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Freight shipping: Know its types, benefits, and how freight shipping works

Freight shipping is a crucial part of international trade. In this blog, learn about freight shipping rates, modes, benefits, required documents, and shipping rates

Logistics is a crucial part of international trade. Whether the product is being sold in a store or on an e-commerce platform, they are all transported from manufacturing units to the final destination. This entire process involves various steps, and one of them is freight shipping. When a package is heavier and larger than the standard package sent through the courier or parcel service, it is shipped through freight services. In this blog post, we will discuss what freight shipping is, the different types of freight shipping services, and key factors, benefits, and costs associated with freight shipping.

What is freight?

Freight is any cargo moved from one location to another that does not qualify for parcel or courier shipping. Unlike packages that get delivered home through couriers which are smaller in size, freights are relatively heavier and bigger. They need bigger vehicles to deliver to the destination. The parameters that qualify a package as freight can vary from carrier to carrier.¹

What is freight shipping?

Freight shipping is the collection of different modes of transportation used to deliver large shipments or freight. It plays a crucial role in international shipping, where a combination of multiple modes of transport is used. For example, if an importer from the USA buys goods from an Indian exporter – goods will be shipped through a ship or an aircraft to reach the port in the USA. From there, a train or truck will deliver it to the final destination. Unlike package delivery, these shipments do not only use small trucks. As large shipments are involved in this mode of shipping, they often use semi-trucks or similar modes of transport to deliver cargo.²

What are the different modes of freight shipping?

Freight shipping encompasses a wide range of services designed to cater to the diverse requirements of businesses. Factors such as the size, nature, and urgency of the shipment determine the most appropriate shipping method. Some of the key types of freight shipping are as follows:

Less than truckload (LTL)

Less than Truckload or LTL is the preferred shipment method for small shipments, which do not require an entire trailer. Although this method is cheaper than others, it takes additional delivery time as they need to load and unload other shipments along the way. LTL is suitable for shipments between 150 to 15,000 pounds.

Full truckload shipping (FTL)

A full truckload (FTL) mode is used when shipments are in bulk and weigh more than 15,000 pounds. It is private shipping, meaning you will not share truck space with other shipments. This ensures fast delivery and a low risk of damage.

Partial truckload shipping (PTL)

A partial truckload is similar to LTL. In this shipping mode, shipment space is shared with other businesses, but the shipment is larger than it is in LTL. That means there are fewer businesses sharing space on the truck, which reduces delivery time and risk of damage.

Air freight shipping

Aircrafts are the fastest and most direct way to deliver shipments from the source to the destination. As shipments sent through this mode are expensive, businesses often reserve air freight only for packages that need fast delivery and are in small sizes.

Sea freight shipping

Sea freight offers low shipping prices and can cover long routes, often across continents — 80% of goods shipped around the world travel by cargo ships.

Rail freight shipping

Trains are the preferred shipping mode if the shipment is not on a tight deadline. It effectively takes shipments closer to the destination, where they are loaded onto trucks for last-mile delivery.

Intermodal shipping

Intermodal shipping is a shipping mode that uses multiple modes of transport. It can combine different modes, such as air, ocean, and ground.

Expedited shipping

When shipment is on a tight timeline, expedited shipping ensures timely delivery of goods. Expedited shipping commonly uses planes and trucks. The exporter needs to pay premium fares for different delivery speeds.³

Benefits of freight shipping

Freight shipping can be suitable for exporters as it ensures fast and safe delivery of bulk and large shipments. Following are some of the benefits of freight shipping:

Coverage for a range of shipments

Freight shipping handles diverse shipments of different shapes and sizes, often using pallets to protect goods from damage.

Cost-effective

Freight shipping is one of the most economical methods for transporting large shipments, especially via trains and ships. Using LTL shipping can further reduce transportation costs.

A reliable method of transportation

Freight shipping is dependable, ensuring large goods are delivered on time. It follows a fixed schedule, grouping customers from similar areas to maintain consistent deadlines.⁴

Factors that affect freight shipping rates

Shipping rates directly impact business profitability and product pricing. Some key factors that influence freight shipping rates are as follows:

Delivery time

Faster delivery times increase shipping rates. High-priority rush shipments cost more than slower ones, with earlier delivery dates being more expensive.

Distance

The total distance a shipment travels affects rates. International shipments are pricier than regional ones.

Shipping mode

Different shipping modes, such as air, sea, rail, and truck, influence costs. Air shipping is the most expensive, while ocean freight is the most economical.

Weight and size

Heavier shipments cost more due to the increased space and weight they occupy.

Weather

Weather can impact shipping time and cost. Heavy rain, snow storms or bad weather at sea can delay shipments and increase costs.⁵

How to calculate freight shipping costs?

In addition to the points discussed above, other factors that affect shipping costs include customs duties, documentation, storage, insurance, and handling fees. Some of these factors are discussed below:

1. Packing

Efficient packing optimizes space usage within the shipping container, ensuring the cargo fits correctly and safely.

2. Cost of container

Standard containers typically come in 20 and 40-foot sizes. If a shipment doesn't require a full container load (FCL), costs are based on the space the goods occupy.

3. Carrier costs

Carrier costs include the expenses of transporting shipments by sea, land, or air, as well as moving the carriers to their destination.

4. Documentation fee

The types of documentation required in the shipping process impacts the freight shipping cost.

5. Insurance

While carriers must have liability insurance, additional coverage for shipments deemed vulnerable can impact costs.

6. Administrative charge

The cost of organizing, coordinating, and managing the shipping process is reflected in the administrative charge.⁶

How to ship freight?

Once you decide to use freight shipping, the next step is to prepare for the shipping process. Here are some of the steps involved:

Step 1:

Prepare and obtain the necessary documents inducing the ones required by the carrier.

Step 2:

Choose a palette that is right for the cargo and is not damaged.

Step 3:

Evaluate goods for any damage, replace damaged goods, and make a note of minor damages.

Step 4:

When using the palette, stack cargo vertically, aligning it with the palette. Make sure that the shipment is not hanging over the edges. Use protective padding wherever necessary.

Step 5:

Use bands and straps to secure the cargo.

Step 6:

Create labels that include the destination address and contents and place them on the cargo.

Step 7:

Move the shipment to the first point where the carrier can pick it up.

Step 8:

Take a picture of each palette for your reference.⁷

Documents required for freight shipping

Shipping documentation requirements will depend on various factors like the type of cargo, destination country, etc. Some documents and certificates that are generally required for international freight shipping are as follows:

· Packing list
· Commercial invoice
· Bill of lading and Sea waybill
· Export/Import Customs Declaration
· Air waybill or rail waybill
· Arrival notice
· Importer security filing
· Letter of credit
· Certificate of Origin (COO)
· Production certificate, vessel certificate, or phytosanitary certificate⁸

Entities involved in freight shipping

Various government and non-government bodies, organizations and individuals are involved in the shipping process. Some of the key entities involved are as follows:

· Shipper/exporter
· Consignee
· Notify party
· Freight forwarder
· Port agent
· Carrier⁹

Freight shipment with a 3PL

The logistics involved in international shipping can be complex, but a third-party logistics provider (3PL) can simplify the process. A 3PL manages tasks like picking, packing, inventory control, order processing, shipping, distribution, and returns. They also handle freight forwarding, customs brokerage, warehousing, and transportation.

While hiring a 3PL entails additional costs for your company, it often leads to long-term savings. 3PLs leverage their purchasing power and extensive global networks to negotiate competitive service prices. By effectively managing logistics, a 3PL enhances your bottom line, freeing you to concentrate on core business activities.¹⁰

Freight shipment with a freight forwarder

For businesses managing bulk transportation, importing and exporting can quickly become costly and time-intensive. In such situations, freight forwarders play a crucial role in reducing costs and enhancing operational efficiency. Freight forwarders act as intermediaries between the company shipping goods and their final destination. Although they do not carry out the shipment themselves, they offer various transportation options such as air, rail, road, and ocean freight.

Freight forwarders leverage their extensive network of carriers and partners — including trucking companies, air transport specialists, and oceanic lines — to negotiate competitive prices. They charter vehicles, assess multiple offers, and select optimal routes based on speed, cost-effectiveness, and reliability, tailored to each specific case's requirements.¹¹

In conclusion, freight shipping stands as a vital component of global trade, offering businesses the flexibility and efficiency needed to navigate complex supply chains. By leveraging diverse shipping modes and the expertise of third-party logistics providers and freight forwarders, companies can optimize costs and ensure timely delivery of goods across borders. This reliability and scalability make freight shipping particularly advantageous for e-commerce exports, facilitating seamless international transactions and enabling businesses to reach global markets efficiently. For additional support and assistance with e-commerce exports, Indian exporters can leverage the tools and services offered by e-commerce export programs like Amazon Global Selling.

Hassle-free international shipping with Amazon FBA

Shipping internationally can be a complex process, especially for exporters starting new operations. Safe and timely deliveries impact profitability, brand authority, and customer loyalty. With its e-commerce exports program - Amazon Global Selling, the brand enables Indian sellers and exporters with the entire export process including international logistics. With Fulfillment by Amazon (FBA), sellers can send their shipments to Amazon fulfillment centers. Amazon then handles storage, packaging, and delivery on your behalf.

To support you with hassle-free logistics, Amazon has also launched SEND, enabling you to ship directly to international fulfillment centers at competitive prices. All you have to do is book, pay, and track shipments without any hassles from India to the world.

Explore Amazon SEND

Frequently Asked Questions

What is the difference between freight and shipping?

Freight is the product or goods being transported – a term used for commercial transportation of goods through air, sea, or ground. On the other hand, shipping is the process of transporting goods.

What is the difference between parcel and freight?

Parcels are small packages which generally weigh less than 150 pounds. Freights are heavier cargo that can weigh up to several thousand pounds.¹²

What is the cheapest way to ship freight?

Ocean freight is considered as one of the cheapest ways to ship larger shipments¹³.

What is freight forwarding?

It is the process of planning and organizing coordinated movement of shipments across international borders on behalf of shippers.

What is the difference between freight and transportation?

Freights are the goods being transported, while transportation is the process of transporting goods from source to destination.

How long does freight shipping take?

The duration of freight shipping varies significantly based on factors such as distance, shipping mode, customs procedures, and the specific logistics involved. It can range from a few days for nearby destinations with expedited services to several weeks for long-distance or complex international shipments requiring customs clearance and multiple modes of transportation.

What is the difference between cargo and freight?

The term ‘freight’ was traditionally used to refer to goods moved overland via truck or train, while ‘cargo’ referred to goods transferred by large ships or planes. However, in modern international shipping, freight specifically denotes goods transported for commercial purposes, while cargo refers to goods being transported by any means.¹⁴

Published on December 30, 2022.

Sources:

1. https://www.fedex.com/en-us/shipping/freight.html
2. https://www.netsuite.com/portal/resource/articles/inventory-management/freight.shtml
3. https://www.netsuite.com/portal/resource/articles/inventory-management/freight.shtml
4. https://www.netsuite.com/portal/resource/articles/inventory-management/freight.shtml
5. https://www.netsuite.com/portal/resource/articles/inventory-management/freight.shtml
6. https://www.freightos.com/freight-resources/freight-forwarder-calculating-costs-and-fees/
7. https://www.netsuite.com/portal/resource/articles/inventory-management/freight.shtml
8. https://www.maersk.com/logistics-explained/shipping-documentation/2023/08/27/important-shipping-documents
9. https://www.icontainers.com/us/2014/05/08/parties-involved-shipping-overseas/
10. https://dclcorp.com/blog/shipping/outsource-your-freight-shipping-to-a-3pl/
11. https://www.dsv.com/en-in/support/faq/what-is-freight-forwarding
12. https://www.fulfillrite.com/blog/what-is-the-difference-between-parcel-and-freight/
13. https://dfreight.org/blog/what-is-the-cheapest-shipping-method-in-2022/
14. https://www.shiprocket.in/blog/freight-vs-cargo-delivery/

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