1. What is sea freight (ocean freight)?
Sea freight refers to the transportation cost of international cargo moved by sea between the carrier’s Container Yards (CY) at the origin and destination ports . It typically covers ground transportation of containers between CYs and seaports at both ends but excludes inland trucking (e.g., factory-to-CY delivery), customs clearance, cargo stuffing, duties, and insurance .
2. What is the difference between FCL and LCL?
- FCL (Full Container Load): Using an entire container exclusively for one shipper’s cargo, suitable for large shipment volumes.
- LCL (Less than Container Load): Sharing a container with other shippers’ cargo, cost-effective for small batches of goods .
3. What do FOB, CIF, and DDP mean under Incoterms 2020?
- FOB (Free On Board): Risk transfers to the buyer once goods are loaded onto the buyer’s nominated vessel. Only applicable to traditional sea transport (not container CY handover); covers export customs .
- CIF (Cost, Insurance, Freight): Seller pays for cost, freight to destination port, and minimum insurance (ICC-C coverage). Risk transfers at origin port .
- DDP (Delivered Duty Paid): Seller bears full responsibility, including delivery to buyer’s premises, customs clearance, and all taxes (e.g., EU VAT) .
4. What is a Bill of Lading (B/L), and who issues it?
A B/L is a critical document serving three roles: receipt of goods, contract of carriage, and document of title . It is issued by the carrier or its authorized agent to confirm cargo loading and condition . Common types include Original B/L, Telex Release B/L, and Sea Waybill .
5. What surcharges are common in sea freight?
- BAF (Bunker Adjustment Factor): Fuel price fluctuation surcharge .
- GRI (General Rate Increase): Scheduled base rate hike by carriers .
- Terminal Handling Charges (THC): Port/yard operation fees at origin and destination.
6. How are customs duties and taxes calculated?
Duties are determined by the destination country’s customs authority based on the cargo’s HS Code (Harmonized System Code) and declared value . HS Codes are 8-10 digit classifications for global trade standardization . Taxes (e.g., VAT, GST) vary by country and product type.
7. What is a Telex Release, and when is it used?
A Telex Release allows cargo release without presenting the original B/L. The carrier sends an electronic instruction to the destination agent, often used for trusted trading partners or to avoid delays in B/L transit .
8. Can I insure my sea freight shipment?
Yes. Basic CIF terms include ICC-C insurance (covering major risks like vessel sinking), while full coverage (ICC-A) requires additional negotiation . Insurers require detailed documentation (e.g., B/L, photos) for claims .
9. How do I track my sea freight shipment?
Shipments can be tracked via:
- Carrier websites (e.g., Maersk, COSCO) using the B/L number or container number.
- Third-party platforms (e.g., MarineTraffic) for real-time vessel location updates .
10. What is ISPM 15, and how does it affect shipping?
ISPM 15 is an international standard for wood packaging (e.g., pallets, crates) requiring heat treatment or fumigation to prevent pest spread . Non-compliant packaging may be rejected or destroyed at the destination port.
11. Who can act as the Importer of Record (IOR)?
The IOR is responsible for customs compliance at the destination. Typically the buyer, but some freight forwarders offer IOR services if qualified . The IOR must provide accurate documentation and pay duties .
12. What causes customs delays, and how to avoid them?
Common causes: Incorrect HS codes, incomplete documentation, undeclared goods . Mitigation: Verify HS codes with customs experts, submit documents 24+ hours before shipment, and avoid misdeclaration .
13. What should I do if cargo is damaged upon arrival?
- Stop unloading immediately and take photos of the container (seal, exterior) and cargo before unpacking .
- Issue a Damage Report to the carrier and insurer within the claim window (1 year under Hague Rules, 2 years under Hamburg Rules) .
- Provide supporting documents (B/L, packing list, inspection report).
14. How long does international sea freight take?
Transit times vary by route:
- Asia to North America (West Coast): 12-18 days.
- China to Europe: 25-35 days.
- Factors affecting speed: Direct vs. transshipment, port congestion, and weather .
15. What is a Container Yard (CY)?
A CY is a designated area for storing and handling containers before loading onto ships (origin) or after discharge (destination). Sea freight costs typically cover CY-to-CY transportation .
16. Can I ship hazardous materials via sea freight?
Yes, but strict regulations apply. You must declare the hazard class, provide a Material Safety Data Sheet (MSDS), and use certified packaging. Non-compliance may result in fines or cargo seizure .
17. What is the difference between “Live Load” and “Drop and Pick”?
- Live Load: The driver waits while cargo is loaded/unloaded (charges for waiting time if delayed).
- Drop and Pick: The carrier drops an empty container, collects it later after loading (more flexible for shippers) .
18. Who handles shipment pickup?
Freight forwarders coordinate pickup with licensed carriers equipped for the cargo type (e.g., reefers for perishables). Shippers need to provide supplier contact details for coordination .
19. What is an Arrival Notice (AN)?
An AN is issued by the carrier to inform the consignee that cargo is approaching the destination port. It includes details like ETA, B/L number, and required documents for pickup .
20. What items are prohibited in international sea freight?
Prohibited goods include explosives, narcotics, counterfeit products, and perishables without proper packaging. Restrictions vary by country (e.g., food imports require health certificates) .