Sea Freight Shipping from China – TFG 2022 Ultimate Guide

Shipping from China Guide

Trade Finance Global / Freight Forwarding / Sea Freight Shipping from China – TFG 2022 Ultimate Guide

Sea freight shipping is the most popular shipping method for buyers when shipping from China. However, there are complex issues involved in shipping from China such as the freight related issues and the steep learning curve involved.

China Shipping Guide

We’ve partnered with Jack Zhou from Sourcing Bro to shed light on all you need to know about sea freight from China.

In this article, you’ll learn:

 

Shipping from China 101: The Process of International Logistics

International logistics involves planning and managing the flow of goods in a company’s supply chain from acquisition to customer purchase. Part of the process involves crossing at least an international border.

The figure below shows the diagrammatic representation of the whole process:

Shipping From China Cost

When shipping goods from China through oceanic routes, lots of factors should be considered to ensure a successful freight. The following factors determine the cost of shipment:

  • Size and Weight

Size and weight determine, to a very large extent, the cost of your shipment. The distance covered and the commodity also influence the shipping rates. Thus, you need to consider the accurate measurements and weight of your cargo. You also need to identify the commodity that you are shipping.

  • Freight Class

Freight class also impacts your shipping cost. A detailed explanation of what freight classification entails can be provided by your freight specialist. Basic freight classification guidelines for LTL shipping involve:

  • The weight
  • Type of packing
  • Value of the shipment
  • Susceptibility of products to damage
  • Product’s load-ability, and
  • Handling characteristics.

The freight classification increases with the fragility and value of your products.

  • Dimensional Weight

Dimensional weight is an important factor that influences shipping cost but can be confusing. Dimensional weight is a standard formula employed by freight shipping companies and considers the density of a shipment when determining shipping costs. Apart from gross weight, dimensional weight also determines the transportation fees.

Important Documents Used In Sea Freight From China

Bill of Lading

Bill of Lading (B/L) refers to the ticket that outlines the journey of the cargo from its origin to its destination. It’s synonymous with an airline issuing a ticket to a passenger. The bill of lading is issued by a carrier to a shipper and outlines the method and path of a shipment (irrespective of the path). It acts as a contract for the shipment of goods with the terms of the contract outlined on the back of the bill. It also functions as the receipt for the cargo and as proof of ownership of the goods being shipped.

Bill of lading outlines the key players in the shipment of your goods. The players include:

  • The shipper and consignee of the goods
  • The carrier that issued the Bill of Lading
  • The origin freight forwarder
  • The arrival agent/ destination freight forwarder
  • The freight payer (this indicates the person that is paying for the transportation)

Also, the Bill of Lading shows the goods that are being shipped as well as the specific handling instructions. The information often includes:

  • The content of the shipment (such as hanging garments, electronics, food)
  • The type of inner packaging (for instance boxes, crates, drums, sacks or rolls)
  • The type of outer packaging
  • Identifying markings or characteristics
  • Type of transportation used
  • Specific handling instructions
  • Weight and volume of the cargo.

Moreover, the Bill of Lading also maps out the journey that the shipment will go through to get from the seller to the buyer.

Commercial Invoice and Packing List

A commercial invoice is a list of contents that the seller provides to the buyer which includes information such as the product name, specification, quantity, unit price, total amount, etc. It helps foreign buyers to confirm the goods that are paid for. It’s also useful for customs clearance and for paying duty and tax when the goods arrived. Despite the fact that the commercial invoice is not a receipt (like a bill of lading) for the goods, it is one of the most important documents in the import/export trading process.

The data and content in a Packing list must be consistent with the contents in the bill of lading and other documents as well.

Top Shipping Ports in China

The top shipping ports in China include:

  • Port of Shanghai

This includes Yangshan Deep Water Port & Waigaoqiao Shipping Terminals and it’s been operated by Shanghai International Port (Group) Co., Ltd. The port now handles over 35 million Twenty-foot Equivalent Unit containers per year and it keeps growing with more plans on the ground to increase its capacity.

  • Port of Shenzhen

It includes Yantian Port, Shekou Port, Dachan Bay Port and Chiwan Port,  and it is being operated by Shenzhen Yantian Port Holdings and Shenzhen Chiwan Wharf Holdings. The name ‘Port of Shenzhen’ is a collective term that refers to the multitude of ports found in Shenzhen City.

  • Port of Qingdao

It includes Dagang Port Area and Qianwan Container Terminal. The port is operated by Qingdao Port (Group) Co., Ltd.

  • Port of Ningbo

It includes Zhenhai Port and Beilun Port and it is being operated by Ningbo Zhoushan Port Group Co., Ltd. It is officially called the Port of Ningbo-Zhoushan since Ningbo and Zhuoshan ports were merged in 2006.

  • Port of Guangzhou

The port includes Xinsha Port Area, Nansha Terminal, Downtown Port Area, and Huangpu Port Area, and it’s operated by Guangzhou Port Group Co., Ltd.

  • Port of Tianjin

It includes South Port, East Port and North Port, It is operated by Tianjin Port (Group) Co., Ltd. It is located about 150km southeast of Beijing. The port made headlines in 2015 after various explosions (caused by poor chemical storage) led to damages and loss of lives.

  • Port of Xiamen

It includes Haicang Port Area and Dongdu Port Area. It is operated by Xiamen Port Holding Group.

  • Port of Dalian

It includes Dayaowan Port and it’s operated by Dalian Port Group Co., Ltd. The port is located in Liaoning province. It shares a border with North Korea and it’s China’s most northerly ice-free port.

  • Port of Hong Kong

It includes Kwai Tsing Container Terminals and it’s operated by Modern Terminals Limited, Hongkong International Terminals Limited, China Ocean Shipping (Group) Company, DP World, and Asia Container Terminals Ltd.

The Big Players Involved In International Logistics

Shipping Company

This refers to a company that handles the shipment of goods. The service of shipping companies is usually employed due to the following reasons:

  • Convenience – Shipping companies help to make shipping convenient. They know the best way to package and ship goods. They also help in saving time, energy and money on packaging supplies.
  • Better Shopping Experience – Shipping companies help to create a better shopping experience without any disappointment through the creation of an accessible shipping location.
  • Ability to Send Packages Anywhere – Shipping companies help you to send packages where you couldn’t send before. Some shipping companies enable you to buy your items, have them shipped to your mailing address and then forward them to you.

Custom Broker

Custom brokers prepare and submit documentation to notify or obtain clearance from government agencies. They also arrange local delivery of items through trucking companies. Customs brokers can be located at inland ports so that they can clear merchandise sent “in bond.”  Most custom brokers are located at major airports and harbours that have international traffic.

Freight Forwarder

A freight forwarder (also known as a non-vessel operating common carrier) refers to a person or company that organizes shipments for individuals or companies to move goods from the manufacturer to a market or final point of distribution.

They handle the inter-country movement of cargo by acting as the middlemen between the shipping lines and the importer or exporter. They are hired to get the product to the customer by a particular date in an undamaged state. They handle tasks such as:

  • Packaging
  • Labelling, and
  • Documentation

 

All You Need To Know About Incoterms

Shipping incoterms refer to international standard codes that determine when and where the cargo will be transferred between the supplier and the importer. They are trade terms that are being published by the International Chamber of Commerce (ICC). These terms are usually used in international and domestic trade contracts.

The commonest trade terms include:

FOB Shipping

FOB means Free On Board. It indicates when liability and ownership are transferred from a seller to a buyer. When FOB shipping is used with an identified physical location, then the designation determines the person that will handle the payment of the freight charges and the point the shipment passes from the seller to the buyer.

Buyer and Seller Liability For FOB Shipping

  • Seller
  • Buyer
  • Delivery of goods and transfer of documents
  • Payment and provision of documents.
  • Picks up goods.
  • Handles export customs clearance procedures and payment
  • Handles import customs clearance and payment
  • Charters booking and pays the sea freight fee
  • Handles insurance and pays the insurance premium
  • Bears all risks before the goods have crossed the port of loading
  • Bears all risks and expenses after the goods have crossed the port of shipment

CFR Shipping (C&F Shipping)

CFR stands for Cost and Freight. It implies that the seller needs to pay the costs and freight that are needed to bring the goods to a particular port of destination. In this case, the risk of loss or damage of goods as well as the additional costs (after the goods have been delivered on board the vessel) is transferred from the seller to the buyer.

In CFR shipping, the seller needs to arrange for the carriage of goods by sea to a port of destination and also provide the necessary documents (that will be needed to obtain the goods from the carrier) to the buyer.

Buyer and Seller Liability for CFR Shipping

  • Seller
  • Buyer
  • Delivery of goods and transfer of documents
  • Payment and provision of documents.
  • Picks up goods.
  • Handles export customs clearance procedures and payment
  • Handles import customs clearance and payment
  • Charters booking and pays the sea freight fee
  • Handles insurance and pays the insurance premium
  • Bears all risks before the goods have crossed the port of loading
  • Bears all risks and expenses after the goods have crossed the port of shipment

CIF Shipping

CIF (Cost, Insurance and Freight) is a term that requires the seller to arrange for the carriage of goods by sea to a port of destination and also provide the buyer with the documents that are needed to obtain goods from the carrier.

Buyer and Seller’s Liability for CIF Shipping

  • Seller
  • Buyer
  • Delivery of goods and transfer of documents
  • Payment and provision of documents.
  • Picks up goods.
  • Handles export customs clearance procedures and payment
  • Handles import customs clearance and payment
  • Charters booking and pays the sea freight fee
  • Handles insurance and pays the insurance premium
  • Bears all risks before the goods have crossed the port of loading
  • Bears all risks and expenses after the goods have crossed the port of shipment

Shipping Containers

In case you plan to import full container loads, you can use any of the following four different container volume options:

  • FCL 20’’ (Volume: 33.2 cbm)

It has dimensions of 5.89m x 2.35m x 2.39m and a maximum weight of 24 tons. The actual cargo gross weight is 18 tons.

  • FCL 40’’ (Volume: 67.7 cbm)

It has dimensions of 12.03m x 2.35m x 2.39m and a maximum weight of 30.48 tons. The normal cargo gross weight is 26 tons.

  • FCL 40’’ HQ (Volume: 76.3 cbm)

It has dimensions of 12.03m x 2.35m x 2.69m and a maximum weight of 30.48 tons. The actual cargo gross weight is 26 tons.

Different shipping companies may have different container volumes. You can save lots of money on sea freight costs that are related to the container volume. You can do this by placing orders based on the units that align with particular container size and not a predetermined quantity.

By doing this, you will be able to avoid situations you pay for empty space or order one FCL container and one LCL container.

Since LCL attracts higher port charges and ‘per shipment’ administrative fees than FCL shipping, the latter situation is often more costly.

Less Than Container Load (LCL) Shipping

Less than Container Load refers to a shipment that will not fill a container. In LCL shipment, you pay for your load to be shipped in a container with one or more loads from other customers of the freight transport provider. LCL is the most reasonable option to use if you cannot fill a 20-foot container due to the cost and convenience.

There’s no need to worry about returning the container after delivery when you are using LCL shipping. Since you’re sharing the container, the shipping container service company is the one that will worry about the likelihood of having return trips booked for that container. Shippers making use of LCL should only be concerned about the load that is being shipped.

Full Container Load (FCL ) Shipping

This is a type of ocean freight. It does not mean you need to have enough cargo that will fill an entire container. The benefit of FCL shipping is that you don’t need to share a container with other shipments. If you are shipping 6 standard pallets in a 20ft container, 12 standard pallets or more in a 40ft container, the cost-effective means of shipping such cargo is by making use of FCL shipment and not LCL shipment.

 

Practical Example when shipping from China

As stated earlier, the theoretical loading volume for the 3 different containers are:

  • FCL 20’’ (Volume: 33.2 cbm)
  • FCL 40’’ (Volume: 67.7 cbm)
  • FCL 40’’ HQ (Volume: 76.3 cbm)

However, in the real world, it can barely load the same volume. Based on my experience in calculating the loading volumes, here are two tips that I have for you; if the packaging volumes are lower than 0.02m³/ctn, then the actual loading volumes are:

  • FCL 20’’ (Volume: 28 cbm)
  • FCL 40’’ (Volume: 56 cbm)
  • FCL 40’’ HQ (Volume: 68 cbm)

If the packaging volumes are more than 0.04m³/ctn then the actual loading volumes are:

  • FCL 20’’ (Volume: 24-25 cbm)
  • FCL 40’’ (Volume: 53-54 cbm)
  • FCL 40’’ HQ (Volume: 63-65 cbm)

Note that the accurate loading volumes could be slightly different depending on your situation.

I once had a customer that wanted to buy quadcopter drone toys from China in 40 feet container. The outer packaging had dimensions 670mm x 570mm x 505mm with 6 boxes.

In this case, the calculation was carried out as follows:

I added 5mm more for each side. That gives:

0.675mm x 0.575mm x 0.51mm ≈ 0.198m³

Depending on the situation of the packaging, if it has swelled, we can add 1cm-2cm.

0.198m³/ctn > 0.04m³/ctn so we choose these number for 40 feet container

54/0.198 = 272boxes

In total, we have 272 x 6 = 1636 unit drones

We can slightly load 10-20 more boxes in this case. However, 272 is 100% safe.

How much is sea freight from China?

As with any shipping method, the price of sea freight from China will vary depending on the distance that it is being shipped and the size and weight of the shipment. In general, ocean freight will come in around $2-$4 per kg. That said, it is important to also consider other costs, rates, and charges like customs brokerage or insurance that can be added to your bill.

How long does sea shipping take from China?

The world is a big place and shipping from China will take vastly different lengths of time to different places. Here is a loose estimate of the shipping times from Hing Kong to a selection of ports around the world. While these provide a rough estimate, it is important to keep in mind that there are many factors that can cause delays in the process.

  • From Hong Kong to Los Angeles, USA: 20 days
  • From Hong Kong to New York, USA: 32 days
  • From Hong Kong to Felixstowe, UK: 29 days
  • From Hong Kong to Hamburg, Germany: 30 days
  • From Hong Kong to Singapore: 5 days
  • From Hong Kong to Sydney, Australia: 12 days

How long is shipping from China to the UK by sea?

The sea journey from Guangzhou, Shenzhen or Hong Kong to the UK typically takes three to four weeks. On top of this time, you will need to factor in the time it will take to get to the port in China and to get from the port in the UK to your ultimate destination. These times will vary but tend to add an additional one to two weeks to the overall timeline. These estimates also do not consider any number of potential delays that might occur.

How much is sea freight from China to the UK?

Again, the exact prices for shipping will depend on any number of factors including seasonal demand, but on average, a 40-foot container from Shanghai to London will cost around $2000. This number drops by a few hundred dollars if shipping to Southampton and increases by a few hundred if shipping from Shenzhen.
Total costs are also generally going to be lower if you are shipping a 20-foot container or if you are shipping a less than container load (LCL) order rather than a full container load (FCL), although the per-unit price of shipping will be higher.

What is the cheapest shipping method from China?

In terms of per-unit cost, full container load (FCL) container sea freight is by far the most economical method for shipping products from China. Since shipment volumes dictate the cost, importers buying large quantities from their suppliers enjoy significantly better freight rates than their smaller competitors, who are often caught deciding between LCL and air freight.
Generally speaking, the costs for various shipping methods will rank as follows: FCL sea freight (cheapest), LCL sea freight, railway freight (Chia to EU), economy air freight, and express air freight (most expensive).

 

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About the Author

Deepesh Patel is Editorial Director at Trade Finance Global (TFG). In this role, Deepesh leads efforts in developing TFG’s brand, relationships and strategic direction in key markets, including the UK, US, Singapore, Dubai and Hong Kong.

Deepesh regularly chairs and speaks at international industry events with the WTO, BCR, Excred, TXF, The Economist and Reuters, as well as industry associations including ICC, FCI, ITFA, ICISA and BAFT.

Deepesh is the host of the ‘Trade Finance Talks’ podcast and ‘Trade Finance Talks TV’. He is co-author of ‘Blockchain for Trade: A Reality Check’ with the ICC and the WTO, alongside other industry research.

In addition to his work at TFG, Deepesh is a Strategic Advisor for WOA, and works closely with ITFA. He also sits on the Fintech Working Group of the Standardised Trust.

Prior to TFG, Deepesh worked at Travelex where he was responsible for the cards business and the Travelex Money app in Europe, NAM, UK and Brazil. Deepesh is Chair of Governors and co-opted LA Governor of the Wyvern Federation, which has responsibility for 5 primary schools in South London.

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