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Knowledge of International Shipping Terms is Valuable for Procurement from China

A Chinese shipping agent can provide you with valuable insights and knowledge about the Chinese market. Knowledge of international shipping is crucial to navigate local regulations, customs procedures, and shipping routes.

if you have experience and knowledge of the Chinese market and logistics management, you may be able to handle shipping on your own.

Knowledge of international shipping from China can be a valuable asset for businesses that rely on importing or exporting goods.

It can help them navigate the complex logistics and regulations involved in international shipping and reduce the risk of costly mistakes and delays.

Shipping terms to get familiar with

Incoterms

Incoterms (short for International Commercial Terms) are a set of standardized rules and terms that are used in international trade to define the responsibilities and obligations of importers and exporters involved in the shipping and delivery of merchandises.

Here is a synopsis of the 11 Incoterms:

  1. EXW (Ex Works)
  2. FAS (Free Alongside Ship)
  3. FCA (Free Carrier)
  4. CFR (Cost and Freight)
  5. FOB (Free on Board)
  6. CPT (Carriage Paid To)
  7. DDP (Delivered Duty Paid)
  8. CIF (Cost, Insurance, Freight)
  9. CIP (Carriage and Insurance Paid To)
  10. DPU (Delivered Place Unloaded)
  11. DAP (Delivered Place)

Each Incoterm has its own specific rules regarding delivery and transfer of risk, and it is important for buyers and sellers to understand these rules in order to avoid misunderstandings or disputes during the international trade process.

What is FCL and LCL Shipping?

In FCL [Full Container Load]the shipper is responsible for the entire cost of the container, regardless of whether it is filled to capacity or not.

In LCL [Less than Container Load]the shipper pays only for the space their goods occupy in the container, and the remaining space is filled with goods from other shippers.

Generally, FCL shipping is more cost-effective for shippers who have a large volume of goods to transport, while LCL shipping is better suited for smaller shipments.

Shipping container volumes options

Here are some most common shipping container sizes and their volumes:

  1. 20-foot container: Volume – 1,170 cubic feet.
  2. 40-foot container: Volume – 2,350 cubic feet.
  3. 40-foot high-cube container: Volume – 2,690 cubic feet.
  4. 45-foot container: Volume – 3,040 cubic feet.

There are other specialized containers available having different sizes and volumes, such as refrigerated containers and open-top containers.

Freight insurance

Freight insurance, also known as cargo insurance provides financial protection against loss or damage to goods while they are being transported from one location to another.

Freight insurance can be purchased by either the shipper or the carrier, depending on the terms of the agreement between them.

Shipping/lead time – in brief

Shipping/Lead time refers to the period of time it takes for a product to be delivered or shipped to a customer after an order has been placed.

It includes the time required for processing the order, packing the item, and arranging for its transportation or delivery.

The length of the shipping/lead time can vary so you need to take into account the shipping/lead time when placing orders to ensure timely delivery.

Bill of lading

A bill of lading is a legal document that serves as a contract between a shipper of goods and the carrier that will transport them.

It outlines the terms of the agreement, including the type and quantity of goods being shipped, the place of origin and destination, the name of the carrier, and the agreed-upon terms of payment.

Bill of lading provides evidence of ownership and allows for the transfer of ownership during the course of the shipment.

The shipping terms may seem complicated in the start but soon you will gain familiarity, so don’t get intimidated!

Take some time in getting to know the terms and become knowledgeable in international shipping from China.

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