How does the business of containerized shipping work.

Factual Questions
1

The thread about China’s growth WRT containerized shipping made me think of this.

Yes, I understand you put stuff in big metal boxes, these get stacked on big ships, and moved over the oceans. If you think that is all there is to it, you have obviously never tried to access this system. If you have just one container worth of widgets and want them taken across the ocean…good luck with that.

Turns out you can’t just look up shipping in the yellow pages and arrange to have a container delivered to a foreign port.

I have a friend who has had occasion to ship several aircraft across both the Pacific and Atlantic oceans. According to him it has been a colossal pain in the ass each time. This from a man who has navigated the maze that is the FAA and the BATF many times. In each case the Aircraft were disassembled, and either crated or in a purpose built trailer that was known to fit in a Given sized Container, and he has the means to move them to any continental US port. He had already worked through the customs issues for each end, and it didn’t really sound like it would have been any easier if he had been shipping something more common.

I forget the whole long involved story, but apparently he had to work through a long series of middle men in order to get it done. Shippers, shipping agent, broker, and probably a couple of more I probably forget about. Each middleman would refuse to work with him, and refer him to a lower/different level middleman, and I think in a couple of cases there was a circular pattern of referrals. It seems shipping on the high seas has its own terms and customs that make the legal profession look transparent by comparison.

So suppose I want to ship a large, legal, stable, benign article from the USA to Great Britain. Who would I, Kevbo Schmoe, need to speak with so that I only needed to appear at a designated point with the item and pay the shipper without transporting documents and referrals between a number of players? And what sorts of paperwork would be involved?

I assume that if WalMart had to put up with the hoop jumping my buddy has done, they would either own their own shipping line, or there would arise a competitor with streamlined procedures. So there must be some point at which you become a big enough fish that these folks want to work with you. So what size entity are they set up to work efficiently with?

2

Wouldn’t one-off shipments like you propose be better off using a Freight Forwardingservice, and letting them navigate the hoops?

3

Freight Forwarder. That was one of the middle men I couldn’t remember that didn’t want to work with my buddy. Never did he hear “No problem.” It was all “can’t, won’t, don’t, we never”

4

I’ve shipped cars and household goods to/from Hawaii. Different companies. Contact a company/freight forwarder with your needs and they do most of the work. Th ecompany may also be called a freight consolidator. The cars went into containers at the port. The freight company delivered a container to the storage warehouse I was using and I stuffed it. There was paperwork and legal stuff to fill out in six copies that was tedious. [legal liabilities because I had packed it myself, HAZMAT declarations, plant declarations, joint car inspection and inventories, etc…].

Same thing with my friend’s collection of antique phonograph materials going from Florida to Italy. Company delivered container to his house. There were additional Customs forms and a visit from an inspector at both ends of the shipment but the hassle wasn’t unbearable. We will be working on a second container over New Years.

5

This is one reason why WalMart became so successful- they are famous for having made huge innovations in supply chains and logistics.

You are right that it is complicated. You can get very marketable degrees- and even advanced degrees- in logistics. Logistics companies have to be fluent in import/export laws, customs, the regulations of transport related labor unions, etc. A lot of these middle men are mom and pop operations who put in long hours and draw on decades of hard-learned knowledge.

I imagine your friend ran into trouble because it was a one-off kind of thing. The initial legwork is the hard part, and it may not be worth it for a company to do it when they can just as easily do the work for someone else who can offer long-term ongoing profits.

That said, there are freight forwarders that work with routine one-off things like overseas moves. I imagine it is mind-bogglingly pricey, though.

6

You are looking for a freight forwarder. I know, I work for one. The process is more complex than you can deal with as an individual, especially when you get into the documentation part. Plus somebody who ships hundreds or thousands of containers per year has contracts with various steamship lines and can get a much better rate for you than you possibly could by yourself.

You don’t even need to show up anyplace in particular. You tell the freight forwarder what you need to have done and they will tell you what it will cost. If you agree, you send them the money and they transport your stuff.

There are of course many variables. In your friend’s case, there was an item that had to be prepared for shipping by being disassembled. Assuming the freight will fit into a shipping container, you need to have someone who will do that. Most of the time a business or factory already has a loading dock and employees who know how to do that job. It the stuff is too big to fit inside a container there are other options such as break bulk, open-topped containers, etc. Freight forwarders also have access to other vendors who can do container stuffing, truckers who will handle the transport to the port, etc.

The documentation is a major part of the process. We have a department that does nothing else.

7

I really don’t have the ansewer for any of your questions, but I do know that just before the meltdown, there was a shortage of containers.

Delivery times on shipping was such that you had to book well in advance, and became a supply and demand situation.

I assume now that the container shipping business has stablized and booking one should be less painful.

Declan

8

A friend of mine who owns a small antique shop used to make a trip every year to England, where he would fill up a single container with antique furniture, then have it shipped back to his shop. So I know that shipments of a single container can be done and are cost-effective. I think the English dealers handled most of the arrangements.

Sometimes he conducted tours, taking along friends who wanted to buy antiques. They would travel to different wholesale establishments and keep buying stuff until the container was full. How they determined that unless they dragged it along with them, I don’t know.

9

You have to deal with a freight forwarder or export broker who will either handle everything or put you in contact with a few other companies you may need to work through.

If money is being exchanged overseas it is common to do an irrevocable letter of credit between banks that assures payment. You can’t just send a bill to somebody in China, or they to you, and expect that it will be paid. How would you sue them if they don’t? So the money aspects are a big concern.

There is a great deal of export documentation that needs to take place and is not something that you are likely to be able to do correctly yourself.

There is the container/shipping line that needs to set up your shipment and possibly a separate freight company that will pick up and deliver the container. If you are not capable of getting the container loaded you will need to make arrangements to do that with someone else. At either end the container may be kicked aside and go into quarantine for inspection.

This is not something that you can do by yourself with a telephone. You really do need to hire a freight forwarder or export broker to handle all this stuff. Search for an export broker and pay them to handle things. Even medium sized corporations do not attempt to take this on by themselves, they set up a relationship with an export broker.

Originally posted by MLS

Yeah. This is a bit of an understatement.

10

That hasn’t the case in the North East US for a long time, especially Port Newark (or any international port for that matter). Indeed, the Walls of Containersproblem has been around for at least a decade in many areas (the link is about Newark, NJ), probably many decades.
I am not sure about the West Coast or the Gulf Coast, but I would assume the same situation applied/applies.
Now, if you are talking about originating countries in the Asian Rim like China or South Korea, yeah, I could see such a shortage there.
While there are still mountains of containers around, re-purposed containers are popular with businesses and municipalities for storage sheds, garages (more for small equipment rather than autos due to their usual 8foot width), mobile offices (with doors and windows cut in), heck even back walls of scrapyards. In some way this remains me of the old Mississippi flatboat trade of the early 19th century, where farmers would float down their produce to New Orleans, and after selling it make some more money by selling the flatboats for lumber - now Asian firms ship their goods to North America, and sell the containers for storage units…

11

This isn’t really correct. Containers are too valuable as containers for them to be sold for other purposes before they reach the end of their working life. Where there is a trade imbalance, “empties” as they are known do pile up, but they gradually get redistributed back to where they are needed. Doing so just tends to be low priority.

Re-purposed containers are usually those that have been de-commissioned from active service due to defects or age. I’m not saying that no one ever re-purposes a container that could still be in circulation, but it is not at all routine.

12

As may have been mentioned, you need to find a reputable freight forwarder, Danzas(DHL) Expeditors, Elite, CraneWW, Khune&Nagal, plus some others (who will probably have bought each other by the time I have finished this response).
One thing to bear in mind is that whilst they will “handle” everything, you as the shipper are responsible for everything. So make sure you know what Harmonised Tariff Schedule (http://hts.usitc.gov/ for a real stay up all nighter can’t wait to get to the who dunnit moment read) the goods are shipped with the correct INCOTERMS - is it clear who is taking responsibility for the goods on arrival (Incoterms - Wikipedia) and paying duties. Do you know the duties due related to the class of goods, are they going permanent, temporary import or under end use or freely circulating goods?
A reputable freight forwarder will help you with this, at a cost. This does not absolve you of your responsibility to correctly declare and pay duties and not breach and trade control laws (ie don’t ship certain technologies to vertian countries).
When I have one of the above contracted to move 15 x 40ft containers of metal tubes across the ocean there are probably 10-15 subcontractors involved, trucking to port, packaging, customs clearance, vessel booking, vessel owner, clearance at the other end, trucking, documentation couriers, etc ect. You could go ahead and deal with each of those guiys individually, but they may not want to deal with you as you are an unknown entity.

Know your product classification and customs duties and pay a decent freight forwarder, they are worth it (but obviosuly never tell them that :wink: )

13

WalMart can’t take the credit for containerization. It took off because of the United States military. They got the system up and running when they were shipping supplies across the Pacific during the Vietnam War. Private companies were then able to see the system at work and realize its advantages.

14

Ah, but these were English containers. They’re easier to fill because they speak the same language (but watch out for the Scouse Git brand – hard to understand), the insides look like 221B Baker Street, and the extra space is filled with blown-in crumpets (or nowadays, they more often than not will use Wheatabix, a shredded wheat-type cereal).

15

[NITPICK]Weetabix - and they’re not much like Shredded Wheat :smiley: [/NITPICK]

16

Getting back to a portion of the OP, a huge entity like Wal Mart most likely has its own in-house freight forwarder, and probably contracts with the steamship lines it needs.

In return for the discounted contract rates, a private freight forwarder promises the carrier a certain volume of business for the year.

We generally charge a fixed documentation fee per booking, and we provide all kinds of help to a shipper who doesn’t know the ins and outs of the process, including INCO terms, harmonized commodity codes and so on. We also have agents at the destination who will (for a fee, of course) provide the necessary services to the consignee if necessary.

If you actually need to ship something, you can send me a PM and I’ll be glad to advise.

17

What sort of cost is shipping by container as a single unit?

Take the antique dealer situation above. Assume that the container has been loaded.

$500? $2000?

I realize there are dozens of variables based on size, weight, types of goods, etc. but what kind of costs are container shipping?

18

You will probably spend $500 just getting the container delivered to you, stand by while you load, and then delivered back to port.

You usually get an hour or 2 stand by for free and then start getting charged an hourly rate of 35-$50. If you want the container delivered one trip and then picked up on another trip you will pay more.

Beyond that it depends on where the container is going.

19

The actual shipping cost varies so much it is pointless to guess how much it will cost. There are literally at least a dozen variables. The cost for a pickup can be somewhat less or significantly more than Dallas Jones’s estimate. If you are located in East Jabip just north of Nowhere it could cost you easy over $1000 just to get to the nearest railroad. If you’re shipping a 20-foot container of non-hazardous commercial cargo from an east coast U.S. port to a major port in northern Europe, and if you don’t care about slow transit time, your ocean freight might be only about a thousand. On the other hand, if you’re going to someplace far away that does not have many carriers serving it, the sky’s the limit, especially if (a) you’re in a hurry or (b) your cargo is hazardous or © your cargo is hazardous or (d) your cargo requires refrigeration or (e) your cargo won’t fit into a standard container.

Most truckers provide at least an hour or two free driver wait time. I’ve seen overtime rates as high as $100 per hour beyond that, but around $50 to $75 is more common.