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How container shipping works

 

On a consumer level, you might be used to the idea of being able to order goods or services from practically anywhere on earthand have it delivered within a reasonable amount of time, if not in a day or so. And while physical goods are generally shipped fromcentral facilities or warehouses, how do goods get to these places in the first place? Especially if they were originally madeoverseas (as so many goods often are.)

So, without further wait, here is everything you need to know about container shipping and some key terms and processes youshould be aware of if you want to look into it even further.

Types of containers

To start, let’s go over the types of containers available, used for different products, and in different shipping setups. If you areinterested in or want to know more about container shipping, try to learn at least each of the following types of containers, andperhaps look up more that might be more specific to your industry.

On top of all the above, you can safely assume there are variants of all the types of containers listed above (either in size or inadditional modifications.) There are also even more types of containers for specialized transport of goods, as some things requirecustom containers (not cheap, but necessary). For now, though, you likely only need to know about the seven types above.

Container sizes

Now that you are aware of what types of containers there are, what sizes are generally available ?

Containers are usually measured in the metrics of feet, and most containers are about 20-feet-long and eight feet-wide. Thatbeing said, there are also other sizes available, including 40-feet-long containers, 10-foot-long, and even 8-feet long. Containersare usually measured in TEUs, which determines how much cargo they can carry. There may also be a maximum weight limitassociated with a container, but this is unlikely to be an issue.

While most containers are eight feet tall as a standard, there are also taller containers (often referred to as high tops) that might beavailable depending on the shipping company and the goods needing transport. They can be tougher to handle, so they might notbe as commonly used. You might also find half-sized containers for more personal usage or much easier transport (by train ortruck).

Of course, much like above, there are also variations and custom solutions that we are not considering, although they will not benearly as common and applicable to you as the above options. As stated before, if you need a special container, you will generallyknow it ahead of time and work it into your solution.

The General Shipping Process

Now that you know what types of containers a company would theoretically be working with; we should break down each step thatgoes into container shipping. As with all longstanding industries and processes, there are multiple key steps. They have all beenworked out for some time, although incremental changes can occur with adjustments to legislation or technological advances.

As a quick note, we will be referring to the following:

  • Importer: The party or company that wants to receive cargo.
  • Exporter: Wants to send the cargo to the importer, likely after selling it.
  • Shipping Company: If the importer or exporter is not handling shipping in-house (unlikely), they will likely use the services of a shipping company, which will transport the cargo from the importer to the exporter. The term freight forwarder might also be used here.

    The importer can also potentially be the exporter, but we will assume they are different entities to break down the process. As with all things, there will be variances based on a specific situation, but the following will be the main trend.

The main process

While other guides might explain the following using different terms or add substeps, the following is a clear, if simplified, summary of how container shipping works:

Export Haulage: Products do not get to port just on their own, and most manufacturers are not set up right next door to one. For that reason, export haulage exists, in which the exporter or shipping company will forward the freight (generally by truck or train) to the port. This can take hours, days, or weeks, and the method will vary based on distance and geography.

Often the shipping company can or will arrange for this, but at other times either the exporter or importer must make arrangements to this effect. Export haulage generally ends when the cargo reaches the port for export.

Export Customs Clearance: The first of two main documentation steps required (at least for international shipping.) In this step, a licensed customs broker will clear the cargo to leave the country and receive a cargo declaration, breaking down all of its essential information.

It will generally be determined ahead of time who is responsible for taking care of this step (the shipper or the receiver). In most cases, it makes the most sense for the shipper to handle things, as their representatives will already be on the ground. However, some consignees or owners of the property to be shipped might have a presence in the country of origin that can handle such matters.

Documents and information will be required, but those documents vary by country, and you should check to see precisely what is needed, as the minute details can vary even depending on the cargo to be shipped. Generally, this step will be handled by the exporter or shipping company, and the importer will be notified if any information or additional documentation is needed.

Origin Handling: Origin handling can refer to all of the activities that occur after the container or items to be shipped have reached the exporting port but have not left yet. Any trucks or trains will be unloaded, and the cargo inspected and validated against existing records, and documentation takes place (also see the above step).

Following this, the cargo is generally placed into the port’s warehouse, and it waits there until the logistics and schedule dictate that it is time to load it onto a ship. A few days or so before it is scheduled to head out, the cargo will be loaded into containers and await loading onto the ship. A crane (usually) will load the containers on the ship, and the process will proceed from there once the ship leaves port.

Ocean Freight: The ship must eventually cross the ocean. The exact logistics of this will vary from ship to ship, although the freight forwarder (shipping company) will usually enter a shipping contract with the shipping line or owner or the freight vessel. The container will be placed on the vessel depending on the container type, and the voyage should ideally proceed without issue. Parties may or may not be able to track where your shipment is at any given point, depending on how many containers you are using.

The exact route can vary based on what is most efficient and any relevant deadlines. It is not uncommon for a cargo container to be transferred to multiple cargo ships through multiple ports (much like how people might change subway lines). There are usually fees associated with these extra ports or extra handling charges or steps. Still, an importer can generally assume they are included in the shipping’s initial price and planned for well ahead.

How long the ocean freight step takes naturally depends on how far the distance is between the two ports and how many stops are taken along the way.

Import Customs Clearance: To determine levies, duties, and other payments and make sure goods are as they should be, cargo must go through import customs clearance, much like export customers clearance.

Naturally, the exact process and requirements will vary from country to country, although responsible parties will generally tell you of anything needed, or the shipping company will handle the process for you as part of the arrangement. It is often the importer’s responsibility to handle the matter, but the task can be assigned or forwarded elsewhere.

You should note that this step can start a bit before the cargo arrives, as once the shipment has entered the border of the country,it has technically arrived (in most countries). Several different entities (a freight forwarder, a customs house broker, or the freightforwarder agent) can perform the clearance. Still, unless otherwise specified, the importer has to pay any related customs orimport fees.

Sometimes the freight forwarder will be unable or unwilling to perform customs clearance services, but the importer can find abroker if this happens.

Destination Handling: Much like how cargo is onboarded to the freight ship, there must also be an unloading process, and thatis destination handling. After documents are checked and everything is in order, the container is unloaded at the port and thenbrought to the warehouse, where the container is most likely unloaded. After unloading, the importer can collect the cargo directly,or other shipping processes (trucks, etc.) can ensue.

The freight forwarder is always responsible for this step, as they must collect the container from port.

Import Haulage: Once the cargo is in the import warehouse, it will travel, either by truck or train (or rarely plane) to the addressof the final destination. This last step is called import haulage, and it can be done by the shipping company if they have thecapabilities, or it might be outsourced to a trucking company or another shipping solution. Some importers might also makearrangements to have the cargo picked up on their own terms.

How exactly it happens will vary depending on the shipping agreement. Still, effectively it is the final step before the cargo isdirectly in the importer’s hands, which will then go towards manufacturing or the customer.

Models of delivery and possible pricing

Shipping costs are a significant expense for many companies, especially with large products. For example, try mailing a packagefrom the United States to Australia, or vice versa, and you will see just how expensive it can get for the average person. Whenmoving, some people will just decide to get new furniture instead of moving furniture cross-country due to the costs involved.

And while economies of scale impact container shipping and business, it still means that dedicated professionals have to work tokeep these costs low, and container shipping is their bread and butter for multiple reasons.

When a business, perhaps much like yours, is looking into container shipping, what is the pricing model? In truth, it varies andvaries greatly depending on the shipping companies and countries involved, but you can likely narrow it down to the followingmodels:

These might come under different names or have slightly different terms, but generally, this should cover almost everything andprovide a wide range of examples. As with most things container shipping, it would be wise to consult professionals about theprocess and not do things too quickly, especially if you are new to the process. Consulting a professional will also help youdetermine just which method of transport is the best one for you, and help you accurately work out the costs involved.

Responsibility for damages

While most shippers will make every effort to minimize damages to cargo and cargo containers, that does not mean that accidentsdo not occur and that arrangements should not be made regarding compensation for damages. The importer, exporter, or shippingcompany can be responsible, although the exact details depend on contracts, existing arrangements, etc.

With global container shipping, should you become involved, be careful about signing anything or agreeing to anything ahead oftime, and make sure that you are using trusted shipping companies and personnel, wherever that is in your control. Also,remember that accurate documentation is in the best interest of everyone involved.

The importance of global shipping

Think about all the items in your household or office that were not made in your country (and perhaps even quite a few that were).All these things had to make their way to your doorstep from manufacturing somehow, and the likelihood is that containershipping played a part. If you have a business involved in manufacturing or importing retail goods from other countries (as manybusinesses are), you should know exactly what goes into that.

How container shipping works: A global solution
Global shipping is not just a process that exists on the periphery of most people’s minds. It is a process that is effectively thecirculatory system of the economy, and every cargo container is a cell bringing people what they need, where they need it. It worksaround the clock and keeps businesses and people afloat.

Conclusion

Anyone who has worked with container shipping before can tell you that there is a lot more to it than the simplified concepts andsteps listed above. It is a massive industry, a career for many, and one of the reasons we enjoy so many amenities of modern life.We hope that this article allowed you to grasp the process better and answered any questions that you might have, and weencourage you to bookmark this page and research further if the topic is important to you. There are so many nuances we couldnot go over today, but they too are important.

This article was originally published on Conexboxes.com. No one makes it easier to save while getting a fully customizable steel storage container quote in minutes. Conex Boxes offers steel shipping container solutions – storage containers. Meet Conex Boxes and find the original article here. 

For more articles about containers, click here. 

Narjiss Ghajour

Editor-in-Chief of Maritime Professionals

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