Tag Archives: international shipping

What is International Shipping and How Does It Work?

Expanding your customer base in an essential step when a business is growing. Many companies start on a local scene, but if the product sells well, going global is just a matter of time. International shipping lets you access thousands of potential customers and significantly extend the potential of your company.

What is international shipping?

International shipping is a process of importing and exporting goods between different countries via ocean, air, or over the road. International shipping can be complicated since it suggests many rules and policies. To successfully import or export freight, you have to know and follow specific regulations and collect paperwork so your freight passes the customs clearance.

How to ship freight internationally?

It is complex to arrange international shipping, especially if you are doing it for the first time. That’s why most businesses turn to freight forwarding companies to ship their freight. Unlike domestic shipments, international transportation is more intricate since every country has its own regulations and laws.

Some countries have stricter policies than others, and completely forbid importing certain products. For example, Canada has a list of prohibited items to import and has specific tax regulations. That’s why it’s important to thoroughly learn the regulations, or use professional freight forwarding services.

Usually, international freight shipping consists of five key parts:

    • Export Haulage. The freight is moved from its origin-destination to the next warehouse, port, or facility firm where it will depart to the border.
    • Export Customs Clearance. When the freight reaches the border of the exporting country, it passes the process of clearance before moving to the next stage.
    • Transportation. After your load has successfully left the origin country, the process of transportation begins.
    • Import Customs Clearance. When the freight reaches the border of the importing country, it passes the process of clearance. This is the most important part of the shipping process since you ensure your freight has met the compliance.
    • Import Haulage. After successfully clearing the importer country’s border, your freight is moved from the border to its final destination.

Important things to know before shipping international freight

Collecting information

Gathering all the shipment information and presenting it in the required form is crucial for completing international freight shipping. Filling in the documentation and providing required paperwork can be challenging, and a single error can result in a failure.

Customs clearance

Customs clearing process is a critical stage of international shipping. To complete it successfully, you will need a customs broker. These professionals have expertise in arranging and executing international freight movement. So, you can rely on them to gather paperwork, and execute the customs clearance process properly. If you use a freight forwarding company, they will most likely recommend a customs broker or even provide one.

Tracking the result

After the most important part of the process is completed, you should only track your shipment to make sure it reaches its final location.

International shipping with PLS Logistics

PLS Logistics has relationships with 45,000 carriers throughout North America. Combined with our freight brokerage services, we can arrange international shipping through truck, rail, ocean or air.

Need to ship abroad? Get Freight Quote right now!

Recent History: International Trade and US Transportation

Advances in transportation and telecommunications technology have contributed to the growth of international trade. The United States imports and exports more merchandise than any other country making it the world’s largest trading nation. The US trades with nearly 200 countries worldwide. Trade encourages economic efficiency by providing an assortment of goods at lower, competitive costs. US transportation

Our nation’s freight transportation system has shaped and been shaped by the increase and change of demands of international trade. The expansion in trade has been accompanied by changes in security, economies and freight modes.

The North American Free Trade Agreement (NAFTA) reduced trade barriers among the United States, Mexico, and Canada. Trade among the 3 countries soared between 1994 and 2001 and the value of US-NAFTA trade increased by 79%, growing at an average annual rate of 9%. Nearly 2/3 of the value of overall US-NAFTA merchandise trade in 2001 was moved by trucks.

The terrorist attacks of September 11th reduced economic activity and there was a shift in focus on the vulnerability of the US transportation system. All modes were affected by 9/11, but air cargo saw the largest decline in freight activity, followed by truck, maritime and rail. There were significant security measures taken at all borders and ports which increased the costs of trade. Canada, for example, saw disruption and decline in trade volumes during 2001 and 2002. In 2001, the US transportation system carried merchandise exports worth $731 billion and merchandise imports valued at $1.1 trillion. More than 1.6 billion tons of intermodal merchandise moved to and from the US in 2001, accounting for 10% of the 16 billion tons of freight moved on the nation’s transport system. In 2001, the top US seaport for international merchandise trade by weight was Houston, handling over 130 million short tons of commodities.

logistics-industry-professional.jpgIn 2011, a decade after the 9/11 attacks, the volume of US exports is 40% higher and imports are 27% higher. Today, shippers have concerns about macroeconomic trends at a global level. The World Trade Organization’s global volume forecast represents a rise from 2.8% in 2015 to 4% in 2016. The long-term outlook for the industry is positive. US imports represent 12.3% of global imports. North American trade partners supplied 26% of import sales to the US. America exported $122.8 billion of goods in July 2016, $2.9 billion more than June exports. The US imported $182.1 billion of goods in July 2016, over $2 billion less than June imports.

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Source | Bureau of Transportation Statistics, US DOT

How Cross Border Shipping Can Benefit You

Cross border shipping requires knowledge, flexibility, and security. In North America, many companies have expanded or plan to expand their business operations throughout the continent. With cross border operations, there is an opportunity to reach new markets and increase profitability. According to the US Census, Canada is America’s largest trading partner and Mexico is America’s 3rd largest trading partner. cross border shipping

When shipping from the US to Mexico, by law, carriers in the US are required to carry cargo insurance, but Mexican carriers do not have the same requirement. US carriers must pick-up and deliver on US soil and Mexican carriers must pick-up and deliver on Mexican soil. Mexican and US carriers are allowed to haul freight within approximately 26 km on either side of the border.

What do you need for cross border shipping?

  • Capacity: Because of an imbalance of trade between countries, there is a capacity shortage.
  • Security: Cargo security can be a concern in over-the-road transport. Mexico is among the three countries most at risk for cargo theft. Attention to paperwork and knowledge of procedure is extremely important.
  • Collaboration: Partnerships between shippers and 3PLs help shippers overcome challenges with technology, capacity, and knowledge.
  • Flexibility: Supply chain disruptions affect cross border shipping. Work with a 3PL that supplies visibility and risk mitigation plans.
  • Consolidation: Strategically ship freight based on shipper and receiver needs.

What are the benefits of global shipping?

  • Lower freight charges
  • Eliminated demurrage
  • Delivery and receipt of freight
  • Reduced inventory costs

Shipping freight across national borders is complex. Shippers must develop an efficient strategy that will increase trade volume without sacrificing shipping costs or flexibility. There are 2 methods of cross border truckload transportation — transloading and direct service. Customs requirements for the US and Mexico are the same for transloading and direct service shipping. A broker from both US Customs and Mexico Customs must be involved in either the transportation process.

Transloading

When you transport freight from one trailer or container to another trailer or container at a warehouse or terminal before crossing the international border. It then moves to its final destination across the border.

Direct Service

When freight crosses another country’s border on the same trailer or container from origin to destination.

If shipping out-of-country seems intimidating, enlist the help of a third party logistics provider. Outsourcing cross border transportation services is a cost-effective way to find new customers and grow your business. And, with the help of a 3PL, you have a knowledgeable resource to help overcome cross border shipping challenges like language, customs requirements, and labor laws.

Have you benefited from cross border shipping? Leave us a comment below.

Continue Reading: Is a Non-Asset Based 3PL Right for Your Company?