29.12.2021

FOUR DIFFERENT TYPES OF FREIGHT SHIPPING SERVICES AND THE TECHNOLOGY THEY USE
Freight shipping services and transport can be defined as the process of moving commodities and merchandise goods and cargo. The term shipping originally referred to the carriage by sea but is extended in American English to refer to transport by land or air as well. Freight shipping services are essential to the proper functioning of any business – but more so to the smooth operation of smaller firms. When you are choosing what way is best to move your freight, there are some different transportation options to consider. This article takes a look at several of the most common types of freight transportation, and what the benefits of each type of service are.

THE TYPES OF FREIGHT SHIPPING SERVICES
ROAD (GROUND)
The road is a standard transport method for small or medium-sized goods that are to be carried within one country. Freight is usually transported in large trucks, and they are driven by a professional driver to its location. It is a convenient and quick way to transport freight. Road transportation shipping is not suitable for bulk or odd-shaped sized goods, or for extremely long-distance transportation.

RAIL
Rail is a convenient way to transport larger goods. Reputable rail freight companies will be able to arrange for goods to be transported by a combination of rail and road if required.

SHIP (OCEAN)
Sea freight transportation is an economical option for businesses that want to transport their goods overseas. Sea freight can accommodate all shapes, sizes, and weights of freight. The only downside is that this freight shipping service will take a longer period to transport.

AIR
If you need to transport your freight quickly, then the best way to transport it is by air. Air shipping service will be able to transport your freight to almost any large city in the world. For most cities there are daily cargo flights, so you can transport your goods immediately if it is urgent. As with rail freight, a good freight service company will be able to arrange additional delivery of your freight to and from the airport.

THE TECHNOLOGY
Over the years freight forwarding and shipping services have learned to adopt new technologies. Technology that has been specially made for the freight industry is becoming readily available. The implementation of this technology allows freight firms to meet the increasing demands, this not only improves services and reputation, but it also allows firms to stand out from competitors and achieve success. Below are some of the technologies uses by a freight company.

THE PUSH OF A BUTTON
Many of the processes done in the freight industry can be improved with a push of a button. This technology allows firms to organize and plan shipments with ease, enabling them to control the movement of goods through clear up to date tracking. The client now has the option to learn of their shipments location, condition and expected delivery time.

AUTOMATIC IDENTIFICATION TECHNOLOGY
This improvement allowed operations to run much smoother when transporting goods from one location to another. The adoption of automatic technologies such as handheld scanners allows for efficient daily processes. With the implementation of electronic identification technology andonboardd computer systems when transporting goods, reports and logs can be easily printed off at the end of each day.

So, if your business is on the lookout for freight forwarding and shipping services or international freight providers, then doing your research, getting quotes and vetting all of the freight companies on your shortlist before making your final selection will be worth both your time and effort.

What does FOB mean in shipping?
FOB in FOB shipping service stands for “free on board” or “freight on board” and is a designation that is used to indicate when liability and ownership of goods is transferred from a seller to a buyer.

Free on Board:

Free on board indicates whether the seller or the buyer is liable for goods that are damaged or destroyed during shipping. When used with an identified physical location, the designation determines which party has responsibility for the payment of the freight charges and at what point title for the shipment passes from the seller to the buyer.

In international shipping, for example, “FOB [name of originating port]” means that the seller (consignor) is responsible for transportation of the goods to the port of shipment and the cost of loading. The buyer (consignee) pays the costs of ocean freight, insurance, unloading, and transportation from the arrival port to the final destination. The seller passes the risk to the buyer when the goods are loaded at the originating port.

Freight on Board:

Freight on board is another term that is often used in place of free on board. However, it’s worth noting, this is not an official term.

How is “FOB” used in shipping documents?
The term “FOB” is used in four different ways when it comes to freight shipping. These include:

FOB [place of origin], Freight Collect

FOB [place of origin], Freight Prepaid

FOB [place of destination], Freight Collect

FOB [place of destination], Freight Prepaid

To understand each designation, we must first understand the difference between place of origin and place of destination and freight collect vs. freight prepaid. The first part of the designation determines where the buyer assumes title of the goods and the risk of damage from the seller (either at the moment the carrier picks the goods up for delivery or at the time of actual delivery). The second part indicates responsibility for freight charges. “Prepaid” means the seller has paid the freight; “collect” indicates the buyer is responsible for payment.

Place of Origin vs. Place of Destination:

Place of origin means the buyer assumes ownership of the shipment the moment the carrier picks up and signs the bill of lading while place of destination means the seller retains ownership and control of the goods until they are delivered. By denoting who “owns” the shipment, there is no ambiguity in responsibility of shipment.

Freight Collect vs. Freight Prepaid:

Freight collect means the person receiving the shipment is responsible for all freight charges. They also assume all risks and are responsible for filing claims in the case of loss or damage.

Freight prepaid is the opposite. The shipper accepts responsibility for all freight charges and risks.

Why does FOB matter?
FOB is important for a number of reasons, but most importantly, shippers and carriers need to understand FOB designations in damage situations. Some receiving docks will refuse delivery of obviously damaged goods, rather than accept with a damage notation for future claim against the carrier. However, a shipment designated FOB Origin technically belongs to the buyer/consignee at the time that it is shipped. So, the consignee would be refusing delivery of goods it legally owns and bears the risk for. The seller has no legal reason to accept those goods back and the return shipment could possibly result in additional damages.

What is Sea Freight?
Sea freight service is a method of transporting large amounts of goods using carrier ships. Goods are packed into containers and then loaded onto a vessel. A typical cargo ship can carry around 18,000 containers, which means that sea freight is a cost-efficient way to transport high quantities over large distances.

There are a number of ways in which sea freight can be transported.

How does it work?
Sea freight is just one cog within the machine that forms a supply chain network. Some companies opt to use a specific 3PL to have their goods shipped safely and legally. As mentioned in our Top 5 benefits of 3PL, one of the major benefits of these providers is that they already know all of the requirements and you will not have to engage with a shipping company for each item.

Once you have engaged with a shipping company, they will collect the goods from your supplier and move them through the port in one of the previously mentioned forms. It is worth noting that delivery times should include a delay moving through the port each side as they have to pass through customs.

Even with LCL as an option, you may still not have enough products, in which case it may be more cost-effective for you to send your products via Air Freight or Courier instead. These are both utilised for sending smaller quantities of products, they are more expensive as the vehicles themselves are smaller.

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