Current currency trends have been favoring product exports from the US to international destinations. Many US based shippers are seeing their goods becoming more affordable to foreign buyers and are looking to export more goods overseas.
While their exports may be increasing, it is not necessarily enough to fill an entire shipping container, making it most financially responsible for the shipments to be shipped on a freight consolidation basis.
What Constitutes an Air or Ocean Consolidation?
A consolidated shipment is a pool of shipments that are less than a container load from various shippers that are destined for the same port or airport overseas.
Shippers deliver their goods to a warehouse that is geographically convenient or their forwarder may offer pick-up.The freight is always weighed and overall dimensions taken for accuracy of the MAWB (master airwaybill), Bill of lading, and HAWB (house airwaybill).
The main advantage to a consolidated shipment is pricing is lower than shipping outside it by itself at full IATA value (for air freight).
For ocean freight shipped with less than a container load, the service applies for shipments that average less than 15 cubic meters (1 CBM = 35.3147 CFT.) This is not an absolute volume breakpoint as it depends on the price of the full container load versus the rate per CBM when shipping on a consolidation basis.
Your international freight forwarder can help you with the breaking point.
At ETC International Freight Systems our air and ocean consolidation services have a minimum of one weekly departure from any inland US pick-up location via a hub. All shipments consolidated have a last receiving of every Thursday afternoon to depart on the late Friday or week-end consolidations.
Freight Terms & Breakbulk Fees
It is worth noting that when your shipment is consolidated, the receiving agent overseas will need to break the bulk of the shipments and segregate each shipment readying it for the foreign customs clearance.
The fees associated with the overseas breakbulk (terminal and transfer) fees are generally paid by the consignee, clearing and receiving the shipment.
However, it depends on your freight terms that you agreed to use for your shipment and acknowledged by the consignee prior to the shipping. Should the US based shipper sell to the consignee door (DDP or DDU), the responsibility of paying the breakbulk fees would rest with the shipper.
It is important to know your incoterms (freight terms)! If you’re unsure you’re trusted freight forwarder will be able to help.
Incoterms, short for international commercial terms, are the international rules that govern the handling of your shipments, determining who carries the responsibility for a shipment and when it is transferred from seller to buyer. It is important for both the seller and the buyer to have a firm understanding of these terms because they will have a direct impact on your costs and risks.
Two of the most popular Incoterms in both domestic and international shipping are Ex Works/Ex-Factory (EXW) and Free on Board (FOB). While both terms may seem similar, the delegation of obligations and responsibilities are very different.
To illustrate the above, take a look at this existing shipment scenario that took place recently.
Air consolidation service:
Air Export to SGN Via Qatar Airlines
Total Volume: 7,953 kilos
Origin: Tucson, AZ 85756 (Dedicated Truck)
Destination: Tan Son Nhat International Airport (SGN)
Piece count: 3
Crate 1: 195″L x 76″W x 99″H. Weight: 6500 lbs.
Crate 2: 169″L x 69″W x 27″H. Weight: 3200 lbs.
Crate 3: 147″L x 69″W x 57″H. Weight: 4300 lbs.
Total Weight: 14,000lbs
Shipper Status: Known Shipper (for unknown shippers with regular shipments ask your forwarder to help you become a known shipper)
Freight was placed into custom crates built by the supplier. Upon delivery to the airline they accepted 2 of the 3 crates, the 3rd crate was rejected due to poor quality of the crate. The supplier used nails to attach the top, bottom, and side panels to each other causing them to fall apart during transit. The crate would not have made it to destination in one piece.
As soon as we were notified by the airline that the crate would not be acceptable to ship, we had our driver take the rejected crate over to our crating facility.
We unloaded all of the contents from the crate and rebuilt it on the spot adding strong panels, using screws instead of nails, and adding feet to the bottom to allow the airline to get under the crate using their forklift. This all took a total of 3 hours and our trucker was able to get the crate delivered back to the airline before the 5pm cutoff that day.
Other shipments were part of the one described above and each shipment had its own HAWB reflecting the exact individual shipment and ultimate consignee information. The entirety of the shipments was under one MAWB consigned to our agent overseas.
ETC International Freight System has a dens consolidation that gave us the upper hand to negotiate a spot rate with the airlines, which benefited the shippers. Each shipper was notified with a pre-advice email of the flight details and ETD / ETA so were the consignees.
Whether shipping air or ocean freight, consult with your international freight forwarder and explore the consolidation services. At ETC International Freight System, we remain available to share our knowledge and make your shipping experience a breeze.
If you’d like to learn more about air or ocean freight consolidation click the link below to sign up for our FREE webinar.