Sea freight
Freight brokers, ship agents and agreements with stevedoring companies and terminals in key countries worldwide.
Get a quoteWhat sea container freight is
Sea freight means carrying goods by ship between ports and, in the container version, also moving the container from the shipper’s warehouse to the port and from the port to the consignee. Most industrial and consumer goods in world trade travel in standard sea containers on liner vessels that sail to a schedule between ports.
Sea is the most economical choice for large volumes and long distances, especially between continents. The price of the low rate is time: a voyage takes weeks, and at each end come port operations, customs clearance and delivery by road or rail. Sea freight is therefore planned ahead, taking into account not only the line’s rate but local charges, free time on the container and document deadlines.
Besides containers, the sea carries dry and liquid bulk, general cargo, and heavy or oversized equipment on specialized vessels. ETIKO organizes sea freight as part of a door-to-door chain: it books space with the line or a forwarder, coordinates container stuffing, documents, port operations and delivery to the consignee.
FCL and LCL: full container and groupage
There are two main ways to ship goods in a container.
| Criterion | FCL, full container | LCL, groupage |
|---|---|---|
| What the shipper gets | The whole container for its cargo | Part of a container shared with other shippers |
| How the price is set | Per container, however full it is | Per cubic meter or weight, whichever is greater |
| Where it is stuffed | At the shipper’s warehouse or a terminal | At a container freight station (CFS) in the port of loading |
| Transit time | Depends on the voyage and port operations | Plus consolidation and deconsolidation at warehouses |
| Risks | Less handling, the container is sealed at once | More handling and exposure to other shippers’ cargo at customs |
The point where FCL becomes cheaper depends on the route and rates, so both options are compared for each shipment. Groupage suits regular small deliveries, while a full container is better for large, valuable or fragile lots that should not be rehandled at warehouses.
Sea container types
External dimensions and ratings of series 1 freight containers are set by ISO 668. Internal dimensions, tare and payload of a particular container are given by the manufacturer and on the CSC safety approval plate on the doors, so for heavy or dense cargo they are confirmed with the line.
| Type | External dimensions under ISO 668 | Use |
|---|---|---|
| 20 ft standard | Length 6058 mm, width 2438 mm, height 2591 mm (8 ft 6 in) | Heavy, dense cargo: steel, tiles, equipment |
| 40 ft standard | Length 12,192 mm, width 2438 mm, height 2591 mm | General cargo of medium density |
| 40 ft high cube | Length 12,192 mm, width 2438 mm, height 9 ft 6 in | Light, bulky cargo |
| Reefer | As standard 20 and 40 ft; less usable volume because of insulation and the unit | Perishable and temperature-controlled cargo, needs power supply |
| Open top | As standard; removable tarpaulin instead of a roof | Tall cargo, crane loading from above |
| Flat rack | Floor with end walls, no roof or side walls | Machinery, equipment, cargo wider or taller than a container |
| Tank container | A tank inside a standard-size frame | Liquid cargo, including dangerous goods |
Cargo that overhangs an open top or flat rack is carried only by separate agreement with the line, which affects the rate.
Incoterms 2020 for sea transport
The ICC’s Incoterms 2020 rules define which of seller and buyer arranges and pays for carriage, where risk passes to the buyer and who clears customs. Four terms are intended for sea and inland waterway transport only.
| Term | Where risk passes to the buyer | Who pays ocean freight |
|---|---|---|
| FAS, Free Alongside Ship | When the goods are placed alongside the ship at the port of shipment | Buyer |
| FOB, Free On Board | When the goods are loaded on board at the port of shipment | Buyer |
| CFR, Cost and Freight | When the goods are loaded on board at the port of shipment | Seller |
| CIF, Cost, Insurance and Freight | When the goods are loaded on board at the port of shipment | Seller, who also insures the cargo at least on Institute Cargo Clauses (C) |
Under CFR and CIF the seller pays freight to the port of destination, yet risk passes to the buyer at the port of shipment. For containers handed over at a terminal well before loading, the ICC recommends FCA, CPT or CIP instead: the seller in practice loses control of the goods when the container is delivered, not on board.
The bill of lading and its types
The bill of lading (B/L) is the key document of sea carriage. It has three functions: it is a receipt showing the carrier has taken the goods, evidence of the contract of carriage, and a document of title, meaning whoever holds the original can take delivery of the goods or transfer the right to them.
- Shipped on board and received for shipment. Banks under a letter of credit usually require an on-board bill.
- Order, straight and bearer. An order bill is transferred by endorsement, a straight bill is issued to a named party.
- Clean and claused. Remarks on the condition of the goods or packaging can make a bill unacceptable to a bank.
- Master (MBL) and house (HBL). For groupage the line issues an MBL to the forwarder, who issues an HBL to each shipper.
- Originals, telex release and sea waybill. Release against originals can be replaced by a telex release (surrender) or a sea waybill, which is not a document of title and speeds up delivery.
An error in the consignee’s name, the description of goods or the number of packages costs amendment fees and sometimes delays release, so the draft is checked against the contract and the letter of credit before issue.
VGM, IMDG and correct packing
Under SOLAS regulation VI/2 (amendments MSC.380(94)), since 1 July 2016 a packed container is not loaded on a ship without a verified gross mass (VGM). The shipper obtains it by one of two methods: weighing the sealed container on calibrated equipment, or weighing all the cargo with packaging, pallets and securing material and adding the container’s tare. The VGM is submitted to the line before its deadline, otherwise the container is not loaded.
Dangerous goods travel under the International Maritime Dangerous Goods (IMDG) Code, mandatory under SOLAS chapter VII. It requires classification, packaging and marking to the Code, a dangerous goods declaration, a container packing certificate and placards on the container. The line separately approves acceptance and stowage of such cargo with segregation in mind.
Packing and securing inside the container are covered by the IMO/ILO/UNECE Code of Practice for Packing of Cargo Transport Units (CTU Code, 2014). Cargo must be spread over the floor, secured against shifting as the ship rolls and kept within the permitted mass. Poor securing is one of the most common causes of damage at sea.
Order of work
- Request: goods, volume, weight, ports or addresses, preferred date, Incoterms delivery terms.
- Signing a mutual non-disclosure agreement (NDA) before work starts.
- Choosing FCL or LCL, the container type, the line, the route and the port.
- Agreeing the rate, container free time and local charges.
- Booking, collecting the empty container, delivering it to the shipper’s warehouse.
- Stuffing and securing, sealing, establishing the VGM.
- Export customs clearance and gate-in at the terminal before the cut-off.
- Checking the draft bill of lading, loading on the vessel, issuing the bill.
- Tracking the voyage and transshipments, reporting schedule changes.
- Arrival, import customs clearance, collection from the port and return of the empty container.
Many routes involve transshipment: a feeder vessel carries the container to a large hub port, where it is moved to an ocean vessel. Transshipment opens up more destinations but adds the risk of a missed connection and a wait for the next sailing, so the schedule is followed port by port.
Cost, transit time, demurrage and detention
The price of sea freight is made up of the line’s ocean freight, fuel and seasonal surcharges, terminal handling charges (THC) at the ports of loading and discharge, documentation, transport to and from the port, customs clearance and any inspections. Transit time depends on the line’s schedule, voyage length, transshipments, port congestion and the speed of customs clearance.
Three time-based charges are worth understanding separately:
- Demurrage is the line’s charge for using the container inside the port beyond the free time.
- Detention is the charge for keeping the container outside the port beyond the free time until it is returned empty.
- Storage is the terminal’s charge for the container standing on its premises.
Free days and rates are set by the line or terminal and usually rise day by day. The most common causes are documents not ready on arrival, customs inspection and a consignee warehouse that is not ready. Other typical risks are a wrong VGM, an inaccurate description of dangerous goods, weak securing inside the container, errors in the bill of lading and a missed cut-off that rolls the container to the next vessel.
What it includes
- Full container (FCL) from the shipper’s warehouse to the consignee’s.
- Groupage (LCL) through consolidation warehouses in ports.
- Special containers: reefer, open top, flat rack, tank containers.
- Booking and terms: line, route, container free time, local charges.
- Container stuffing: coordination, securing checks, establishing the VGM.
- Documents: checking the draft bill of lading, customs set, IMDG documents.
- Customs clearance for export and import.
- Port operations and transport to and from the port by road or rail.
- Tracking of the voyage, transshipments and free time.
Cargo
- General and palletized cargo in standard containers.
- Light, bulky goods in high cube containers.
- Industrial equipment and machinery on flat racks and in open tops.
- Perishable and temperature-controlled cargo in reefers.
- Liquid cargo in tank containers.
- Dangerous goods under the IMDG Code.
- Oversized and project cargo on specialized vessels.
Requirements
International rules
- SOLAS regulation VI/2: since 1 July 2016 a packed container is not loaded on a ship without a verified gross mass (VGM).
- The IMDG Code is mandatory for dangerous goods under SOLAS chapter VII.
- The CTU Code (IMO/ILO/UNECE, 2014) on packing and securing cargo in containers.
- The CSC Convention on safe containers: the CSC Safety Approval Plate shows the maximum operating gross mass and the allowable stacking load.
- Incoterms 2020 (ICC) divide costs, risks and duties between seller and buyer.
- The line’s bill of lading terms and the applicable maritime law define carrier liability.
What the customer should prepare
- Description and HS code of the goods, number of packages, gross weight, volume, dimensions of oversized pieces.
- Port or address of loading and destination, preferred date, Incoterms term.
- Shipper, consignee and notify party details for the bill of lading, and the letter of credit terms if any.
- For dangerous goods: UN number, class, safety data sheet (SDS).
- For reefers: required temperature, ventilation, humidity.
Documents
Transport documents
- Bill of lading (B/L) issued by the line or a forwarder, or a sea waybill.
- Booking confirmation from the line with the booking number and cut-off times.
- VGM declaration signed by the shipper.
Commercial and customs documents
- Commercial invoice and packing list.
- Export and import customs declarations.
- Proof of origin if the consignee claims a preferential duty rate.
- Certificates for specific goods: phytosanitary, veterinary, conformity, fumigation of wooden packaging.
For dangerous goods
- Dangerous goods declaration under the IMDG Code.
- Container packing certificate.
- Safety data sheet (SDS).
Industries
Related services
Frequently asked questions
Which is cheaper, FCL or LCL?
FCL is paid per container, LCL per cubic meter or weight. Groupage is usually cheaper for small shipments, and from a certain volume a dedicated container becomes better value. The break-even point depends on the route and rates, so both options are compared for each shipment.
What are demurrage and detention?
Demurrage is the line’s charge for using a container inside the port beyond the free time. Detention is the charge for keeping it outside the port until it is returned empty. Free days and rates are set by the line, so they are agreed before booking.
What is VGM and who provides it?
VGM is the verified gross mass of a packed container, required by SOLAS since 1 July 2016. The shipper provides it by weighing the container or all the cargo with packaging and adding the tare. Without a VGM the container is not loaded on the ship.
How does a bill of lading differ from a sea waybill?
A bill of lading is a document of title: the goods are released to whoever presents the original, and the right to them can be transferred. A sea waybill only evidences the contract and receipt, and the goods are released to the named consignee. A waybill speeds up release but does not suit cases where control of the goods until payment is needed.
Which Incoterms rule should I use for container shipping?
FOB, CFR and CIF are sea terms, and under them risk passes on board the ship. For containers handed over at a terminal well before loading, the ICC recommends FCA, CPT or CIP. The choice depends on which party arranges freight and insurance.
How long does sea freight take?
It depends on the line’s schedule, the distance between ports, the number of transshipments, port congestion and customs clearance at both ends. Delivery to the port, gate-in before the cut-off and collection at destination add to the time at sea. The lead time is given once a specific vessel is booked.
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