Detailed explanation of ocean transportation methods and common costs

Ocean transportation has become the most important part of international trade due to its advantages such as large carrying capacity, low freight, and strong throughput. This article aims to comprehensively analyze the various methods of ocean transportation and their common cost items, and help foreign trade companies better understand and control costs.

Characteristics of ocean transportation

Ocean transportation occupies a dominant position in international cargo transportation with its three unique advantages. First of all, the carrying capacity is huge. The carrying capacity of modern oil tankers and bulk ships can reach 600,000 tons and more than 300,000 tons respectively. Secondly, the transportation cost of unit commodities is low, about 1/20 of railway transportation and 1/30 of air transportation. ; Furthermore, ocean transportation uses natural waterways, has high flexibility, and is not restricted by tracks or roads. However, ocean transportation also has some disadvantages, such as being easily affected by weather, long sailing time, and high risks.

Main methods of ocean transportation

Ocean transportation is mainly divided into two types: liner transportation and charter transportation. Liner shipping has the characteristics of “four certainties and one responsibility”, that is, the route, port of call, shipping date, and freight rate are fixed, and the shipping company is responsible for loading and unloading the goods. This method is suitable for the transportation of general groceries and trade goods that are less than a full ship, and is especially suitable for the transportation of scattered groceries in cross-border e-commerce. Charter transportation refers to the charterer leasing a ship from the shipowner for cargo transportation, which is usually applicable to bulk cargo transportation. The rights and obligations of both parties are subject to the charter party.

Diversification of chartering methods

Ship chartering methods mainly include time chartering, scheduled voyage chartering, bareboat chartering, bareboat chartering, chartering, and voyage chartering. Among them, time charters are leased for a certain period of time, and the lease period can be long or short; fixed-range charters are chartered by voyages, with no fixed routes and fixed loading and unloading ports; bareboat charters are similar to property leases and are managed by the lessee; bareboat charters are similar to property leases and are managed by the lessee; Ship hire purchase is equivalent to buying a ship in installments; ship chartering is to complete freight between determined ports with a certain capacity; voyage time chartering is for the purpose of completing a voyage, but the rent is calculated on a daily basis.

Common shipping costs

In actual operation, in addition to the basic sea freight, there will be various additional charges:

• ORC: Origin Receiving Charge, the terminal receiving fee for ports in Guangdong Province or South China;
• SPSC: Shanghai Port Surcharge, Shanghai Port Terminal Surcharge;
• PSS: Peak Season Surcharge, peak season surcharge;
• DDC: Destination Delivery Charge, pick-up fee at the destination port;
• THC: Terminal Handling Charge;
• BAF: Bunker Adjusted Factor, fuel surcharge;
• DOC: Document, document fee;
• DTHC: Destination THC, a destination port fee similar to DDC;
• PCS: Port Congestion Surcharge.

These costs are often adjusted by shipping companies or freight forwarders based on market conditions, and can be passed on to the shipper or receiver based on specific circumstances. Therefore, when choosing a freight forwarder, it is recommended to inquire in detail and compare various costs to ensure transparency and avoid unnecessary economic losses.

To summarize, understanding the various modes of ocean transportation and their associated costs is critical to optimizing supply chain management. I hope this article can provide valuable reference information for enterprises.