Label #1: Incoterms:
This term is hardly used in our daily life. But it’s used quite extensively in the shipping environment. Incoterms are the International Standard Codes that indicate where cargo shall be shipped from the supplier to the importer.
There are few terms which are used very often.
a) DAP (Delivered At Pace): Which means that the cargo will be shipped from the supplier in China to a specified overseas location. For example: DAP can be used when you’re in Mumbai and are having furniture shipped from a supplier to your doorstep!
b) FOB (Free On Board): Which means transportation from the supplier to the port of export.
Note: Whenever you are getting a shipping quote, always make sure to tell your supplier what incoterm you are using. Else, you might end up paying more than you would pay.
For more clarity on Incoterms:
https://www.youtube.com/watch?v=NEY60B8Ocg4
Label #2: FCL and LCL Shipping:
Both these terms have to do with the costs of shipping and the size of the container used.
- FCL = Full Container Load
- LCL = Less (than) Container Load
Typically, if you by volumetric unit and weight unit, shipping FCL is cheaper!
But, the disadvantage is many importers aren’t purchasing enough goods to ship FCL. Air Freight is time saving, but the cost is often too high! In that case, LCL (less than container load) is the ideal solution.
Label #3: Shipping Container Volumes:
When it comes to shipping containers, there are mainly 4 options. They are:
When it comes to shipping containers, there are mainly 4 options. They are:
- FCL 20 feet
- FCL 40 feet
- FCL 40 feet HQ
- FCL 45 feet HQ
Label #4: Freight Insurance:
Insuring what is being shipped is Freight Insurance. If there is any mishap, something goes wrong, freight insurance will cover your losses!
You will find incoterms which specifically indicate who is responsible for insuring the shipment!. For example: CIF (Cost Freight and Insurance) automatically includes the Insurance with the incoterm .
Label #5: Shipping/Lead Time:
Time taken to get from the shipping port to the destination port is Shipping/Lead Time!
The point is, longer the lead time, the earlier you need to place your order. If you need to receive your shipment by June, you will need to place it several months earlier.
Also, very important to know that, lead time doesn’t just include when the cargo is being shipped. It also includes:
- The time your cargo sits in the port before being loaded.
- Administrative delays at both ports
- Weather related delays.
Shipping by sea is unpredictable in many ways. To be on the safer side, you should give yourself a large margin of error when placing the orders.
Label #6: Export Packaging:
What are you supposed to do if your cargo is damaged during the transport? That will lead to lost sales and crash in revenue.
Also, one needs to be extremely careful and crystal clear with the supplier, as there are times when may not adhere to the standards you have been expecting. Suppliers have the habit of using cheap packaging materials, which can lead to breakage.
The Bill of Lading functions as a checklist of sorts. It shows:
- The shipping company
- The exporting company (seller)
- The buyer
- The products being shipped
- The volume of the products
- The incoterm used on the products
When shipping from China, a Bill of Lading is mandatory and always must accompany the shipped goods.
The worst part is when your shipment gets delayed. So, tracking your containers is the best way to check when your shipments are going to arrive.
In order to track your containers you need:
- The shipping line transporting your cargo
- The container number, booking number, or document number

