Everything You Need to Know About Ocean Shipping
Did you know that 90% of the world's trade is done by sea? Trading by sea has been ongoing for a long while, and centuries later, it still hasn't stopped. Ocean shipping, the lifeblood of global commerce, connects countries, continents and cities.
As someone interested in shipping items through the sea, you might ask yourself, what do I need to know about ocean shipping? This article will teach you everything you need to know about the subject. But first, we need to answer the question, "What is ocean shipping?"
What is Ocean Shipping?
Ocean shipping, also known as maritime or sea freight, is a method of transportation whereby cargo is transported by sea.
Ocean shipping has a network of interconnected routes that carry everything. From massive tankers transporting oil across continents to specialised vessels carrying cars or refrigerated goods, ocean shipping bridges continents and fuels international commerce.
While not every corner of the globe is directly accessible by ship, ocean routes connect major ports and trade hubs.
Benefits of Ocean Shipping
Some of the benefits of ocean shipping include:
Cost-Effectiveness
Ocean shipping delivers incredible value. It costs 4-6 times less than airfreight for long distances. This cost advantage makes it the go-to choice for businesses and individuals sending large volumes of goods across continents.
Efficiency for Bulk
Need to move tons of raw materials, grains, or industrial machinery? Ocean shipping excels at handling massive cargo volumes. This maximises efficiency and minimises the cost associated with each cargo trip. If you're shipping smaller goods, you can benefit by sharing container space with others.
Sustainable Choice
Ocean shipping boasts a lower carbon footprint compared to airfreight. Additionally, the industry is actively pursuing cleaner fuel technologies to reduce environmental impact.
Handling Hazardous Goods
Properly packaged hazardous materials, from chemicals to batteries, can be safely transported by sea. Strict regulations and dedicated compartments ensure responsible handling and minimal risk, making ocean shipping a viable option for specialised cargo.
Related: The Benefits of Air Freight for International Shipping
Challenges of ocean shipping
Ocean shipping comes with its peculiar challenges, some of which are:
Weather and Natural Disasters
Ocean shipping is open to intense and adverse weather conditions and natural disasters. Things like hurricanes and typhoons can cause damage to the cargo and delay arrival.
Slow Transit Time
Ocean shipping is very slow compared to other shipping options. It takes considerable time for your shipment to reach your destination. This time is impacted by weather, congestion at the port, and inefficient loading and unloading processes. If you are operating with time constraints, it is not advisable to use this method.
Container Loss and Damage
Adverse weather conditions, improper cargo handling, and accidents can cause your container to be lost or damaged at sea. This leads to financial losses, which might affect your bottom line.
Lack of Visibility and Communication
Lack of real-time visibility and proper communication leads to challenges in tracking cargo. This makes it hard to give accurate information on the ship's location. This also impacts the transmission of information in cases where unexpected events happen.
Types of Ocean Shipping
Ocean shipping involves various vessels and services to transport goods across the seas. Here are some common types of ocean shipping:
Container Shipping
Container shipping is a method of transporting goods in standard containers from one location to another using ships and other modes of transportation like trucks and trains. Container ships can carry thousands of containers at once, and they come in different sizes and shapes, making it easy to load and unload them from ships. The most common container sizes are 20 feet and 40 feet long, but smaller and larger containers are also available.
Full Container Load (FCL)
FCL is a type of container shipping where one shipper uses an entire container. This type of shipping is suitable for large shipments that can fill a whole container.
Less than Container Load (LCL)
On the other hand, LCL is container shipping involving more than one shipper. In this context, multiple shippers share the space in a single container. This is suitable for smaller shipments that do not require an entire container.
Advantages
Container shipping has some benefits, which include:
Increased Efficiency
The use of containers means that goods can quickly be loaded and unloaded from ships without the need for additional packaging or handling. This helps to reduce the time spent in the ports, resulting in the fast transportation of goods.
Cost-effective
Container shipping is a cost-effective mode of transportation. Using containers reduces the cost of packaging and handling, and the ability to transport large volumes of goods at once has reduced the price per unit. It also allows businesses that might have smaller shipments to share container spaces with others, thereby reducing their transportation costs.
Security
Using containers with standard locks protects goods from theft and damage during transportation.
Flexibility
Container shipping is a flexible mode of transportation. Containers can easily be transferred from ships to trucks or trains, making it possible to transport goods to remote locations.
Challenges
Alongside its benefits, the challenges of container shipping include:
High Initial Costs
One of the biggest disadvantages of container shipping is the high initial cost. The containers can be expensive, and the cost of purchasing and transporting them can add up quickly. The cost of equipment needed for loading and unloading these containers is also capital-intensive.
Limited Flexibility
Containers can only be loaded and unloaded at specific ports, limiting the shipping options available to businesses. Additionally, the size and weight of containers can make them difficult to manoeuvre in certain situations, such as when navigating narrow streets or tight corners.
Security Risks
Container shipping can also pose security risks. Because containers can be easily sealed and transported long distances, they can be used to smuggle illegal goods or even people, creating security concerns for both shipping companies and governments.
Space Constraints
Containers take up a lot of space, which can be an issue if the ports need more space to accommodate these containers. The size of the containers also makes it impossible for them to be easily reshuffled or restacked. Hence, the ones offloaded first must stay at the top.
Bulk Shipping
Bulk shipping, also known as bulk cargo, is the transportation of large quantities of unpackaged goods, such as coal, grain, or ore. This type of cargo is typically loaded and unloaded using large cranes and specialised equipment, which can be found in ports worldwide.
Advantages
Cost-effectiveness
Shipping companies can reduce their per-unit transportation costs by transporting large cargo volumes at once. Using the bulk shipping option also requires fewer containers and fewer packaging materials.
Efficient Shipping
Since the goods are transported in large quantities, it reduces the need for frequent trips. The carrying capacity of bulk ships ranges from 3,000 to 300,000 tonnes, making it easier to store more items than a truck.
Challenges
Limited flexibility
Bulk shipping is generally used for large quantities of a single type of goods, so there is limited flexibility in the goods transported. This can be a disadvantage for businesses that need to transport various products.
High capital costs
Bulk carriers are expensive to build and operate, so the cost of shipping goods in bulk can be high.
Specialised Equipment
Specialised equipment and infrastructure are needed to handle bulk cargo. If specific ports and terminals still need this expensive equipment, this can be an issue.
Security
Bulk cargo can be challenging to secure and transport safely, as it is often heavy and can shift during transport.
Roll-on/Roll-off (RoRo}
Roll-on/Roll-off, commonly known as RoRo, is a shipping method to transport vehicles, machinery, and other wheeled cargo. This method involves driving or pulling the cargo onto a specialised vessel. This vessel typically has a large ramp for easy loading and unloading. When loaded onto the vessel, the cargo is secured using straps or chains and transported to its destination.
Advantages
Efficient
RoRo transport is an efficient way to move large quantities of cargo, vehicles, and equipment. The loading and unloading process is quick and easy, and the cargo can be driven or rolled onto the ship or vessel without cranes or other heavy equipment.
Versatile
RoRo transport is highly versatile and can accommodate a wide variety of cargo. It can transport anything from cars, trucks, and buses to heavy machinery, construction equipment, and even military vehicles.
Note: if the equipment/ machinery does not have wheels, they must have been secured to wheels to enable easy rolling or driving.
Cost-effective
RoRo transport is often more cost-effective than other transportation methods. It can reduce the need for packaging and handling, saving time and money.
Safe
RoRo transport is generally considered to be a safe mode of transportation. The cargo is secured and protected using straps or chains, reducing the risk of damage or loss. Additionally, RoRo vessels are designed to be stable and seaworthy, which can reduce the risk of accidents or incidents at sea.
Challenges
Limited Cargo Types
Roll-on/Roll-off (RoRo) shipping is limited to certain types of cargo. It is designed for cargo that can be driven onto and off the ship, such as cars, trucks, buses, and heavy equipment. This means it is unsuitable for some types of cargo, such as bulk goods, liquids, or perishable items.
Weather Dependent
RoRo ships are also highly dependent on weather conditions. Rough seas can make loading and unloading cargo difficult or even impossible, resulting in delays and increased costs.
Security Risks
RoRo shipping also carries security risks. Because the cargo is relatively easy to access, it is vulnerable to theft and damage.
Limited Routes
RoRo shipping is limited to specific routes. They require specialised ports and facilities, which may only be available in some locations.
Tanker Shipping
Tanker shipping transports liquid cargo such as crude oil, refined petroleum products, chemicals, and liquefied natural gas (LNG). The demand for tanker shipping is driven by the energy industry, which relies on ocean shipping to move large volumes of oil and gas from producing countries to refining centres and end-users.
The tanker shipping industry comprises two main types of vessels: crude oil tankers and product tankers. Crude oil tankers transport unrefined petroleum products from oil-producing countries to refineries, while product tankers transport refined petroleum products such as gasoline, diesel, and jet fuel to end-users.
Breakbulk Shipping
Breakbulk shipping transports goods too big or heavy to be shipped in standard containers. It involves transporting individual items, such as large machinery, vehicles, or construction equipment, which cannot fit into standard shipping containers. Breakbulk shipping is widely used to transport non-containerized cargo, typically loaded onto pallets, crates, or flat racks and secured onto the ship's deck.
Advantages
Breakbulk shipping is a popular choice for companies that need to move large, heavy, or oddly shaped cargo across long distances. It also provides excellent protection for cargo, as it is loaded and secured onto the ship's deck instead of being packed into a container where it may shift and get damaged during transit.
Challenges
Challenges of break bulk shipping include more extended loading and unloading times, higher costs, and greater risk of damage to cargo. Due to its unique nature, specialised equipment and handling procedures are required to ensure safe and efficient transport. It requires more planning, coordination, and expertise than container shipping.
Liner Vessels
Liner vessels are cargo ships that operate on a fixed schedule and specific routes. These ships are designed to transport large quantities of goods in shipping containers that can easily be transferred from one mode of transport to another. The containers are loaded and unloaded from the vessel using specialised equipment, such as cranes, allowing quick and efficient cargo handling.
Advantages
Reliable schedules
Liner vessels generally operate on a fixed schedule, which can make them more predictable than other types of shipping. This is important for businesses planning their supply.
Flexibility
Liner vessels often offer a variety of routes and ports of call, making them a good choice for businesses that need to ship to multiple destinations. They can also transport dry goods, refrigerated goods and hazardous materials.
Improved visibility
Liner vessels often provide real-time tracking and monitoring of cargo, which can help businesses manage their supply chains better and respond to any issues that arise during transport.
Challenges
Cost
Liner vessels are more expensive than bulk carriers due to their specialised design. The cost of their construction and maintenance is higher, which results in higher freight rates for shippers.
Inflexibility
Liner vessels operate on fixed schedules and routes, which can make them less flexible than other types of ships. This can be a disadvantage for shippers requiring more flexibility in delivery times and locations.
Container handling
Liner vessels require specialised equipment and infrastructure for loading and unloading containers, which can be a disadvantage in ports that lack such facilities. This can result in delays and added costs for shippers.
How Does Ocean Shipping Work?
The ocean shipping process is a complex process that has many stages, which include:
Booking and Documentation
The process starts with the shipper/ exporter booking a space on a cargo ship. Booking a ship helps the shipping company to allocate your shipment for transportation. After this, all the required documents will be submitted to the shipping company. Some of these documents are bills of lading, commercial invoices, packing lists, etc.
Cargo Consolidation
If a shipment is not large enough to fill a container, multiple shipments will be consolidated onto the ship. This helps maximise the use of container space and streamline the loading process.
Containerisation
Goods are packed into standard shipping containers, such as 20-foot or 40-foot containers. This process allows for efficient loading and unloading of containers at ports. It also helps to facilitate easy intermodal transportation.
Transport to the Port
The packed containers are transported to the port of departure using trucks or trains. At the port, containers are stacked in the yard, awaiting loading onto the vessel.
Loading
Containers are loaded onto the cargo ship in a specific way to ensure stability and an equal distribution of weight. This will ensure that one part of the ship does not bear more weight. Specialised equipment, such as cranes and forklifts, manages this loading process. The ship's manifest is updated to reflect the loaded cargo.
Voyage
It's time to sail across the sea like Moanna's ancestors. The ship embarks on the journey, passing through the chosen route. The duration of this voyage varies between ships, mostly depending on the destination and the route the ship passes.
Unloading
When the ship reaches its destination port, the containers are unloaded. Then, they are transported to the yard for customs inspection.
Customs Clearance
Customs authorities inspect the cargo and verify that all documentation is in order. They also assess customs duties and taxes. If satisfactory, clearance is granted for the cargo to enter the destination country.
Transport to Final Destination
The cleared containers are transported to the final destination using trains or trucks. If a different port services the destination, the containers will be transhipped.
Delivery and Distribution
The shipment is finally delivered to the consignee (importer). Distribution involves additional transportation, warehousing, and logistics services to reach the final destination.
Return of Empty Containers
Empty containers are returned to the ports or designated destinations to prepare for the next shipment.
Ocean Shipping Rates
Ocean shipping rates are the costs associated with transporting goods by sea. These rates are different based on different factors like:
Type of Cargo:
Different types of cargo require different handling and storage, which affects the rate. Larger and heavier shipments generally cost more than smaller ones. And if the cargo contains hazardous materials, it could mean extra fees.
Fuel Costs:
Fuel is a major operating expense for shipping lines. Fluctuations in global oil prices directly impact bunker adjustment factor (BAF) surcharges, which are passed on to shippers.
Supply and Demand:
Increased demand for cargo space, especially during peak seasons, drives rates up. When the cargo supply is high, and there aren’t enough goods to go around, the rate will drop.
Distance and Route:
Longer distances and routes with multiple port calls naturally cost more due to increased fuel consumption and transit time. A route that is likely to attract tolls and is less secure also means higher fees.
Currency Fluctuations:
Ocean shipping rates are quoted in U.S. dollars. If a shipper's currency weakens against the dollar, their shipping costs will increase. A typical example is the devaluation of the naira against the dollar.
Port Congestion and Efficiency:
Delays at ports due to congestion, labour disputes, or customs issues can increase costs for shipping lines, which are passed on to shippers.
Seasonality:
Certain times of the year, like pre-holiday periods, experience increased demand, leading to higher rates.
Market Competition:
The level of competition among shipping lines on a given route can influence rates. More competition can lead to lower prices.
Key Players in Ocean Shipping
Some key players involved in the ocean shipping industry are:
Shippers
These are companies or people who ship items to others. They can either be the sellers or manufacturers of the shipment being transported. The shippers are responsible for booking the ship and preparing the documentation.
Consignees
Consignees are the receivers of the shipped goods. They are often the buyers or importers.
Freight Forwarders
Freight forwarders are the middlemen between shippers and carriers. They assist in coordinating the transportation of goods, handling documentation, and ensuring that the cargo moves to the final destination.
Carriers/ Shipping Lines
Carriers are the companies responsible for transporting goods by sea. They offer shipping services and manage the ship schedules.
Customs Authority
Customs authorities are government agencies responsible for enforcing customs laws and regulations. They are responsible for clearing goods at the departure and destination ports. They also ensure that shipments comply with import and export regulations, collect duties and taxes, and prevent the illegal movement of goods.
Port Operators
Port operators manage and operate seaports, which are key places in ocean shipping. They are responsible for the loading and unloading of cargo, maintaining port facilities, and providing services such as storage, warehousing, and logistics.
Customs Brokerage Firms:
Customs brokerage firms and their brokers specialize in clearing goods through customs. They can assist you with customs clearance, ensure compliance with all relevant regulations, prepare and submit documentation, and facilitate the payment of duties and taxes.
A New Player on the Ocean Waves: Heroshe
2024 marks a significant milestone for Heroshe: we're launching ocean shipping. This helps us simplify exports and empower Africans to be big players in the global marketplace. With this service, you're no longer restricted by minimum order quantities or costly shipping fees.
Here's why our ocean shipping service makes the difference:
No Minimum Order Quantity
We have no minimum order quantity, and you can ship whatever you want without worrying about filling a container.
Consolidate and Save
You can pool your shipments together, and we'll deliver them. This helps you save costs as everything comes at once instead of being shipped individually. This also makes it possible to share container space with others, slashing the shipping costs.
Competitive Pricing
We believe everyone deserves access to global markets. That's why our rates are fair, transparent, and competitive, even for small shipments.
Tracking Visibility
Who said you couldn't track your shipments on the sea with Heroshe? Our innovative solution to ocean shipping allows you to track your shipment in real time.
Bulk Shipping
Whether heavy-duty or fragile, you can now ship anything of your choice with the Heroshe Ocean shipping service.
Love and Swift Delivery
We prioritise your precious shipment, ensuring fast and reliable deliveries. Our dedicated customer support is also available to you every step of the way.
More than just shipping, we are all about opening doors and improving the lives of individuals and businesses. This we do by opening access to global commerce.
Ready to join the waves? Create an account now to get first-hand information when we launch, and we are ready to voyage across the sea.
