain process.

Generally, logistics focuses on the actual transportation and storage of goods. It deals with things such as inbound and outbound freight, reverse shipping, communications during transit, storage and warehousing. Logistics also deals with the delivery of goods and freight, coordination among third-party carriers, fleet management and other activities directly related to the actual transportation of goods from one point to another. Depending on the needs of a particular company, logistics management might also encompass manufacture and packaging, price negotiation for different aspects of transportation, third-party integration and procurement, technology, communications and customer service.

Supply chain management is a broad, integrating process that entails many other aspects aside from logistics. Those aspects include finding and obtaining the goods to sell, negotiating pricing, manufacturing, storage, packaging and inventory control. Supply chain management also includes distribution, cost allocation and control, third-party negotiation and collaboration as well as management of supply and demand. The broad territory covered by supply chain management is why some of these processes have splintered off into another subcategory of supply chain management known as demand planning, which, like logistics, can be viewed as a separate but related area of expertise.

The details and precise definitions for both the process of supply chain and logistics will vary from company to company and will overlap to certain degrees. By necessity, many of the duties and responsibilities inuring to logistics management will cross over into supply chain management and vice versa. Depending on the size and specialization of a particular company, the two areas might be lumped together as one, and the same individual might manage both the supply chain and logistics. Any person seeking to become involved in either supply chain management or logistics management within a company should ensure that the parameters of his or her responsibilities are clearly defined.

THREE KEY POINTS FOR INTERNATIONAL SHIPPING DURING THE HOLIDAY SEASON

The holiday season is upon us. Most people are full of joyful anticipation, but in our business we are also very aware of the special concerns regarding international shipping. Here are three key points to keep in mind: 

• Half of all retail business occurs at this time of year. This puts tremendous stress on the infrastructure we depend on. A straightforward shipment with reasonable rates in a different time of the year can become much more costly now. We must be much more judicious when choosing which shipments to export or import at this time of year. We also need to have a plan B when our usual carriers, truckers, or vendors become overwhelmed and might not be able to give us the timely service we are accustomed to receiving.

• Many businesses must close out their budgets for the year and are hyper aware of any “surprise” expenses. Due to the increased congestion in almost all areas, there is a much greater chance for storage charges and demurrage. We must not let our guard down when freight is available. When the clock for storage starts ticking, we must make sure the truckers know we are looking over their shoulder.

• Much of the world shuts down for the holiday. The timing of your international shipments is critical. Some overseas businesses close for weeks. Make sure to confirm with your clients of their scheduled closings so you can plan your shipments accordingly.

With these helpful tips, you should be better prepared for the coming holidays. I hope your holidays are joyful and fruitful.

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