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Freight Shipping Guide

Freight shipping can be complex. Whether you're a

shipping novice or need a refresher, this guide will
walk you through the important steps of shipping
freight and answer your most asked questions.

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This Guide Contains:

What is freight shipping?

How do I select the right mode?

How does freight travel?

What is a freight forwarder?

How do I ship freight?

What factors impact shipping rates?

What freight documentation do I need?

What is customs clearance?

Should I insure my freight?

What is Freight Shipping?

Here’s the simplest freight definition: freight

shipping—or freight transportation—is the process
of moving goods, commodities and cargo in bulk
from one point to another, almost anywhere in the
world. Freight shipping options include air, ocean,
ground and rail shipping or intermodal, which is a
combination of these modes.

Freight vs. Shipping Small Package

What’s the difference between packages and
freight? The simple difference is weight. If your
shipment is 150 pounds or less, it’s considered
small package. If your shipment is larger than 150
pounds and up to 15,000 pounds, it’s considered
freight. If you’re still not sure, consider this: if you
just have a few parcels, traditional small-package
transportation is probably just fine. But, if you have
a large shipment with a large quantity of goods, we
recommend freight transportation.

Freight shipping is ideal for a vast array of goods

and there's really no limit to what can be shipped
via freight.

How Do I Select the Right

Mode of Transportation?

With so many types of freight shipping, how do you

know which is best for your situation? And, how
fast is freight shipping? While there are other
important considerations, which we’ll discuss
shortly, your primary decision-drivers are usually
urgency and cost.

If your top concern is, “How fast can I move freight,”

air freight is likely the best place to begin. Air
freight is the fastest option, but also the most
expensive. For example, we can help get your
shipment on a Next Flight Out with delivery from ‘as
soon as possible’ to three days later.

If your top concern is, “How much does it cost to

move freight,” ocean freight is likely your best
option. While it’s the slowest option, ocean freight
is also the most budget-friendly option, an
important considerations when you’re trying to
conserve cost.

What Are the Other Key Considerations

When Shipping Freight?
Shipment Type

The size, weight and nature of your goods may also

impact the choice of shipping mode. Heavy or
oversized goods are likely best suited for ocean
freight when travelling internationally and road or
rail freight when being transported domestically.
Temperature-controlled items, such as
pharmaceuticals and medical products and
perishable items, like wine, meats or fresh fruits
likely require special packaging and handling and
are probably best moved by air freight shipments.

Carrier Reliability

Price shopping is important but choosing the

cheapest carrier may not be the most prudent
choice in the long run. Always research the
reliability of your carrier(s) before making a
decision. Supply chains can be disrupted by port
congestions and closures, labor shortages,
containers and space shortages and capacity
issues. Make sure your ocean freight carrier has
access to the equipment and space to keep the
booking promises they make. And always choose
reliable air carriers who will be able to load your
shipment on a booked flight, not a series of partial
shipments.

Safety

Ensuring the integrity and safety of your goods is

important. Know your goods—and your customer’s
expectations—and choose accordingly. Goods
traveling via ocean or rail transport are more prone
to damage or loss. Air and land transport is safest
for shipping fragile or perishable goods. As
mentioned above, always be aware of the reliability
record of your chosen carrier.

Choosing the right mode of transportation can

reduce logistics costs, mitigate delays, improve
customer experience and generally optimize your
supply chain.

How Does Freight Travel?

Freight travels by air, ocean, ground, rail or a

combination of multiple modes.

Mode Air Freight Ocean Freight

Generally, one
of fastest and
Ocean freight is
most expensive
transported by
types of freight
ship, in large
transportation.
containers. It is
Air freight is
the slowest, but
typically used
most affordable
for time-
freight option. In
sensitive goods
addition to
Definition that are high-
traditional ocean
value and
passage, water
lightweight.
carriage also
(Can be cost
includes inland
prohibitive for
and inter-coastal
low-value,
waterways, such
commodity
as rivers, canals
products or
and lakes.
goods that are
bulky or heavy.)

Advantages Shorter Less expensive

transit times mode
Better freight Tremendous
condition on cargo capacity
arrival Accommodates
Greater almost any
inventory weight or
control volume
Increased configuration
security

FCL- Full
Consolidated
Container Load
Types Commercial
LCL- Less than
Charter
container load

What is a Freight
Forwarder?

A freight forwarder is a company that specializes in

helping shippers (often called consignees) arrange
for the importing and exporting of their goods. The
freight forwarder itself does not actually move your
freight, but acts as an intermediary between you
and the various transportation carriers you can
utilize (i.e. air, ocean, road, rail and/or intermodal).

Freight forwarders have established relationships

with carriers, enabling them to recommend the best
balance of speed, cost and reliability when moving
your goods. They also handle the considerable and
sometimes complex, logistics of transporting
goods across borders. A good forwarder has
extensive knowledge of Customs documentation
requirements, country codes and regulations,
transportation costs and international banking
practices.

What are freight services they can provide:

Preparation of shipping and export documents

Booking cargo space
Negotiating freight charges
Storage and warehousing
Tracking transportation
Freight consolidation/deconsolidation
Assistance with cargo insurance

How Do I Know if I Need a

Freight Forwarder?
The complex processes, paperwork and regulations
required for international trade can be intimidating
to those unfamiliar with them. This is where a
freight forwarder can be an invaluable asset.

Regardless the size of your company or the type of

goods you ship, a good freight forwarder will be an
end-to-end provider who leads your cargo from
origin to destination. It’s their job to know the
shipping companies, documentation procedures
and customs laws of various countries.

Though a freight forwarder is not required for

importing or exporting goods, they can be
tremendously valuable to companies dealing in the
international transportation of goods. They can be
especially helpful if your in-house resources are not
as informed on international shipping procedures.

Freight forwarders typically charge modest rates

for their services, but also have access to shipping
discounts. Bottom line: choosing the right freight
forwarding provider can save you untold time,
eliminate considerable headaches and provide a
reliable transportation experience for you and your
goods.

Looking for a Forwarder That

Can Understand Your Unique
Business?
UPS Supply Chain Solutions is one of the world’s
largest providers of transportation, logistics and
freight forwarding services. But that doesn’t mean
we only keep company with companies our size. On
the contrary, the vast majority of our customers are
far from intergalactic enterprises. And each of
them — regardless of size — can take advantage of
our global expertise, brand stability and leading-
edge compliance and technology capabilities.
Whether by air, ocean, road or rail, we’ll get it there
for you.

How Do I Ship Freight?

1. Choose a Transportation Mode

Decide which transportation mode is best for your

timeline, budget and specific needs. You can get
and compare air and ocean freight quotes using the
UPS® Forwarding Hub .

2. Fill Out the Forms

Freight can’t be picked up without proper

documentation, so gather and fill out the necessary
shipping documents. Learn more about shipping
documents.

3. Pack Your Freight

Determine the best packing options and materials

to secure and protect your shipment and mitigate
damage. You can choose from a variety of
packaging materials, such as paper, foam or bubble
wrap padding, loose packing, edge boards,
corrosion protection and shrink wrapping. If you’re
shipment will be palletized, decide if you’ll use
plastic or wooden pallets. Depending on the
destination, determine if the wooden pallets need
to be heat treated.

4. Schedule a Pickup

If you’re scheduling your own pick-up, it’s a good

idea to book the pickup several days in advance of
your needed pickup date. Determine if you or your
recipient will require a liftgate, in the event either of
you don’t have a loading dock. Contact the carrier’s
local service center. If you’re using UPS, you can
schedule your pickup through the UPS® Forwarding
Hub , where you’ll also receive your cost estimate
and tracking number.

5. Your Shipment is Transported

If you have a tracking number, you can keep track

of your shipment or if available, be alerted at key
milestones or if any exceptions occur. Your
shipment is transported to the local service center.
If it’s going by air, it’s taken to a local hub or directly
to the airport. If it’s going by ocean, it’s transported
to the nearest port and loaded on an ocean vessel.

6. Clearing Customs

When your shipment arrives at the destination air

gateway or port, it is processed for Customs
clearance, which can take up to three days. If the
shipment clears Customs before 9 a.m. that day, it
can be loaded onto a truck to be driven to its final
delivery destination. Your shipment only has to
clear customs in the country of its final destination.

What Factors Impact

Freight Shipping Rates?

When all things are equal, freight prices are

determined by several factors:

Type of Cargo

The type of goods, weight and density all impact

the freight shipping class, which impacts freight
cost. So, what is freight classification? It is the
standardized shipping industry pricing
classification that establishes uniform parameters
for commerce between multiple brokers,
warehouses and carriers. Class is determined
based upon a range of factors, including: ease of
handling, value, weight, length, height, density and
liability. Put simply, the bigger the cargo, the more
room needed for transport. Regardless of
transportation mode, the size of the goods—and
the manpower needed to move it—will determine
how much you pay.

Urgency

How quickly you need your goods to be delivered

impacts both shipping mode and cost. With more
advance planning and logistics flexibility, you can
improve efficiency, optimize routes and modes and
save you money. But, in the most urgent situations,
you may need to turn to next-day or even same-day
options.

Mode of Transportation

Generally, air freight shipping is going to be the

most expensive shipping option, while ocean
freight is going to be the least expensive shipping
option. Also, look for unique intermodal freight
shipping options that might be just right when air
freight is too expensive and ocean freight is too
slow.

Distance

Generally, the greater the distance between the

original pick-up point and final destination, the
higher the shipping cost. But additional factors like
geographic location, complexity of pick-up/delivery
and fluctuating fuel costs can also be factors. An
experienced 3PL can help you develop supply chain
strategies  to help cut freight costs and maximize
your transportation budget.

Unexpected Disruptions

Unforeseen disruptions like port closings, labor and

equipment shortages, labor issues and fuel
shortages, not mention weather strikes, can all
create capacity issues and budgeting obstacles
that can increase freight rates with little notice.

Seasonality

Seasonal trends can have a significant impact on

freight costs. With more demand comes higher
cost. At times when transportation becomes a
higher priority, rates increase. To avoid seasonal
surprises and blowing your freight budget, it’s
critical to have timely and accurate business
forecasting.

What Freight
Documentation Do I
Need?

There are several key documents used in the

international shipping process. They define the
shipping transaction and provide information for
Customs and regulatory compliance. You can fill
these documents out in the UPS Forwarding Hub 

Bill of Lading (B/L) - The forwarder/NVOCC will

provide this document to the shipper.

Establishes the terms of the contract between the

shipper and the transportation company. It serves
as a document of title, a contract of carriage and a
receipt for goods.

House Air Waybill (HAWB) — A freight

forwarder’s waybill that identifies a single
shipment.
Master Air Waybill (MAWB) — An airline’s waybill
that may be used for the consolidation of several
house air waybills.
Sea Waybill - A NVOCC's waybill that acts as a
contract of carriage and a receipt of goods.
Unlike a Bill of Lading, a Sea Waybill does not
serve as a document of title.

Commercial Invoice - The shipper is responsible for

providing this document to the forwarder.

Contains information about the commercial

transaction between the shipper and
consignee/receiver, typically with these
characteristics:

Printed on company letterhead

Full details of shipper, consignee, intermediate
consignee, etc.
Reference numbers (Invoice, Purchase Order,
etc.)
Date
Description, quantity and value of goods
Original signature in blue ink
Used to determine duties and taxes
Used by exporter in processing original terms of
sale or when quoting pricing

Shipper's Letter of Instruction (SLI) - The shipper

is responsible for providing this document to the
forwarder.

A letter from the shipper instructing the shipping

company how the shipper wants the shipment
handled, typically containing:

Detailed shipper and consignee identification

Air waybill or tracking number
Service requested
Key reference numbers
Payment terms
Commercial shipment value
Insurance coverage requested
Limited export power of attorney

Electronic Export Information (EEI) - The forwarder

can provide this document if the shipper requests
it. The forwarder needs to have the shipper's POA
on file in order to act on their behalf.

Previously known as the Shipper’s Export

Declaration (SED), this filing is generally required by
the US Census Bureau for US exports containing a
single commodity with a value exceeding
US$2,500. EEI is also required for shipments of
items on the US Commerce Control List to military
end use countries. EEI information is provided to
the US Census Bureau and is used for export
compliance and governmental reporting. It provides
the following information:

Trade information
Commodity identification using the Schedule B
number
Employer Identification Number (EIN)
Signature of exporter or representative with
power of attorney
Information about export licenses that might
apply

Certificate of Origin - The shipper is responsible for

providing this document to the forwarder . The
forwarder can also prepare this document for the
shipper as long as the shipper gives the proper
information to the forwarder.

Defines the origin of the goods being shipped. It is

not required for all shipments, only those going to
specific countries that require it for Customs
clearance or when it is specifically required in the
terms of the transaction. It:

Attests to the origin of where the goods were

manufactured
Requires full details of shipper, consignee,
description, pieces, weight, markings and mode
of transport
Is stamped by the Chamber of Commerce and
signed by a notary public
May allow favorable duty rates

*Israel has its own Certificate of Origin

Hazardous Materials/ Dangerous Goods

(HAZMAT) - The shipper is responsible for
providing this document to the forwarder.

Extra documentation is required for articles or

substances that can pose a risk to health, safety,
property or the environment and are shown on the
list of dangerous goods in the Dangerous Goods
Regulations. Shipment of dangerous goods by air is
highly regulated. Specific processes and
procedures must be followed for documentation,
package marking and labeling, as well as shipment
handling

What is Customs
Clearance?

When international shipments enter the importing

country, they must be cleared by that country’s
Customs authorities before they can be delivered to
their final destination. Customs clearance is the act
of moving goods through the Customs process.

In addition, every country imposes import duties

and taxes on the goods that cross their borders.
This helps to generate income, while also
protecting their economy, their environment and
their citizens.

For those unaccustomed, this can seem like a

complex, sometimes confusing, process. But
managed properly, it doesn’t have to be
complicated. Here’s what happens when a
shipment arrives at Customs:

Customs officers examine the required paperwork

To avoid Customs holds or delays, it’s important

that all necessary forms be accurate and complete,
especially the shipping label and commercial
invoice.
Import duties and taxes are assessed

Import fees vary based on the type of goods, their

value and any unique regulations in the receiving
country. Import duties are assessed on goods that
exceed the minimum taxable threshold for
imported goods. Goods valued under that threshold
incur no import duties.

Customs requests payment for applicable duties

and taxes

If your shipment exceeds the tax threshold, the

customs officer checks to see if duties and taxes
have been paid. Additionally, certain restricted
goods may incur fees regardless of their value. The
shipper/consignee should determine in advance
how these fees will be paid.

a. Delivery Duty Paid (DDP) — This means import

duties and taxes have already been paid. When
choosing DDP, the price you paid for shipping
covers any import fees, which is reflected on the
attached shipping label. This is the best, most
recommended way to ensure a smooth customs
clearance process.
b. Delivery Duty Unpaid (DDU) — This means
import duties and taxes are not included in the
price of the shipping. In this instance, the
customs officer forwards the shipment to an
independent customs broker to collect the
required fees. These fees can become more
expensive, with additional variable charges for
brokerage, storage and possibly late payment. In
addition, the broker will contact the recipient to
collect payment, which may be surprising or
upsetting to customers.

Your shipment clears customs

Once all duties are paid and clearance is complete,

your shipment can be transported from Customs to
its final destination. With thorough attention to
detail in filling out forms and paperwork, shipments
rarely get stuck at customs.

Should I Insure my
Freight Shipment?

It’s important to understand the difference between

carrier liability coverage and cargo insurance.
Though they sound similar, there are significant
differences between the two. Understanding the
difference can help you reduce risk and lower
shipping costs.

Simply put, the main differences define what’s

covered/not covered and who’s considered at fault
when something goes wrong.

Carrier Liability

Carrier Liability is generally included in the shipping

quote from the carrier. Coverage may depend on
what you’re shipping and the carrier’s rate for that
type of goods and is often much less than the real
value of your cargo.

What’s covered/not covered? Carrier liability

does not cover concealed damage, weather, acts
of God or damage resulting from improper
packaging or loading. Read the fine print on any
carrier liability agreement.
Who’s at fault? With carrier liability, the shipper
must prove that the damage or loss is the
carrier’s fault and provide evidence of value and
loss.

Cargo Insurance

Cargo Insurance is elective coverage (meaning you

can purchase it or not) based on the actual value of
your cargo. Generally, cargo insurance fees are in
addition to the carrier’s liability. The advantage is
that you have coverage for the total value of your
goods.

What’s covered/not covered? Cargo Insurance

covers just about any type of damage for almost
any reason. Some types of cargo may not be
covered, depending on the policy. Service
guarantee failures may also not be covered.
Again, understand the fine print on your policy.
Who’s at fault? With cargo insurance, you only
have to prove that damage or loss occurred
while the goods were in the carrier’s possession.

Hoping nothing bad happens

to your cargo probably isn’t
the best risk-mitigation
strategy.
Unforeseen events can result in damage or loss to
your cargo, events that can damage both your
bottom line, your customer relationships and your
company’s reputation. Talk to us about the best
risk-mitigation strategies and Cargo Insurance
Services for what and where you ship.

Ship Freight on the

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