In a traumatic year that has seen many businesses crumble, one industry is thriving. Ocean shipping has gone from strength to strength in 2020 and looks to do just as well in 2021.
So what do you need to know about ocean shipping? And how might it help your business?
Read on to find out everything you need to know about maritime transport, including how the COVID-19 pandemic has affected it.
How Does Freight Shipping Work?
First, let’s cover the basics of how the freight shipping industry operates. When businesses are looking to transport goods via freight shipping, they will need to obtain the services of a freight forwarder. It is not possible for individual businesses to operate directly with the shipping company.
The freight forwarder acts as the point of contact and logistics supervisor. They provide businesses with a quote for the cost of shipping their cargo. Freight forwarders can also provide transport services on either end of the maritime shipping.
There are two main types of containers for cargo shipping. These are full container load shipping and less-than container load shipping. Both options entail a fully enclosed container, although open-top containers are also available. The space within full container loads is for the exclusive use of the party who pays for it. Less-than container loads involve sharing the container space with other businesses.
Businesses needing to arrange ocean shipping can select from different sizes of full containers. Their transport agent can assist with choosing which freight options are best for each shipment.
What Are the Costs Involved With Ocean Shipping?
Several different factors determine the cost of freight shipping. These include the distance the goods need to be shipped and the weight and size of the goods. Also, whether you choose full or less-than-container shipping impacts the cost.
Full container load shipping will be the more economic option for larger loads. A standard calculation stipulates that if the owner of the goods can fill the container to 75% or more, this is the less expensive option. Greater safety is also associated with full container shipping.
If the cargo to be shipped fills less than 75% of the container, less-than-container shipping is the more cost-effective option. Furthermore, less-than-container shipping can sometimes result in faster shipping times.
There are also flat fees that are charged on top of the specific cost of the cargo. The service provided by the freight forwarder, customs fees, docking fees, and security expenses also apply. Because these are flat rates, there is less of an overhead associated with ocean shipping with larger loads of goods.
What Are the Benefits of Maritime Transport?
There are many reasons why freight shipping continues to be an indispensable means of global trade and a worthwhile option for businesses all over the world. Here, we’ll look a little bit deeper at some of the key benefits of maritime transport.
The key difference between ocean shipping and air shipping is the cost. Airfreight is undoubtedly a quicker mode of transport. But, unless your cargo has an urgent shipping deadline, overseas shipping will likely be the more economic option.
A general rule of thumb to follow is that for goods weighing more than 200kg, maritime transport is cheaper than air transport. This is because maritime transport costs operate with a sliding scale of pricing. Whereas, air transport has a flat cost per kilogram pricing system.
A further benefit of maritime transport is the secure shipping it guarantees. Some goods such as corrosive or flammable materials and explosives cannot be transported by airplane due to the high altitude. In these circumstances, ocean shipping can provide a valuable and safe alternative and also with ITP Packaging.
How Has COVID-19 Affected Ocean Shipping?
2020 and its accompanying difficulties have certainly not spared the maritime transport industry. Yet, cargo shipping has shown a resilience that has allowed it to prosper. Many companies will close out the year with profits, and many more still have been able to break even.
The shipping industry has perhaps fared better than air transport. This is because cargo is typically transported alongside passengers on commercial flights. Almost all commercial flights were canceled to and from the major transport hubs throughout the year. Thus, air transportation options were severely curtailed.
Meanwhile, the low density and volume of people on freight ships have worked in its favor. Alongside continuous online spending, while nations were in lockdown, these factors have allowed ocean shipping to continue.
There have also been several repercussions of the coronavirus pandemic for the shipping industry. Shipping times have slowed for some routes. What’s more, the availability of crews has decreased due to lockdown and quarantine policies worldwide.
What Is the Future of Overseas Shipping?
There are many positive changes for overseas shipping on the horizon. Offering more sustainable shipping is a key hope for the future of overseas shipping.
This, in part, consists of using renewable means of energy to cut carbon emissions. For example, wind energy could be harnessed to power cargo ships.
Growing digitization is another realm in which cargo shipping is expected to change. Logistics shipping staff are required to work from home more and more often. Thus, it is likely that their jobs will be moved online to cause as little disruption to shipping routes as possible. This trend will likely lead to smaller costs to ship goods by sea.
That’s Ocean Shipping in a Nutshell
We’ve now covered how ocean shipping works, and how the COVID-19 pandemic has affected it. It’s clear that there is more than meets the eye when it comes to maritime transport. It has proven to be an invaluable method of transport for many industries in 2020.
If you found this article helpful, make sure you check out our other business-related posts!