Truck driver ocean freight companies

As the shipping method responsible for transporting 90% of global goods, ocean freight is by far the most popular shipping method around the world. Of course, there’s a reason why. From cutting costs to providing a higher capacity, there are many reasons why companies choose ocean freight. While ocean freight isn’t the perfect shipping solution for every occasion, it’s still an important option you should know about. Fortunately, this article will cover everything you need to know about what ocean freight is, how it works, and the many pros and cons of choosing it as a shipping method.

What Is Ocean Freight?

Ocean freight is a shipping method that involves transporting goods across the sea. For this reason, ocean freight is especially popular for shipping between different countries or shipping a massive quantity of goods. The goods transported using ocean freight can be shipped in many different ways, but the most popular method is container shipping. With container shipping, goods are shipped in large metal containers, typically 20 to 40 feet. These containers are then loaded onto ships that can be over 1,000 feet long. Again, that means you can fit a lot of containers and other cargo on these massive ships. Once loaded, an ocean freight company will then ship the goods across the ocean. Depending on the origin and the destination, these voyages can take anywhere from 12 to 60 days.

Why Use Ocean Freight?

Ocean freight’s usefulness can be dependent on your circumstances, so it’s important to understand when and why you’d be contacting companies for services. Here are a few reasons why you might want to consider ocean freight:

• You’re Shipping a Large Number of Goods. Ocean freight is a great choice if you have a large number of goods. That’s because ships can hold a massive amount of cargo, and you likely won’t have to pay much more for shipping those larger quantities. On the contrary, you may even receive discounts for shipping more.

• You’re Shipping Heavy Goods. If you’re shipping heavy goods over long distances, ocean freight might just be your only option. That’s because planes have far lower weight limits than ships, and even if you could ship those heavy goods on an aircraft, you’ll be paying far more to do so.

• You’re Shipping Internationally. If you’re shipping to another continent, odds are that you’ll need to cross an ocean to do so. While your goods could perform this journey on a plane, you’ll save far more money by shipping using ocean freight.

• Your Business is Based Around a Major Port. If your business is based around a major port city, such as Los Angeles, California, or New York City, New York, the cost to use ocean freight might be even more affordable.

Types of Ocean Freight Services

In general, container shipping is the most popular option for transporting goods across the sea. That’s because container shipping provides a safe and easy method to transport large quantities of goods. At any time, crates can easily be moved from one place to another using cranes and other machinery. Overall, there are two main types of container shipping methods. These are:

• Full Container Load (FCL): If you have goods that will take up the entirety of one or more containers, you’ll likely choose FCL shipping. With this service, you’ll have an entire container(s) all to yourself.

  Of course, one of the biggest pros to this type of shipping is safety and security, as your shipment will be undisturbed until you open it yourself. However, FCL shipping is also far more expensive than the next option.

• Less Than Container Load (LCL): If you don’t have enough goods to fill a full container, you can opt for LCL shipping. This type of container shipping allows you to cut costs by sharing a container with other people.

  While this method will help you save money through splitting costs, it also leaves your goods more vulnerable to mishandling or damage.

Pros of Using Ocean Freight

If the situation is right, there are many pros that come with using ocean freight companies to ship your goods. Here are some of the top benefits of using ocean freight:

1. Capacity

   If you’re shipping in bulk or shipping a large number of goods, ocean freight might just be a perfect fit. Depending on the size, a cargo ship can carry anywhere from 10,000 to 24,000 TEUs. For context, one 40-foot container is equivalent to only 2 TEUs.

2. Fewer Restrictions

   While shipping through air freight may be one of your only other options, it’s far more restrictive. Not only are your goods limited by weight, but you also won’t be able to ship flammable products (e.g., perfumes and alcohols) or biochemical products (e.g., medicine). However, ocean freight doesn’t have the same restrictions, meaning that you’ll have far more freedom to ship whatever goods you need to.

3. Eco-Friendly

   All shipping methods have a carbon footprint, but ocean freight is far more environmentally friendly than air freight. For example, every ton of freight emits over a pound of CO2 per km of transportation on an airplane, while every ton of freight emits only 0.35 to 1.4 ounces of CO2 per kilometer on a ship. That means the average plane would produce nearly 16X more carbon per ton of cargo than a ship would.

4. Affordability

   Affordability is one of the biggest advantages of using ocean freight. Ocean freight services cost an average of only 50 cents per kg, while air freight cost anywhere from $4-$6 per kg, depending on the speed of service. Overall, freight can be up to 12X more expensive than the ocean freight.

Cons of Using Ocean Freight

As with anything, there are also a few cons that come with choosing ocean freight companies to transport cargo. To understand the problems you might face, here are those disadvantages in more detail:

1. Long Shipping Times

   Compared to air freight, ocean freight takes considerably longer. For example, an ocean freight shipment between the U.S. and China typically takes between 30-40 days, while that same shipment by air would only take three days. In fact, air freight is typically 5-6X faster than the ocean freight.

2. Unpredictability

   Ocean freight shipping can already take a long time, but wait times can always be made worse through unpredictable factors. External shipping issues like bad weather, customs delays, and port congestion can all have very negative effects on ocean freight. All of these problems have the potential to add days or weeks to your delivery while also being extremely hard to predict or prepare for.

3. Less Protection

   Every extra day in transit adds potential risk to your goods. After all, it’s more likely that something will break in the span of 30 days, as opposed to only three days. On top of that, storms and other issues can also make your cargo more susceptible to damage.

How to Use Ocean Freight Company Services

In order to have your goods shipped using ocean freight, you’ll need to contact a third-party freight forwarder. These companies will pick up your goods, organize them, and then load them on board a cargo ship. Freight forwarding companies are a crucial part of the puzzle because they offer you trusted eyes and hands that can help keep your goods safe. To work with a company, you’ll likely need to sign a shipping contract. Given that there are international rules governing ocean freight, these contracts (incoterms) serve as an important way to maintain those rules. Typically, incoterms define the shipping process, as well as outline what you will be responsible for as the buyer. Some common incoterms include:

• Free on Board (FOB): An FOB agreement is a contract that allows buyers and sellers to share responsibility. In the delivery process, the seller takes responsibility for packaging, labeling, and loading the goods correctly for shipping. In turn, the buyer is responsible for the goods after they’ve been loaded onto the ship.

• Ex Works (EXW): This contact places additional responsibility on the buyer. Under this agreement, the buyer is responsible for picking up goods, as well as transporting those goods to their final destination.

• Delivered Duty Paid (DDP): Under a DDP agreement, the seller takes on the largest portion of responsibility. The seller is responsible for the cost of shipping, as well as ensuring the safety of the goods throughout the transportation process.

Obviously, different companies will offer different contracts that come with different price tags, so it’s important to do your research beforehand. Then, after deciding your shipping terms, you’ll go through the following stages:

1. Export Haulage

   First, your goods will be transported from your warehouse to the freight forwarder company’s warehouse. Under a DDP contract, your obligation ends here, but under other agreements, you will resume responsibility later on.

2. Export Customs Clearance

   Next, most countries will require the goods to go through clearance. This is usually for safety purposes, as well as organizational purposes. During clearance, a clear and detailed decoration of the cargo will be provided, as well as supporting documentation.

3. Origin Handling

   After your goods pass customs clearance, they’ll be moved to a staging area for inspection and confirmation. The confirmation process is fairly fast and will provide a receipt that confirms the goods have been received as described. If your goods are being shipped as FCL, they’ll then be stacked in a container. However, if your goods are LCL, they’ll be placed in another warehouse until they’ve been properly consolidated with the other goods going in the same container.

4. Ocean Freight

   Ocean freight refers to the process of actually transporting goods across the ocean. This is typically the longest stage of transportation, taking anywhere between 12-60 days. Under a FOB or EXW contract, you’ll be responsible for the goods over the full length of this stage.

5. Import Customs Clearance

   Similar to export customs clearance, this stage entails completing forms, declaring cargo, and paying fees once the goods land in their destination port. Depending on how congested the port is, this stage can be a shorter or longer process.

6. Destination Handling

   During this stage, the goods will be transported to a location where they can be confirmed, and then the container will be transported to the freight forwarder’s warehouse. While being confirmed, documents such as the bill of landing will be checked as well. The goal of this state is to open the goods and sort them for import haulage.

7. Import Haulage

   The final stage of the process. After the goods are confirmed and sorted, they’ll be transported inland by train or truck to your desired destination.

Top 5 Largest Ocean Freight Companies

Considering the fact that ocean freight is used worldwide, there are many ocean freight companies you can choose from. With that in mind, we’ve gathered a list of the top five largest and most popular ocean freight companies:

1. Mediterranean Shipping Company (MSC)

   TEU Capacity: 4.29 million Number of Ships: 645 Only becoming the largest ocean freight company as of 2021, MSC is a Swiss international powerhouse that can ship all over the world. In fact, MSC covers at least 250 trade routes that go to 500 international ports. Overall, the company has been growing rapidly, adding over 100 new ships to its fleet in one year, as well as owning the world's two largest container ships (MSC Gülsün and MSC Samar).

2. APM-Maersk

   TEU Capacity: 4.27 million Number of Ships: 738+ APM-Maersk was the largest ocean freight company for over 25 years before 2021. However, the company is still huge, accounting for 17% of the global TEU in 2021 alone. Maersk is based in Denmark but ships internationally across five continents (57 ports and container terminals in 36 countries, to be exact). Currently, the company is also focusing on making its fuel more eco-friendly, as well as discovering new digital technology for its fleets.

3. CMA-CGM

   TEU Capacity: 3.20 million Number of Ships: 568 Another European-based ocean freight company, CMA-CGM, is France’s leading container shipping company. With 568 ships currently operating, CMA-CGM is a global force that covers 257 popular trade routes. These trade routes can reach 420 ports in 160 countries, making it easy to reach this company regardless of where you’re shipping from.

4. China Ocean Shipping Company (COSCO)

   TEU Capacity: 2.93 million Number of Ships: 480 Owned by the Chinese government, COSCO is China’s largest international ocean freight company. The company’s size is the result of a merger between COSCO Group and China Shipping Group, which caused the two companies to form one conglomerate. Overall, COSCO uses 480 large vessels to ship to at least 40 different countries around the world.

5. Hapag-Lloyd

   TEU Capacity: 1.74 million Number of Ships: 250+ Also, a popular European ocean freight company, Hapag-Lloyd, is a German company resulting from a large 1970 merger. Today, the company covers major Latin American, Middle East, trans-Atlantic, and trans-Pacific trade routes. And though this company may not have as many ships or TEU capacity compared to others on this list, it also brings in large profits from its cruise ship segment.

Ocean Freight Company FAQ

1. What is the largest ocean shipping carrier in the world?

   Mediterranean Shipping Company (MSC) recently overtook APM-Maersk as the largest ocean shipping carrier in the world. While Maersk still technically owns more ships (738 compared to MSC’s 645), MSC’s ships can ultimately carry more cargo. In fact, MSC has a total TEU capacity of approximately 4.29 million, compared to Maersk’s 4.27 million. In this way, MSC just barely comes out on top as the largest company. Overall, the top ten largest ocean freight companies include:

   1. MSC (4.29 million TEU capacity)

   2. APM-Maersk (4.27 million)

   3. CMA-CGM (3.20 million)

   4. COSCO (2.93 million)

   5. Hapag-Lloyd (1.74 million)

   6. ONE (1.53 million)

   7. Evergreen Line (1.48 million)

   8. Hyundai Merchant Marine (819,790)

   9. Yang Ming Marine Transport (662,047)

   10. ZIM (419,064)

2. Is ocean freight cheaper than air freight?

   Yes, ocean freight is considerably cheaper than air freight. Affordability is one of the biggest advantages of using ocean freight. Ocean freight services cost an average of only 50 cents per kg, while air freight cost anywhere from $4-$6 per kg, depending on the speed of service. Overall, that means freight can be up to 12X more expensive than ocean freight. However, do keep in mind that ocean freight will become more cost-effective as the quantity or weight of goods increases. Items shipped in bulk will be far more cost-effective than small items, which can be shipped on air freight without too many sacrifices.

3. What does TEU stand for?

   TEU stands for Twenty Equipment Unit. In other words, each TEU represents a 20-foot container, and two TEUs represent a 40-foot container. Therefore, if a ship can hold 20,000 TEUs, that means 1,000 20-foot containers or 500 40-foot containers.

Final Thoughts

Ocean freight is a vital piece of the world supply chain puzzle. Luckily, if you have goods you need to be shipped, there are several major companies around the world you can take advantage of. With ocean freight, it’s all about shipping goods in bulk, with the goal of getting them to their destination for the most cost-effective price. Therefore, if you have a large number of goods you need to be shipped, especially internationally, ocean freight might be the perfect option. Ultimately, it’s up to you to decide which company is right for you. But, if you do your research and know all about the agreements and stages that will follow, you’ll be ready for a smooth and affordable shipping process.