Freight Shipping Guide

Price shopping is important but choosing the cheapest carrier may not be the most prudent choice in the long run. Always research the reliability of your carrier(s) before making a decision. Supply chains can be disrupted by port congestions and closures, labor shortages, containers and space shortages and capacity issues. Make sure your ocean freight carrier has access to the equipment and space to keep the booking promises they make. And always choose reliable air carriers who will be able to load your shipment on a booked flight, not a series of partial shipments.

Ensuring the integrity and safety of your goods is important. Know your goods—and your customer’s expectations—and choose accordingly. Goods traveling via ocean or rail transport are more prone to damage or loss. Air and land transport is safest for shipping fragile or perishable goods. As mentioned above, always be aware of the reliability record of your chosen carrier.

Choosing the right mode of transportation can reduce logistics costs, mitigate delays, improve customer experience and generally optimize your supply chain.

How quickly you need your goods to be delivered impacts both shipping mode and cost. With more advance planning and logistics flexibility, you can improve efficiency, optimize routes and modes and save you money. But, in the most urgent situations, you may need to turn to next-day or even same-day options.

Generally, air freight shipping is going to be the most expensive shipping option, while ocean freight is going to be the least expensive shipping option. Also, look for unique intermodal freight shipping options that might be just right when air freight is too expensive and ocean freight is too slow.

Generally, the greater the distance between the original pick-up point and final destination, the higher the shipping cost. But additional factors like geographic location, complexity of pick-up/delivery and fluctuating fuel costs can also be factors. An experienced 3PL can help you develop supply chain strategies to help cut freight costs and maximize your transportation budget.

Unforeseen disruptions like port closings, labor and equipment shortages, labor issues and fuel shortages, not mention weather strikes, can all create capacity issues and budgeting obstacles that can increase freight rates with little notice.

Seasonal trends can have a significant impact on freight costs. With more demand comes higher cost. At times when transportation becomes a higher priority, rates increase. To avoid seasonal surprises and blowing your freight budget, it’s critical to have timely and accurate business forecasting.

Contains information about the commercial transaction between the shipper and consignee/receiver, typically with these characteristics:

• Printed on company letterhead
• Full details of shipper, consignee, intermediate consignee, etc.
• Reference numbers (Invoice, Purchase Order, etc.)
• Date
• Description, quantity and value of goods
• Original signature in blue ink
• Used to determine duties and taxes
• Used by exporter in processing original terms of sale or when quoting pricing

A letter from the shipper instructing the shipping company how the shipper wants the shipment handled, typically containing:

• Detailed shipper and consignee identification
• Air waybill or tracking number
• Service requested
• Key reference numbers
• Payment terms
• Commercial shipment value
• Insurance coverage requested
• Limited export power of attorney

Previously known as the Shipper’s Export Declaration (SED), this filing is generally required by the US Census Bureau for US exports containing a single commodity with a value exceeding US$2,500. EEI is also required for shipments of items on the US Commerce Control List to military end use countries. EEI information is provided to the US Census Bureau and is used for export compliance and governmental reporting. It provides the following information:

• Trade information
• Commodity identification using the Schedule B number
• Employer Identification Number (EIN)
• Signature of exporter or representative with power of attorney
• Information about export licenses that might apply

Defines the origin of the goods being shipped. It is not required for all shipments, only those going to specific countries that require it for Customs clearance, or when it is specifically required in the terms of the transaction. It:

• Attests to the origin of where the goods were manufactured
• Requires full details of shipper, consignee, description, pieces, weight, markings and mode of transport
• Is stamped by the Chamber of Commerce and signed by a notary public
• May allow favorable duty rates
  
  *Israel has its own Certificate of Origin

Extra documentation is required for articles or substances that can pose a risk to health, safety, property or the environment, and are shown on the list of dangerous goods in the Dangerous Goods Regulations. Shipment of dangerous goods by air is highly regulated. Specific processes and procedures must be followed for documentation, package marking and labeling, as well as shipment handling

Import fees vary based on the type of goods, their value and any unique regulations in the receiving country. Import duties are assessed on goods that exceed the minimum taxable threshold for imported goods. Goods valued under that threshold incur no import duties.

If your shipment exceeds the tax threshold, the customs officer checks to see if duties and taxes have been paid. Additionally, certain restricted goods may incur fees regardless of their value. The shipper/consignee should determine in advance how these fees will be paid.

1. Delivery Duty Paid (DDP) — This means import duties and taxes have already been paid. When choosing DDP, the price you paid for shipping covers any import fees, which is reflected on the attached shipping label. This is the best, most recommended way to ensure a smooth customs clearance process.
   
   
2. Delivery Duty Unpaid (DDU) — This means import duties and taxes are not included in the price of the shipping. In this instance, the customs officer forwards the shipment to an independent customs broker to collect the required fees. These fees can become more expensive, with additional variable charges for brokerage, storage and possibly late payment. In addition, the broker will contact the recipient to collect payment, which may be surprising or upsetting to customers.

Once all duties are paid and clearance is complete, your shipment can be transported from Customs to its final destination. With thorough attention to detail in filling out forms and paperwork, shipments rarely get stuck at customs. 

Cargo Insurance is elective coverage (meaning you can purchase it or not) based on the actual value of your cargo. Generally, cargo insurance fees are in addition to the carrier’s liability. The advantage is that you have coverage for the total value of your goods.

• What’s covered/not covered? Cargo Insurance covers just about any type of damage for almost any reason. Some types of cargo may not be covered, depending on the policy. Service guarantee failures may also not be covered. Again, understand the fine print on your policy.
• Who’s at fault? With cargo insurance, you only have to prove that damage or loss occurred while the goods were in the carrier’s possession.