Shipping is complicated. That’s why they call it logistics. Unfortunately, logistics can’t be avoided if you’re an ecommerce brand owner. No matter what you’re selling in your online store, you have to ship your merchandise in bulk to a fulfillment center (what we call inbound freight shipping), and you also have to deliver orders to your end customers (what we call outbound small-parcel shipping). You’re not a shipping expert, yet here you are, struggling with decisions on how best to ship things on a daily basis.
If you frequent our blog, you know that we often wax poetic about ecommerce order fulfillment and shipping, but today we’re going to talk about freight and freight shipping. What’s the difference? What is freight? Which freight shipping method is best? How do you choose a carrier? Could you be getting a lower rate? Tired of fretting about freight? Help is on the way!
What is Freight Shipping?
Freight shipping is defined as the transport of goods in large quantities for commercial use. The goods are packaged in bulk, in boxes or stacked and wrapped on pallets. The pallets are then loaded onto trucks or planes for shipment, or stowed in large shipping containers, which are transported by ship, train, or truck.
Freight is the actual bulk goods that are being transported. When freight is shipped by ocean or air, it’s usually called cargo (don’t ask us why). You might also hear freight called “carriage,” which is the British term for freight. Technically, freight, cargo, or carriage is any load that exceeds:
- 150 pounds
- 165 inches in length and width combined
- 108 inches in length
Freight Shipping Modes
Ecommerce brands must use freight shipping carriers to ship freight (i.e., large quantities of merchandise) from their manufacturers or suppliers directly to a warehouse or fulfillment center for storage and fulfillment services. They might also use freight carriers to distribute merchandise across multiple fulfillment center locations. Before you choose a carrier, you should decide which shipping mode or method is best for your shipment.
There are several freight shipping modes to choose from, depending on where the shipment is coming from, where it’s going, how quickly it needs to get there, and how much you want to spend on freight shipping.
The fastest, but most expensive freight shipping mode is air freight. Air freight, or express shipping is ideal for time-sensitive deliveries. After all, if your product is fresh seafood, it can’t sit in a shipping container for two weeks. Air transport is also better for fragile items, because air cargo isn’t loaded and unloaded multiple times like trucks and shipping containers often are. Because airlines are limited in terms of space and the amount of weight they can carry, they charge by dimensional weight (DIM weight), or the volume (cubic inches per pound) your shipment takes up. Air freight is also most susceptible to delays caused by bad weather and has a large carbon footprint, producing over 53 lbs. of carbon dioxide per mile.
The most budget-friendly freight shipping method, ocean freight is also the most earth friendly because ships can carry much more cargo per trip than a truck, train or plane. Ocean freight is, however, the slowest method of transport and must enter the country through a major port. From there, the container or its contents must travel by truck, rail, or air to its final destination. If time isn’t of the essence, ocean freight is perfect for shipping large or heavy merchandise, such as vehicles or machinery, or large loads of any type of merchandise on a budget.
Ocean cargo is priced by Full Container Load (FCL) or Less-than Container Load (LCL). If you can fill a shipping container all by your lonesome, you’ll pay a flat rate per container and have more control over handling, since you’ll be loading and unloading the container yourself. FCL is also the best choice if you’re shipping hazardous goods or fragile goods. The downside is that you have to load and unload the container yourself, and it may take time for your manufacturer or supplier to fill an entire container.
If you’re not shipping that much merchandise or just want more flexibility, you have two choices: you can pay for a full container load even though it’s not full, or you can share a consolidated container with other shippers and pay LCL rates for the space you use. The advantage of LCL shipping is that you don’t have to wait until you have a full container to ship your merchandise. The disadvantage is that you have no control over the other cargo in the container, or how many stops the container makes on its way to your fulfillment center. LCL rates are higher per unit than FCL rates due to the extra handling.
Shipping lines offer a variety of container types in addition to the standard dry container, including insulated or refrigerated containers for temperature and ventilation control, tanks for liquids, and flat rack containers. Standard sizes are 10’, 20’ or 40’ long by approx. 8’ wide and 8.5’ high. Taller containers can be ordered when ventilation or extra space is required.
Rail freight, or cargo transported by freight train, is similar to ocean freight in that it is both budget-friendly and earth-friendly for large volumes of goods traveling long distances. A train uses less energy than a truck to get from point A to point B but moves just as fast, and can carry the freight equivalent of 300 trucks. Rail freight, like ocean freight, is priced by FCL or LCL and can carry the same-size shipping containers, but rail freight is flexible enough to handle extra large or oddly shaped goods, such as wind turbine blades. Rail transport is highly reliable in the U.S. and services all major markets, but last-mile ground transport may be required to move goods to their final destination.
Ground freight, or freight transported by truck, is the most common form of freight transport within the United States because it is quite flexible and can go from door to door. Ground freight is priced by Full Truckload (FTL) and Less-than Truckload (LTL), and the advantages and disadvantages of each are similar to FCL or LCL freight. In general, if your shipment is larger than 6 pallets or 14 linear feet, FTL is the more efficient option.
One major difference between ground shipping and other forms of freight is that shipping rates are determined in part by your freight classification. The National Motor Freight Traffic Association maintains a set of codes for trucking companies and shippers that
determine a commodity’s “transportability” and help to establish best practices for safe handling, proper packaging, and consistent pricing. Thousands of different types of goods are assigned unique NMFC codes based on 4 characteristics:
- Density. Length X width X height divided by weight of each handling unit (that is, each wrapped pallet, crate, individually wrapped item, or box, including the outer packaging and/or pallet). High-density items or extra-large units usually incur additional fees.
- Handling. Does your shipment require special handling due to hazardous materials, easily damaged or perishable items?
- Stowability. Can it be packed into uniform-size containers that are easily stackable and can withstand the rigors of LTL transport, or does it need to be secured in a specific way?
- Liability. How much risk, from low to high, is involved in transporting these goods? Risks include breakage, spoilage, fire, or explosion, loss or theft. The level of risk and value of the shipment are used in contract negotiations.
The National Motor Freight Classification (NMFC) codes are grouped into 18 different LTL freight classes, from a low of class 50 to a high of class 500. The lower your freight class, the lower your LTL shipping rate.
In order to get a quote from a trucking company, you’ll need to know your shipment’s NMFC freight class. In addition, you’ll need to know the shipment’s point of origin, destination and any time constraints.
Intermodal or Multimodal Freight
Intermodal freight combines two or more modes of transportation for the same shipment, such as air and rail, or ocean and ground. Because intermodal transport involves multiple carriers and crossing oceans, continents, and national borders, it is incredibly complex to orchestrate. Third-party freight forwarders and customs brokers can help you navigate these rough waters.
Air, Land or Sea? What’s it Going to Be?
Start with the basics. Where is your shipment originating from and where is it going? How quickly does it need to arrive? Is having a firm pickup or delivery date important? Depending on the country of origin and time sensitivity, you may only have a few options.
If speed is the primary driver, air freight is the best option. If low cost is the primary driver, ocean and/or rail are the best intercontinental and international options. LTL freight is the low-cost option for domestic freight. Rail for heavy items or large volumes going long distances. Once you know which freight shipping methods to explore, you can begin getting quotes and comparing rates.
There are global freight shipping companies, intercontinental freight shipping companies, national, regional and local freight shipping companies. Those operating their own vessels are known as Vessel-Operating Common Carriers (VOCC). Those operating as carriers but do not own the vessels they operate are called Non-Vessel Operating Common Carriers (NVOCC). Those that act as agents, arranging for the movement of goods on behalf of the cargo owner, are known as freight forwarders. Freight forwarders do not own or operate the actual vessels, but utilize their choice of carriers to best serve their client.
How to Compare Freight Shipping Rates
To compare shipping rates, you must get quotes from each individual shipping carrier you’re considering. (Consider asking your third party logistics (3PL) fulfillment partner to handle this for you, since they already have partnerships with most shipping companies and can easily handle freight shipping services.) Either way, if you want an accurate quote you’ll need to be prepared to answer a few questions about your shipment. These will determine the rate you are quoted:
- Volume (FCL or LCL, FTL or LTL)
- Handling requirements
- Liability (value and risk)
- Time Sensitivity
- Freight Class
Help is Available!
We just dumped a truckload of information on you, so if any of this needs further explanation, help is out there. Here are a few places to start:
Your 3PL: If you partner with a 3PL for your order fulfillment needs, ask them if they can also handle inbound freight for you. A 3PL like ShipMonk has a huge network of shipping partners that we already work with, so it’s easy to add freight shipping to the tasks we handle for our ecommerce clients. We can evaluate your options and help you find the most reliable carrier at the best rate. And we’re more than happy to handle distributing your inventory across any of our 12 fulfillment centers, including Mexico, Canada, continental Europe, and the UK.
Freight Forwarder: Depending on the complexity of your supply chain, a freight forwarder can take a huge load off your hands. A freight forwarder is a person or business that organizes and manages the movement of freight on behalf of the cargo owner. This job entails scheduling shipments from different manufacturers and suppliers in different locations and time zones, working with multiple shipping carriers and shipping modes and successfully transferring goods from one to the other, handling all the paperwork and millions of other logistical tasks that you won’t have to worry about.
Customs Broker: If you are shipping freight across oceans and borders, a customs broker can smooth the way. A customs broker is a person, business or association licensed by U.S. Customs and Border Protection (CBP) to assist ecommerce brands in importing or exporting goods. They ensure that importers and exporters are meeting Federal requirements and not inadvertently breaking any laws. Brokers submit necessary information and appropriate payments to CBP on behalf of their clients, and charge them a fee for their services.