It might seem simple, especially if you’re already successful locally, but selling internationally comes with its own set of challenges. You’ll need to deal with additional regulations and face intense competition from established sellers in those regions. To help you succeed globally, this guide covers everything you need to know about selling internationally on Amazon. Let’s dive right in.

Which Marketplaces Can You Sell On?

As of 2024, you can sell to 21 international marketplaces. This includes:

• United States (Amazon.com)
• United Kingdom (Amazon.co.uk)
• Mexico (Amazon.com.mx)
• Canada (Amazon.ca)
• Spain (Amazon.es)
• Brazil (Amazon.com.br)
• Italy (Amazon.it)
• France (Amazon.fr)
• Germany (Amazon.de)
• Singapore (Amazon.sg)
• India (Amazon.in)
• Japan (Amazon.co.jp)
• United Arab Emirates (Amazon.ae)
• Saudi Arabia (Amazon.sa)
• Turkey (Amazon.com.tr)
• Australia (Amazon.com.au)
• Netherlands (Amazon.nl)
• Belgium (Amazon.com.be)
• Poland (Amazon.pl)
• Sweden (Amazon.se)
• Egypt (Amazon.eg)

Which Marketplace Should You Select?

Before you choose a marketplace, there are a few things to think about.

First, think about how much traffic the marketplace gets. As of 2024, the top marketplaces by number of monthly visitors are the USA with 3 billion, Germany with over 605 million, the UK with over 569 million, and Canada with 231 million.

Second, consider the different tax regulations and whether you can sell your products in the chosen country. Some countries have more extensive rules, so make sure you’re knowledgeable and prepared to comply.

Third, check the average income in the countries you want to sell in. This is measured by something called GDP PPP per capita. Generally, higher income means more online spending.

How to Sell Internationally on Amazon

Selling your products internationally is a good idea if you already have an established and successful product in one marketplace. But before you go global, make sure to do your research to confirm there’s also demand for your product in the new market.

Once you’ve confirmed demand, your next step is to find a reliable freight forwarding company. Look for one that has experience in shipping products specifically to Amazon’s fulfillment centers, as they have unique requirements for labeling, packaging, and appointment scheduling. Failing to comply could result in your products being rejected and sent back, with you bearing the full cost. 

Once you’ve handled this, it’s time to enroll in either NARF or Amazon’s Global Selling Program:

• NARF: If you’re operating your Amazon business in the US and want to expand into Mexico and Canada, NARF is a great option. This program allows you to sell in these markets while keeping your products in US fulfillment centers. When customers from these countries place an order for your product, Amazon will handle the cross-border shipping for you.

With NARF, you’ll also automatically get access to a tool called BIL (Build International Listings), which duplicates your US product listings onto Amazon Canada, and Mexico without you having to do anything.

To qualify, you need to have a Professional Selling account and a North American Unified Account, which you can set up by going to the “Upgrade to a Unified Account” page in Seller Central.

Selling in your local market is usually easier than selling overseas. If you’re new to a foreign market, here are some helpful tips to ensure success:

1) Be Aware of Each Country’s Regulations

When selling internationally, the first step is to understand the regulations of the country you’re targeting. In the EU or UK, for instance, there’s a long list of legal requirements you must meet. Here are a few examples:

• Register for VAT: VAT (Value Added Tax) is a mandatory tax on goods and services in the EU and UK. Registration procedures vary, but generally, you’ll need to fill out a form and provide necessary documents like business proof, ID, and financial records.
• Apply for an EORI Number: An EORI (Economic Operators Registration and Identification) number is essential for customs declarations. Before applying, check if your company already has one, especially if you’re VAT-registered. If not, you’ll need to provide detailed company information to the customs authority where you plan to import goods into.
• Ensure EPR Compliance: If you’re planning to sell in Germany or France, you’ll need to obtain an EPR (Extended Producer Responsibility) number from the appropriate PRO (Producer Responsibility Organization) to prove that your products, including packaging, are sustainable and recyclable. Common EPR categories cover products like batteries, electrical and electronic equipment, and furniture. Without this number, Amazon will suppress your listings.
• Get a WEEE Number: If your products are covered by the Waste Electrical and Electronic Equipment (WEEE) Directive, you’ll need a WEEE number to show your commitment to correctly handling and recycling electrical and electronic waste. To obtain this number, check if your products are covered under the directive and contact the appropriate authorities in the EU country where you plan to sell.

If you want to sell to other international marketplaces besides the EU and UK, you’ll need to comply with additional regulations specific to each country.

2) Use BIL to Duplicate Your Listings

If you have a Unified Account or Linked Accounts, BIL can be an extremely helpful tool to use. It helps duplicate your current listings onto the marketplace where you plan to sell. All you need to do is link the source market (i.e., where you’re currently selling) to the target market (i.e., where you want to sell).

Here’s how to set it up:

Step 1: Go to Amazon Seller Account > Inventory > Build International Listings > Get Started.

Step 2: Choose your source market or primary market.

Step 3: Select your target marketplaces.

Step 4: Select your pricing rules. You can choose from four different options:

• Same price as source marketplace
• Percent above source marketplace
• Percent below source marketplace
• Fixed amount above source marketplace

Step 5: Wait for Amazon to process your request. This can take up to 4 hours. You’ll receive an email once it’s done.

3) Translate and Adjust Your Listings

If you’re selling to a country where English is the primary language, find out if they use British or American English and adjust your copy accordingly. Also, use the vocabulary that locals are familiar with, especially if you’re selling products that may have different names in your target market. For instance, if you own a clothing brand in the US and want to enter the Australian market, instead of using American terms like “sweaters” or “pants”, use the Australian equivalents which are “jumpers” and “trousers”.

If you’re entering a market where English isn’t the main language, you’ll need to translate your listings to the local language there. While online AI tools can be helpful, it’s better to hire a professional translator to ensure your copy makes sense and includes the keywords you need in the target language.

4) Hire a Full-Service Amazon Agency

If the thought of going global is stressing you out, you can always consider hiring a full service Amazon agency like Enso Brands. With Enso Brands, you’ll have access to a team of experts who will guide you every step of the way. We’ll help duplicate your listings using BIL and choose the right program, whether that’s NARF or Amazon’s Global Selling Program. We’ll also optimize your listings for search visibility to boost sales internationally. Plus, we’ll keep an eye on your entire catalog to ensure it’s performing its best and make changes as needed to stay ahead of the competition.

Summary

Expanding your business internationally with Amazon Global Logistics is a great way to reach new customers across the world. To ensure success, make sure to choose the right international marketplace based on customer traffic and GDP per capita in that area. Also, consider using tools like NARF and BIL to easily manage your listings across different countries, and make sure you comply with each country’s regulations before you start selling there. Lastly, if you’re selling in a country where customers speak a different language other than English, make sure your product listings are in that language. This might mean hiring someone to translate them for you or using AI tools. If all of this seems overwhelming, you can always hire a full-service Amazon agency like Enso Brands.

The post Amazon Global Selling: An Advanced Guide for FBA Sellers on Selling Internationally appeared first on Unicargo.

If you’re constantly shipping goods far and wide, you know the struggle of keeping costs down due to complex logistics. Companies are always racing to stay ahead in this competitive arena, but it often comes with a hefty price tag. However, freight consolidation is the key here, offering a solution to this costly challenge.

In fact, container shipping has seen a continuous trend of consolidation and increased competition over the years. From 1996 to 2022, the top 20 carriers’ share of container capacity skyrocketed from 48% to 91%, and this was to cope with too much capacity.

In this post, we’ll cover what consolidation is, how it works, its benefits, and challenges, and why freight forwarders are important in managing it. Stick around if you want to know how it all works!

The Importance of Freight Consolidation: Key Takeaways

• Freight consolidation involves combining multiple small shipments into one large one, similar to carpooling for cargo.
• Consolidation can be done through LCL or LTL approaches, pool distribution, cross-docking, hub-and-spoke distribution, co-loading, or multimodal transportation.
• Benefits of freight consolidation include cost savings, increased supply chain efficiency, better inventory management, reliability, operational flexibility, competitive advantage, and environmental sustainability.
• There are also challenges to freight consolidation. They include finding a good carrier, organizing logistics, risk of damage, balancing time vs. cost, tracking and customs issues, and liability concerns.
• To overcome consolidation challenges, businesses often work with freight forwarders who offer carrier connections, logistics expertise, and Less than Truckload (LTL) & Less than Container Load (LCL) shipments.
• Freight forwarders provide cost reduction, time-saving, tracking transparency, liability management, and additional benefits like storage solutions and customs navigation.

How Freight Consolidation Works?

Freight consolidation is when you pack together several small shipments going to the same place into one big one. Companies team up to use one container or truck for shipping, cutting costs and improving supply chain efficiency.

It’s exactly like carpooling for cargo. The consolidated cargo is sent to a central center for sorting. At the destination, it’s separated and delivered as needed. There are many approaches to freight consolidation:

1)   Less than Container Load (LCL)

LCL is for ocean shipping with containers. If your shipment can’t fill a whole container, it joins others heading to similar places. It’s a smart move for smaller shipments that don’t need a whole container to themselves and saves cash by splitting container space.

2)   Less than Truckload (LTL)

LTL is for land shipping by trucks. If your shipment isn’t big enough to fill a whole truck, it shares space with other shipments headed in the same direction. It’s a budget-friendly choice for smaller shipments, usually weighing between 150 and 10,000 pounds.

3)   Pool Distribution

Pool distribution involves gathering all goods meant for the same area at one spot before sending them out to their respective destinations. It’s used in retail to save money on handling and shipping, get things delivered faster, and prevent damage by minimizing how many times cargo is moved around.

4)   Cross-Docking

In cross-docking cargo comes in, gets quickly sorted, and then immediately loaded onto outgoing trucks without being in storage for too long. This saves money on warehousing, gets deliveries out faster, and keeps the whole supply chain running like a well-oiled machine.

5)   Hub-and-Spoke Distribution

The hub and spoke distribution consists of a main hub that gathers and organizes goods before they head out to different places through smaller channels.

It’s a popular method for air and parcel shipping, but it works for trucks and trains too. This model cuts down on transportation expenses and makes routes more efficient, and deliveries more reliable since everything gets sorted and handled in one central spot.

6)   Co-Loading

Co-loading is like LTL consolidation but involves combining shipments that might not fit together well or need different handling. It’s basically shippers teaming up, splitting transportation costs, and saving a bunch, especially for shipments with specific requirements.

7)   Multimodal Transportation

The multimodal transportation approach includes combining different ways of transporting cargo, like using trains, ships, and trucks all in one shipment. They gather the freight at spots where they switch modes to make it cheaper and smoother. This lets you pick the best routes and modes, saves money, especially for long hauls, and helps the environment by using more efficient transportation methods.

What Is an Example of Freight Consolidation?

Let’s take an example of ABC Widgets, a US importer from Chicago, that buys widgets from various Chinese suppliers. As their shipments aren’t big enough for a full container, they use a freight forwarder offering several consolidation services options. This is where the magic happens. An experienced freight forwarder within their niche knows where and how to save on freight volume when packaging and how to load it efficiently as LCL or Consul. 

The forwarder picks up individual shipments, consolidates them properly, and ships a single container to a US port (e.g., Los Angeles or New York). Customs clearance is handled, and upon arrival, the container is trucked to ABC Widgets’ Chicago warehouse, or, if ABC Widgets is an Amazon FBA Seller, the goods will go into a temporary warehouse for relabeling, ticketing, and other requirements, and thereof trucked to the final destination- one of Amazon’s warehousing facilities Luckily, Unicargo is a specialized freight forwarder for e-commerce business owners and Amazon FBA sellers and can handle this task with its self-owned multimodel logistics operations – flexible freight, global warehousing, and domestic trucking in the U.S.

But how do importers like ABC widgets benefit from all of this process? They save money by splitting shipments, reducing overall costs, and increasing efficiency by faster delivery times.

7 Benefits of Freight Consolidation

Here are some benefits of freight consolidation in detail.

1)   It Saves Costs

By sharing container or truck space, companies save money by not paying for unused space and getting discounts on bulk shipping rates. They get the benefit of a full truckload at a less-than-truckload shipping price.

This is especially helpful for small and medium-sized businesses with fewer pallets or frequent small shipments. Suppose an online store bundles packages for a certain area instead of shipping each order separately.

This way, they get cheaper shipping rates per item and can cut warehousing costs since they need less space to store goods before shipping. In addition, freight consolidation also saves on handling expenses, like loading and preparing goods, by reducing the number of shipments to handle.

This also means fewer documents to handle, which cuts down on errors and saves time and money. Rather than juggling lots of shipments and paperwork, one person can handle a consolidated shipment, freeing up others to get more work done.

A study suggests that cargo could be consolidated using just 67% of the current number of trucks, leading to a 23% reduction in operational costs.

2)   It Increases the Efficiency of a Supply Chain

If issues arise in shipping, it’s up to your provider to fix them, which means you won’t have control over your cargo. However, freight consolidation offers better control over due dates and production schedules. This ensures you’re notified promptly if anything goes awry, avoiding misdirection of shipments.

Freight consolidation also speeds up delivery times by sending shipments directly to their destinations without multiple stops. It allows for quality control measures at nearby warehouses, minimizing delays and maintaining order quality.

You can manage the entire distribution chain yourself or through a logistics partner like Unicargo. By tapping into our knowledge and experience you can improve your shipping, keep customers satisfied, and grow your business sustainably.

Furthermore, it boosts operational efficiency because logistics teams only have to handle one large shipment. By combining shipments, routes and schedules can be optimized, cutting travel time and lowering the chance of delays.

For example, a company like Unicargo can deliver goods to various spots in a region by consolidating shipments and planning a single route covering all locations. This saves time and reduces the risk of delays due to traffic or other issues.

We swiftly transfer cargo between different transportation modes without needing storage in between. Our service ensures freight is received and sent out within 1-2 days, emphasizing flexibility and agility.

With multiple strategically located facilities, we offer tailored transloading options to suit diverse needs. Keep your supply chain efficient and costs low with Unicargo’s transloading services – ideal for splitting shipments or adjusting delivery routes on the fly.

3)   It Leads to Better Inventory Management

If you struggle to deliver products on time or meet demand, it can hurt customer relationships, despite their love for your products. Consolidation can save you here. It improves supply chain visibility, making it easier to track goods from warehouse to delivery and manage inventory levels to avoid overstocking or stockouts. Pre-sending inventory to the consolidation facility can be of great help.

When orders come in, your partner can ship directly from there, eliminating the need for pickups from your end. This keeps you ahead of demand and attentive to customer needs.

With regular, consolidated shipments, e-commerce business owners, and importers/exporters can maintain less inventory on hand, cutting storage and management costs. By reducing excess inventory and improving control, consolidation saves costs and boosts cash flow.

Let’s assume an exporter exporting cozy blankets sources them from a manufacturer with a 30-day lead time. This covers manufacturing, packaging, shipping, customs, and domestic transit to warehouses at the destination point.

The exporter practices freight consolidation, combining multiple blanket orders into one shipment to cut costs and transit times. To determine when to reorder, they also factor in lead time, sales speed, and safety stock.

Exporting 100 blankets monthly with a 30-day lead time, they aim to restock before running out, typically when inventory hits 50 blankets. Here, freight consolidation ensures timely replenishment without unnecessary inventory buildup.

4)   It Makes a Business Ecosystem More Reliable

Freight consolidation reduces the chances of errors and delays that can happen when handling many shipments separately. This means more reliable deliveries and happier customers. With fewer shipments to manage, there’s less risk of delays or losses, ensuring goods arrive on time.

Besides, consolidation often leads to scheduled, predictable deliveries, boosting customer satisfaction. When customers can count on timely and consistent deliveries, they’re more likely to be happy with service.

This is because consistency reduces the likelihood of late deliveries, missing items, or misdirected shipments, streamlining your shipping process. Moreover, once you understand your customers’ ordering habits, you can incorporate them into your consolidation strategy.

This ensures you have stock available when needed, avoiding last-minute rushes. Maintaining a regular shipping schedule through freight consolidation also rules out the uncertainty associated with relevant overheads.

Take an online electronics seller who combines shipments from different suppliers into a single large one. This helps them secure a constant flow of diverse electronics. Even if one supplier’s shipment is late, they still get products from others, keeping their product range wide for customers.

5)   It Provides More Operational Flexibility and Adaptability

Freight consolidation gives businesses the ability to respond swiftly to changes in demand or market conditions. Unlike handling multiple smaller shipments, which can be logistically challenging, consolidation allows for quick adjustments in shipment sizes and frequencies.

For instance, businesses can opt for larger, less frequent shipments during slow periods and smaller, more frequent ones during busy times. This flexibility helps optimize logistics and cut costs. It also helps businesses adapt to seasonal fluctuations, like managing holiday demand.

By consolidating shipments, retailers ensure enough stock without compromising efficiency or facing high shipping expenses. For example, toy makers deal with big ups and downs in demand, especially during holidays when everyone wants their products.

By using freight consolidation, they can handle this surge in demand smoothly. They can group shipments from suppliers to ramp up production and make sure retailers have enough stock for the holiday rush. This way, they can meet higher demand without losing efficiency or spending too much on shipping.

6)   It Can Give a Business an Edge on Competitors

Freight consolidation streamlines logistics, making operations more efficient and effective. Cutting down on shipments can reduce costs and speed up delivery times, giving a company an edge over competitors dealing with higher costs and slower deliveries.

This can set a company apart if competitors can’t offer similarly affordable shipping. Moreover, fewer shipments mean less chance of delays or losses, boosting reliability. Reliable deliveries can lead to happier customers and a stronger market position, giving a significant competitive advantage.

Suppose you’re a US-based importer bringing in goods regularly but not in full container loads. Here Unicargo can help you. They can handle the entire process, offering freight services, temporary warehousing in strategic spots, and truck freight to your final destination within the US. Moreover, everything is streamlined under one roof, and you also get a dedicated account manager to address all your questions for every step of the journey.

With Unicargo’s efficient PO management, you can also gain a competitive advantage, speeding up lead times with timely approvals and accurate orders. Our tailored solutions and real-time tracking ensure seamless supply chain operations, while advanced automation reduces errors and delays, positively impacting your bottom line.

7)   It Can Help Businesses Reach Environmental Sustainability Goals

By consolidating freight, you need fewer trucks to move the same amount of goods, cutting down on carbon emissions since fewer vehicles mean less fuel burned. For instance, instead of five trucks each carrying a small load, combining those loads onto one truck would significantly reduce emissions.

This can boost customer loyalty and appeal to today’s eco-conscious market. A study on freight consolidation and truck sharing revealed that smart consolidation tactics could cut monetary emission costs (MEC) by about 17%.

By pinpointing the best routes and using fewer trucks for deliveries, the Emission Quantification model showed big drops in greenhouse gases like CO2, NOx, and particulate matter. This emission reduction is a major perk of efficient freight consolidation, making transportation greener and more sustainable.

What Challenges Can You Face with Consolidated Shipping?

Freight consolidation has its perks, but it’s not all smooth sailing. Doing it solo can be tough, especially for businesses new to logistics complications. Here are some challenges that you can face with consolidated shipping.

1. Finding a Good Forwarder – It’s tough to pick the right logistics partner from so many options. You must compare rates, services, and their track record with consolidated shipments. If you choose wrongly, it could mean delays, damage, and higher costs.

2. Organizing Logistics – Consolidation needs serious planning. Coordinating pickups, ensuring proper packing, and tracking shipments across different stages take a dedicated team and good systems. Unicargo’s global teams and operations offer business owners and importers/exporters an All–in–One solution for this.

It also involves coordinating with multiple parties, managing schedules, and ensuring proper packaging, especially for businesses with complex supply chains. One slip-up can mess up your whole supply chain.

3. Risk of Damage – There’s also an increased risk of damage or loss during consolidation and deconsolidation due to multiple handling. However, at Unicargo our cargo insurance services ensure your valuable items are covered against any unexpected mishaps.

So your business can keep on rolling without a hitch. We know every business is different, so we tailor our policies to fit your needs and budget perfectly. Besides, we handle all claims for you, so you don’t need to fill out any forms. We take care of everything until you get your rebate or compensation.

4. Time vs. Cost Juggle – Saving money while delivering on time is tricky. Consolidation cuts costs, but all planning and potential delays can slow down deliveries.

This is because consolidating shipments can be time-consuming, requiring gathering goods from various sources and coordinating with carriers. Delays may also occur as shipments wait for containers to fill up, potentially prolonging transit times.

5. Tracking & Customs Troubles – Keeping tabs on multiple shipments within one can be tricky. Relying only on carrier updates might leave you in the dark about where individual packages are, making it hard to handle customer questions or spot issues early.

Single customs clearance for consolidated shipments can be also challenging if not all goods have the correct documentation.

6. Sorting Out Liability – When things go south, who’s to blame? Damage, loss, or delays in a consolidated shipment can lead to a blame game between you, suppliers, and the carrier.

Sorting out who’s responsible and getting compensation can be a long and pricey process. Therefore, many businesses choose to work with freight forwarders or third-party logistics providers to effectively manage consolidated shipping.

Who Can Do Freight Consolidation for You?

While the benefits of freight consolidation are clear, tackling logistics can be overwhelming, especially for inexperienced businesses. This is where teaming up with a seasoned freight forwarder is helpful.

Here’s why:

1. Carrier Connections – Instead of hunting for carriers, freight forwarders use their network to find the best match for your needs. They negotiate favorable rates with carriers, leveraging their volume of freight to lower transport costs.
2. Logistics Expertise – They handle everything from pick-ups to customs, ensuring smooth operations.
3. LTL & LCL Shipments – Freight forwarders create LCL & LTL shipments by combining multiple shipments into larger ones, benefiting companies with large volumes of similar products.
4. Reducing Costs – By consolidating freight and combining small package shipments, they help reduce shipping costs for businesses.
5. Time Saver – They handle all interactions with carriers, saving businesses time and effort. Letting them handle logistics also frees up your team to focus on growth.
6. Tracking Transparency – Their tracking systems keep you informed about your shipment’s whereabouts.
7. Liability Management – They deal with issues and claims, so you don’t have to worry.
8. Added Benefits – They offer storage & warehousing solutions, can navigate customs regulations, provide cargo protection, and analyze shipping patterns to cut costs.

FAQs – Freight Consolidation

What is LTL Consolidation?

LTL consolidation involves combining multiple LTL shipments in a specific area into Full Truckload (FTL) shipments. For the final leg of journey to destination, shipments are switched back to LTL.

What Is Freight Consolidation Cost?

Freight consolidation costs can fluctuate depending on factors like shipment volume, distance, and chosen service provider. Overall, it’s considered a cost-effective tactic as it lets shippers access full truckload rates for less-than-truckload volumes.

What Are the Disadvantages of Freight Consolidation?

The disadvantages of freight consolidation include longer transit times as shipments wait for containers to fill up, although this is something that changes dynamically and, on many occasions, there is no delay. Planning consolidated shipments also takes more time and offers less control over schedules. Moreover, Fragile, perishable, or hazardous cargo may not be ideal for consolidated shipping.

Conclusion

Freight consolidation offers numerous benefits such as cost savings, enhanced efficiency, and environmental sustainability. However, it also presents challenges like finding suitable logistics partners and managing logistical complexities.

To overcome these obstacles, businesses often rely on freight forwarders, who provide expertise and solutions to streamline the consolidation process. By leveraging their services, companies can optimize their shipping operations, reduce costs, and improve overall supply chain performance.

At Unicargo, we provide comprehensive shipping services and solutions, tailored to importers, manufacturers, wholesalers, and e-commerce businesses. Our vast experience and deep expertise along with a close collaboration approach ensure timely receipt, shipment, and proper handling of products.

We offer inventory management solutions for efficient stock tracking and control, empowering informed supply chain decisions across single or multi-warehouse setups. With our custom centralized inventory system, you gain clear visibility into order metrics, movements, and placements.

Whether consolidating smaller shipments or breaking up larger ones, our expertise and technology streamline the process. Benefit from cost-effective shipping solutions through our in-house domestic freight brokerage and extensive warehousing and transportation network.

We optimize routes using various methods like LTL, expedited shipping, FTL, LTL shipments, and Last-mile delivery.

Contact Us now for reliable and efficient freight consolidation services.

The post What Is Freight Consolidation and How It Can Benefit Your Business? appeared first on Unicargo.

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However, there’s a savior for this mess: cargo or freight insurance. But what is the purpose of freight insurance, and is cargo insurance worth it?

In this post, we’ll answer these questions, discussing the role and importance of freight insurance for businesses and sharing tips for obtaining & optimizing it. Plus, we’ll guide you through the process of filing a claim. So, let’s jump right in!

The Importance of Cargo Insurance: Key Takeaways

• Cargo insurance protects against the loss of goods during shipment by covering various risks during air, sea, or land transport.
• Different policy types exist, including all-risk coverage, open coverage, total loss only, and more.
• Cargo insurance has exclusions like an inherent vice, improper packaging, and contraband.
• Cargo insurance is essential for businesses to safeguard against transportation risks, theft, natural disasters, regulatory compliance, supply chain disruptions, and geopolitical situations.
• Cargo insurance enhances financial protection, ensures compliance with trade regulations, and boosts a company’s credibility.
• When obtaining cargo insurance, businesses should consider factors like the type of cargo, transportation mode, cargo value, destination, route, and transit duration.
• When dealing with cargo insurance claims, understand your policy, document thoroughly, choose reliable partners, and act promptly.
• In the event of a claim, notify your carrier immediately, gather evidence, inform your insurer, and engage in negotiations for fair compensation.
• Regular assessments, risk management strategies, and strong partnerships with logistics partners help optimize cargo insurance coverage.

Understanding Cargo Insurance

Cargo insurance is a deal between you and the insurance company to protect your goods while shipping. And what does cargo coverage cover? It covers shipments of all sizes, whether on pallets, in containers, or as bulk cargo, or going by air, sea, or road.

Unlike marine insurance, which is mainly for sea transport, cargo insurance combines risks from different shipments to spread the cost of losses.

But what does cargo insurance do, exactly?

You pay a premium to the insurance company, and in return, they compensate you if something happens to your cargo, like natural disasters, accidents, or piracy.

Cargo insurance isn’t one-size-fits-all like carrier liability. It can be tailored for specific trips or set up to cover all your company’s shipments for a certain period. This flexibility is unique compared to other types of insurance.

Besides, if you ever need to make a claim, having cargo insurance can speed up the process because you typically declare the value of your goods before shipping, making it easier to determine the compensation you should receive.

Types of Cargo Insurance Policies

Cargo insurance comes in two primary flavors: one for land and another for marine (which also includes air cargo). Each type has its own set of coverage and protection rules tailored to what the owner or shipper needs based on the risks involved. Here are some common types of cargo insurance policies:

• All Risk Coverage – This insurance provides the most extensive protection, covering all types of physical loss or damage from external causes. It’s ideal for valuable, delicate, or perishable items, safeguarding against accidents, natural disasters, mishandling, piracy, and improper storage.
• Open Cover – An open cover cargo policy is when the insurer covers multiple cargo shipments. There are two types: renewable and permanent/non-renewable. Renewable policies need renewal after a set period, often for single consignments. Whereas permanent/non-renewable policies cover numerous shipments over a longer duration without renewal.
• Total Loss Only – This policy kicks in when the entire shipment is lost. It’s chosen when the risk of partial damage is low, or the cost of such damage is insignificant.
• Named/Specific Perils – This policy covers damage or loss caused by listed perils like fire, theft, or collision. While less comprehensive than All Risk coverage, it can be customized for specific cargo-related risks.
• Contingent – Contingent cargo insurance acts as a contingency plan for shippers. It is designed for complex claims between shippers and carriers. This type of insurance plan kicks in when standard cargo insurance falls short, ensuring you’re covered when you need it most..
• Land Cargo Insurance – Covers cargo moved by land, including trucks and utility vehicles, protecting against theft, collision damages, and other risks in land freight.
• Marine Cargo Insurance – Protects goods transported by sea and can extend to cover air transportation.
• Air Cargo Insurance – Covers goods transported by air, ensuring protection during air transit.

What Cargo Insurance Doesn’t Cover— Common Exclusions and Limitations

Though cargo insurance is vital for protecting goods in transit, there are specific exclusions and limitations to what it covers. However, the coverage details can vary significantly among insurance companies and specific policies. Here, we have mentioned some scenarios that cargo insurance usually doesn’t cover:

• Inherent Vice – This is when goods in transit are damaged due to foreseeable issues from the nature of the products, like unstable chemicals causing explosions.
• Latent Defect – This term refers to unnoticed problems in a product, such as cracks from improper manufacturing that aren’t easily seen upon inspection.
• Improper Packaging – If cargo isn’t securely packed, like using loosely built crates, resulting damage may not be covered by insurance.
• Willful Misconduct by Assured – Cargo insurance excludes damages caused by intentional misconduct, like importing damaged products to make a claim.
• Unexplained Loss or Shortage – Excludes losses occurring due to a vehicle owned, leased, or operated by the insured party. This is because insurance companies assume the insured party will take necessary precautions to avoid theft or damage when the cargo is under their control.
• Limitations – Pharmaceuticals, tobacco, alcohol, and live animals are typically not covered by cargo insurance. This is because pharmaceuticals are sensitive to storage conditions, and tobacco and alcohol face complex regulations. While transporting live animals involves unpredictable risks that are hard to mitigate.

• Cargo in Custody of Another Carrier – Excludes coverage when the shipment is in the custody of another carrier. If damage or loss happens while the load is in their care, the responsibility typically falls on the carrier’s insurance handling it, not on the initial cargo insurance policy.
• Storage Over 72 Hours – Cargo stored for more than 72 hours may not be covered. This exclusion is because cargo insurance mainly protects goods during transit. The risks during extended storage are distinct from those during transportation.
• Loss Due to Delay – Cargo insurance is set up to handle physical damage or loss like fires, accidents, or theft. However, it doesn’t cover losses due to delayed products and revenue loss.
• Damage Due to Negligence – Any damage from crew or labor negligence is typically not covered. This exclusion exists because cargo insurance is meant for unexpected and accidental events. Crew or labor negligence is seen as avoidable, not something unforeseen.
• Insolvency of the Cargo Company – Cargo insurance usually doesn’t cover losses due to the cargo company’s bankruptcy.

6 Reasons Why You Must Get Cargo Insurance

The rapid growth of e-commerce has increased global shipping. This uptick in cargo volume has naturally heightened the need for cargo insurance since more goods in transit pose a greater risk of loss or damage.

In 2022, the global cargo insurance market hit $71.4 billion and is expected to climb to $106 billion by 2032. That’s a growth rate of 4.1% from 2023 to 2032.

Source: (alliedmarketresearch.com)

This increase is attributed to the surge in the e-commerce sector, which in turn is expanding international trade and logistics. The diversification of logistics operations in the e-commerce sector also brings new risks, necessitating more comprehensive cargo insurance policies.

Thus, safeguarding cargo from natural disasters, accidents, delays, and damages during transportation and last-mile delivery has become crucial. However, the question of “Is freight insurance worth it?” remains.

Let’s break it down with a little example:

Suppose you’re shipping $200,000 worth of goods, and things go sideways. No insurance and a 10% profit margin mean you need $2 million in sales to recover. But reality check – it’s not that simple. Seasons change, demand dips and your company takes a financial hit.

Now, enter cargo insurance. For a few hundred dollars (a fraction of the landed cost), fund a new purchase order. Opt for Retail Value coverage, pay a bit more, and get back on track, recovering the full retail sales price.

Still not convinced? Here are six reasons why you must get cargo coverage.

1.   Transportation Risks

Cargo insurance protects against physical losses or damages caused by external factors during shipping. For instance, containers can tumble off ships during rough storms. According to the World Shipping Council, an average of 1,566 containers were lost at sea annually from 2008 to 2022. In the most recent three years (2020-2022), the average losses increased to 2,301 containers annually.

A real-life example from Argus, an oil and pipeline construction company, illustrates the value of cargo insurance. In 2012, a truck carrying $809,000 worth of welding equipment for Argus caught fire during transport from Finland to Moscow.

The cargo insurance promptly covered the claim, paying for the replacement parts. Later, a cargo ship with two Argus containers caught fire in the Atlantic Ocean. The cargo policy covered the General Average claim, resulting in a full settlement of $150,000 plus an additional 10% for the demolition costs of the goods.

2.   Theft and Pilferage

Cargo theft is a big problem, with losses reaching $13.9 million in the third quarter of 2018. There were 188 reported incidents across the U.S. and Canada during that period.

Pilferage, involving the theft of part of the load, made up 15% of thefts in 2017. According to data from the Transported Asset Protection Association (TAPA) for the Americas, this is the highest on record.

Cargo insurance protects against loss from theft and pilferage.

3.   Natural Disasters

Bad weather, like extreme heat or storms, can cause shipping delays and financial losses. For example, in June 2021, a crazy heatwave in the Pacific Northwest damaged roads, rails, and bridges, disrupting freight movement.

Cargo insurance is like a safety net for situations like these. The business doesn’t have to handle the entire financial mess if a natural disaster wrecks a shipment.

4.   Regulatory and Compliance Risks

Changes in global and local rules, taxes, and trade policies can create problems following the law. Some countries even demand specific cargo insurance for shipped goods. If you don’t follow these rules, you could face legal trouble, lose money, or harm your business’s reputation.

However, cargo insurance helps businesses stick to international and local laws for moving goods, reducing the risk of a damaged reputation. If you’d rather not deal with compliance, rely on Unicargo’s expert team to navigate complex regulations.

We keep up with the latest FDA and PGA guidelines and work closely with local authorities. Our team can handle everything – from taxes to permits- making sure your imports are smoothly delivered without delays, fines, or other issues.

5.   Supply Chain Disruptions

Supply chain issues can result in business interruptions and financial setbacks. Take the case of Ever Given blocking the Suez Canal in March 2021—it had a major impact on global supply chains.

The Suez Canal, crucial for about 10% of all global trade, was blocked, holding up roughly $9.7 billion worth of products daily and causing delays in restocking retailer inventories. In such situations, cargo insurance is crucial, especially for businesses heavily dependent on complex supply chains.

You can also boost your business’s competitiveness with quicker time to market using Unicargo’s PO Management service. We streamline supply chain operations through efficient communication and exceptional management.

Our teams can communicate effectively with suppliers, monitor cargo-ready dates, and proactively handle production delays. We address issues promptly, flagging them when needed to minimize disruptions and uphold transparency. Our local teams, familiar with native cultures, bridge gaps for faster issue resolution and improved supply chain performance.

6.   Geopolitical Situation

Political conflicts can shut down vital trade routes or ports, causing disruptions and delays or even cancellations of shipments. The war in Ukraine, for example, raises the risk of damage or loss to cargo.

In early April 2022, many merchant ships were stranded in Ukrainian ports along the Black Sea and the Sea of Azov. Meanwhile, vessels in the broader region faced dangers like sea mines, rocket attacks, and the risk of being detained.

Additionally, conflicts can prompt shifts in international trade rules, like sanctions or embargoes. Fortunately, cargo insurance policies cover losses arising from acts of war and terrorism. This is important for businesses operating in regions with high geopolitical tensions.

The Bigger Picture: 4 Business Benefits of Cargo Insurance

We’ve nailed why it is important to have cargo insurance in general. Now, let’s zoom out and talk about the bigger business and operational game. What are the advantages of cargo insurance for your business? What perks does it bring to the table?

Let’s find out!

1.   Provides Financial Protection for Businesses

In international shipping, there are limits on how much carriers are responsible for if your cargo gets damaged. Like, in air freight, carriers are only on the hook for 250 francs or 19 SDR per kilo. Road freight caps it at 8.33 SDR per kilo under the CMR Convention, and sea transport limits liability to 835 SDR per package or 2.5 SDR per kilo.

Under the Convention concerning International Carriage by Rail (COTIF), rail transport has a limit of 17 SDR per kilo for lost or damaged cargo. If something goes wrong and you don’t have cargo insurance, you could be looking at big financial hits. Accidents with your truck could mean losing both the vehicle and the goods.

Also, if the damage is from inadequate packaging or the nature of the goods, the carrier won’t cover it. But with cargo insurance, businesses get a safety net. It keeps the cash flow going during unexpected disruptions, ensuring profits can still roll in if the coverage includes them.

2.   Mitigate Operational Disruptions

Cargo insurance is vital for keeping business operations running smoothly. It speeds up the settlement of claims, helping businesses swiftly recover losses. This quick process is essential for maintaining smooth operations, allowing companies to restock or replace damaged goods promptly.

Fast claim resolution prevents extended disruptions in the supply chain, ensuring businesses can meet customer demands without delays. For instance, cargo insurance can efficiently handle the situation if unexpected port strikes threaten a business.

It offers financial support to manage the extra expenses of redirecting shipments, minimizing downtime, and enabling a quicker return to normal operations.

3.   Ensure Compliance with International Trade Regulations

Cargo insurance, often mandated by international trade rules, is a must-have for businesses. For example, the Carriage of Goods by Sea Act (COGSA) regulates sea transport, stressing the need for cargo insurance by limiting carrier liability. The Montreal Convention does the same for air cargo.

Incoterms, which are international trade terms like EXW, FOB, or CIF, determine who should secure cargo insurance. Different countries have specific regulations for cargo insurance, especially for goods like hazardous materials.

For instance, the U.S. Department of Transportation (DOT) requires a minimum coverage of $750,000 for non-hazardous goods and $5,000,000 for the most hazardous materials. Following such rules is vital to avoid legal troubles and disruptions to business operations.

4.   Enhance Business Credibility and Reliability

Beyond financial protection, cargo insurance brings indirect benefits, enhancing a positive business reputation. It showcases a company’s dedication to protecting its goods and managing risks, instilling confidence in clients and partners.

By securing shipments with cargo insurance, businesses affirm their reliability and professionalism, fostering stronger relationships with customers. Showcasing financial stability and responsibility with cargo insurance also enhances ties with suppliers. This promotes increased collaboration and transparency for a more efficient and reliable supply chain.

5 Factors to Consider When Choosing Cargo Insurance

Building on the positive image created by cargo insurance, another critical aspect is considering factors when choosing the right coverage. You’ll need to consider the type & value of cargo, transportation mode, destination & route, and transit duration. Let’s explore these variables further.

1.   Type of Cargo Being Shipped

Cargo insurance is customized based on factors like the shipping type. Different items carry distinct risk profiles, necessitating personalized insurance solutions. For instance, electronic equipment may need coverage against electrical damage. Then, perishable goods may require protection against spoilage in temperature-controlled transport.

Therefore, tailoring insurance to the unique vulnerabilities of your cargo is crucial. Specialized insurance policies with higher limits and specific exclusions are also necessary for certain commodities like artwork, antiques, or precious metals.

2.   Transportation Mode

With each mode of transportation—sea, air, and land—comes distinct risks. Sea transport grapples with rough weather and piracy, air transport contends with turbulence and handling damage, and land transport faces risks like accidents, theft, and delays. To ensure effective coverage, customize your insurance to the unique risks associated with your chosen mode of transport.

3.   Value of the Cargo

The more valuable your shipment, the more comprehensive your insurance should be to ensure adequate compensation for any loss or damage. Under a cargo policy, goods are typically valued at the invoice cost, freight charges, and an additional percentage of those amounts (usually 10%).

Let’s say your cargo is worth $20,000, and shipping sets you back $3,000. Your insurance? It covers a total of $25,300.

Cargo value: $20,000

Shipping cost: $3,000

Total cost incurred: $20,000 + $3,000 = $23,000

Insurance coverage: $23,000 + 10% of total cost incurred = $25,300

For high-value cargo, consider opting for “all-risks” coverage, as it provides broader protection against various perils. Also, explore options like increased limits and excess cargo insurance.

Unicargo offers comprehensive cargo insurance covering loss, damage, or theft at a small percentage of your goods’ value. Our experts can assist you in choosing the right coverage, considering your cargo’s value, transport risks, and budget for the optimal solution.

4.   Destination and Route

The insurance rates can be influenced by the chosen route and the shipment’s destination. For instance, war risk insurance premiums increased for Red Sea voyages following three vessel attacks on December 3rd.

Some countries have stringent import regulations, mandating specific types of insurance. Moreover, certain routes, particularly those with higher piracy or war risks, may necessitate additional coverage.

So, research the insurance requirements of your destination country and adjust your coverage accordingly. Be mindful of potential risks on your chosen route and contemplate extra coverage for high-risk areas.

5.   Duration of Transit

Make sure your insurance period matches the expected duration of your shipment to avoid coverage gaps and ensure protection throughout the entire journey. Short-term cargo insurance policies offer coverage for a specific term, usually ranging from a few days to a few years.

On the contrary, long-term insurance policies provide coverage for an extended period, potentially spanning several decades or a lifetime. For infrequent shippers, shipment-by-shipment coverage suffices, while those shipping year-round find annual coverage more cost-effective.

How to Obtain Cargo Insurance?

After considering the factors when choosing cargo insurance, the next step is to obtain it. This involves understanding your insurance needs, selecting a reliable provider, and familiarizing yourself with essential documentation. Here’s a lowdown:

1.   Know Your Insurance Needs

Tailor your insurance to different cargo types based on their value, fragility, and susceptibility to damage. An annual policy is advantageous if you’re a frequent shipper (occasional shippers may opt for single-trip coverage).

Also, assess specific sea, air, and land transport risks, such as weather events, piracy, and political unrest along your chosen route. While cost matters, it shouldn’t be the sole consideration. The cheapest policy may lack the necessary coverage.

2.   Choose a Reliable Insurance Provider

Look for a trustworthy insurance provider. Evaluate their market reputation and track record in claims handling and customer service. Confirm their financial stability by checking independent agency ratings. Ensure they offer precise coverage for your cargo and have experience in your industry, such as Unicargo.

As a digital freight forwarder that provides top-notch insurance services to clients, we understand the associated risks with shipping cargo. By collaborating with top global insurance companies, we ensure efficient and effective claims resolution, delivering the best outcomes for our clients.

3.   Familiarize with Insurance Documentation

Carefully review covered risks, exclusions, liability limits, and claim procedures in your insurance policy. Seek clarification from your insurer on specific terms and clauses if needed.

Keep copies of all insurance documents, including the policy, endorsements, certificates, and correspondence. Understand the claim process, required documents, and the filing timeline. Stay informed and prepared for any potential claims.

4.   Select Suitable Coverage Type

Select the right coverage type, such as “all-risks,” named perils, or specific risk covers that suit your cargo. Determine suitable liability limits, indicating the maximum payout for a covered loss. Explore additional coverage options like war risk, strikes and riots, and extended warehouse storage coverage based on your specific requirements.

Best Practices for Dealing with Cargo Insurance Claims

When dealing with cargo insurance, follow best practices for the preparation and prevention of claims and for filing them. From understanding policy details to prompt reporting and effective documentation, these practices ensure your business can navigate the complexities of claims confidently and efficiently. Here’s how:

Preparation & Prevention

1. Know Your Policy – Understand coverage, exclusions, claim procedures, and deadlines.
2. Document Everything – Keep records of invoices, packing lists, bills of lading, and communications.
3. Package Properly – Ensure goods are packaged for specific transportation risks.
4. Choose Reliable Partners – Work with carriers prioritizing cargo safety and industry best practices.
5. Track Your Shipment – Use tracking tools to monitor shipment location and status.
6. Act Promptly – Timely reporting is crucial for claim validity.
7. Be Honest and Accurate – Provide truthful and accurate information.
8. Seek Professional Help – Consult with cargo insurance experts like Unicargo. We get that each business has its own shipping needs. Thus, we offer fully customized policies to match your budget and the protection you want.
9. Maintain Clear Communication – Keep the insurers informed and respond promptly to inquiries.

File a Claim

1. Notify Your Carrier – Report loss or damage immediately to your carrier upon discovery. Make sure to include the carrier’s Pro number, shipper number, vehicle number, origin date, and delivery date. Commodity description should also be noted, and for the value of freight, refer to the bill of lading.

Specify the type of loss, indicating whether the goods were damaged, the percentage of damaged freight, its valuation, or if the cargo was missing upon delivery. Additionally, provide details of the freight item by item type rather than as a collective whole.

2. Gather Evidence – Collect relevant documents, photos, police reports, videos, surveyor reports, and communication. When filing a freight claim, it’s essential to provide the shipper and receiver names and addresses and list all stop-off locations for loading or unloading. Include details on the liability of freight charges, such as whether it was collected cash on delivery, or prepaid. Reference the bill of lading for any limitations on liability. Supporting documentation is also necessary for a comprehensive freight claim.
3. Notify Your Insurer – To initiate your insurance claim, reach out to your insurance provider and complete the official claim form they’ll provide upon request. Alternatively, you can submit the claim online via their website or app. Ensure you furnish the exact details as in your carrier notice and any additional information your insurance provider requires.
4. Deliver Claim to Your Carrier – Freight claims need to reach the carrier within the contract-specified or legally defined timeframe, often nine months from the freight delivery date. The carrier must confirm the receipt date for timely claim processing, making delivery methods with confirmation crucial. Address the claim to the carrier’s claims manager, sending it to their home or corporate offices rather than a hub. Avoid delivering claims in person to a carrier or sending them with a driver.
5. Cooperate with the Investigation – Work closely with both your insurance provider and the carrier during the claim process. They might request additional evidence like receipts, invoices, or repair estimates. Adjusters may contact you for goods inspection and valuation determination. Promptly and honestly respond to any requests or inquiries from your insurance provider or carrier.
6. Negotiate the Settlement – Engage in negotiations with both your insurance provider and the carrier to determine the compensation for your loss or damage. The insurance provider will cover valid claims approved according to policy terms, while the carrier will be responsible for valid claims under their contract of carriage. If disputes arise on payment responsibilities, consider hiring a lawyer or mediator to assist in resolution.

3 Tips for Optimizing Cargo Insurance Coverage

Navigating the intricacies of cargo insurance involves more than securing coverage. It’s about optimizing it for evolving business needs.

Here are some tips to improve risk management, ensure alignment with regulatory demands, and reduce claim frequencies and severity.

1.   Regularly Assessing and Updating Coverage Needs

As your business grows and undergoes changes, its risks evolve accordingly. Expanding into new markets or introducing new products can shift the risk profile, emphasizing the importance of regularly evaluating and updating cargo insurance coverage.

Therefore, you’ll need to adjust to accommodate changes in cargo value, transportation routes, or regulatory demands. Periodic reviews, preferably conducted annually, ensure that insurance remains relevant and adequate. This proactive approach helps identify potential coverage gaps or unnecessary premiums, allowing policy adjustments as needed.

2.   Implementing Risk Management Strategies

Implementing risk mitigation practices like secure storage, proper packing, and safe transportation can lower the chances of cargo issues. These measures work hand-in-hand with cargo insurance, reducing the frequency and severity of potential claims. This, in turn, leads to lower insurance premiums and increased negotiating power with insurers.

3.   Building Strong Relationships with Logistics Partners

Fostering robust relationships with your logistics partner is crucial for effective risk management. Collaborative efforts enable improved communication, a shared awareness of risks, and coordinated strategies to mitigate them.

Additionally, strong partnerships with logistics providers enhance overall risk management and insurance strategies. These alliances offer valuable insights into potential risks and contribute to the development of customized insurance solutions.

FAQ: Cargo Insurance

How Much Is $100,000 in Cargo Insurance?

Cargo insurance costs can widely differ, influenced by factors like cargo type, transportation mode, and destination. For example, marine cargo insurance rates may vary from 0.2 to two percent of the goods’ total value.

So, for a policy covering $100,000, the annual cost could range from $200 to $2,000. In land transportation, a motor truck cargo insurance policy with a $100,000 limit might cost between $400 and $600 per year.

How Much Does Cargo Insurance Cost?

Cargo insurance costs vary based on goods type, transportation mode, coverage limits, and deductibles. A basic way to calculate insured value is to add the invoice value and freight cost plus 10% for additional expenses. On average, marine cargo can cost 0.5% of total cargo value; e.g., $15,000 cargo may cost around $751.

On the other hand, air cargo insurance is relatively expensive, averaging 50 cents per pound or up to $100,000 per shipment. Land transport insurance ranges from $400-$1,800 annually or $35-$150 monthly for standalone policies. Moreover, owner-operator truckers might pay $350-$620 per month for a $1M cargo insurance policy.

Is Cargo Insurance a Requirement?

Is freight insurance necessary? While not always obligatory by law, cargo insurance is highly recommended for all shippers dealing with valuable or delicate items. It is especially vital when venturing into unfamiliar routes or with a new carrier. Several international agreements also mandate a certain level of liability coverage for cargo transport.

Additionally, certain countries may demand proof of cargo insurance from importers before permitting goods entry across their borders. In specific industries, such as household goods transportation across US state lines, cargo insurance is legally mandated.

What Is the Standard Cargo Liability?

The standard cargo liability refers to the maximum amount of compensation that a carrier (such as a shipping company or freight carrier) is legally responsible for in case of loss, damage, or delay to the goods being transported. This liability is typically outlined in contracts, bills of lading, or other shipping documents.

Are Container Ships Insured?

Yes, container ships are insured, and it’s a mandatory requirement under various international conventions. These conventions stipulate that ship owners must have liability insurance to address potential claims related to cargo damage, passenger or crew injuries, and environmental pollution.

Conclusion

International shipping is unpredictable, with the risk of shipment damage or loss looming all the time. Therefore, whether you’re navigating the complexities of global trade or safeguarding your investments during growth, cutting corners on cargo insurance is a big no-no.

That’s a shortcut to jeopardizing your cash flow, stunting ROI, and dealing with filing claims with clueless insurers. With Unicargo, we team up with the best global insurance companies, providing top-notch results for our clients. No need to become a trade expert—leave that to us.

We have the know-how to handle claims hassle-free, ensuring a speedy payout. Got unique shipping needs? Our custom-tailored cargo insurance will fit your budget, protecting your precious cargo. No claim hassle either – our team handles it all until you get your compensation.

And if cargo insurance is a must, our Importer of Record service takes the legal load off your shoulders. We handle customs, permits, and compliance, leaving you worry-free. Let’s chat about securing your business – Contact Us today!

Planning your next shipment?  Get a Quote Now

The post Why Cargo Insurance is a Must and Why Is It Important? appeared first on Unicargo.

Yet, for Amazon FBA sellers, international shipping means customs clearance hurdles, transit mishaps, product bans, and strict rules. It’s a real-time suck and more unpredictable than a soap opera with plot twists.

That’s where an experienced Amazon FBA freight forwarder is vital for handling these shenanigans. These experts ensure efficient global inventory movement by managing complex supply chains, diverse logistics, paperwork, payments, and customs brokerage.

In this article, we discuss the process of hiring a freight forwarder — covering costs, evaluating partners, crucial considerations, and must-have contract elements.

So, are you ready for seamless global FBA shipping? Jump right in!

Amazon Freight Forwarding Process: Key Takeaways

• Amazon Freight Forwarding (AFF) is vital for FBA sellers, acting as a middleman between sellers and Amazon’s fulfillment centers.
• AFF has two options: 3rd Party Freight Forwarding (3PL) and Amazon Global Logistics (AGL).
• AGL, Amazon’s in-house program, offers strategic benefits like quicker shipping and integrated services but has limitations.
• 3PL provides more flexibility and personalized services, making it suitable for diverse shipments.
• Choosing between AGL and 3PL depends on your business needs. Combining both can be beneficial to fill gaps and enhance efficiency in the supply chain.
• When hiring an Amazon freight forwarder, ask about their experience, rates, transit times, cargo insurance, customs clearance, end-to-end logistics, and customer service.
• When choosing a freight forwarder, consider factors like expertise, services offered, credentials, financial stability, tracking capabilities, delivery options, insurance coverage, and customer service.
• Research, request quotes, compare, negotiate, review insurance options, confirm communication channels, understand limitations, and sign a contract with clear clauses to ensure a successful partnership.
• Estimating AFF costs is complex, influenced by product types, weight, volume, origin/destination, chosen shipping method, and additional fees.

What Is Amazon Freight Forwarding?

Simply put, freight forwarding refers to managing the movement of goods, from negotiating rates with carriers to handling documentation and customs clearance. They might also bundle shipments, offer storage, and take last-mile delivery.

But what is a freight forwarder on Amazon?

Freight forwarders on Amazon are crucial for FBA sellers selling products on the big Amazon e-commerce platform. They act as a middleman between sellers and Amazon’s fulfillment centers. So, how does freight forwarding work for Amazon sellers in actuality?

How Amazon Freight Forwarding Operates?

Amazon freight forwarding involves coordinating transportation for inventory from the supplier/manufacturer to Amazon fulfillment centers. This includes negotiating and organizing shipments via ocean or air freight, handling customs clearance and documentation, and offering real-time tracking.

Services also include packing according to FBA guidelines, inventory management, and shipment insurance. Some freight forwarders also cover warehousing near Amazon centers to store the sellers’ inventory until it’s ready for shipment to Amazon fulfillment centers. Here’s a simple illustration of how an Amazon freight forwarder works:

You have two options in Amazon freight forwarding though: 3rd Party Freight Forwarding (3PL) and Amazon Global Logistics (AGL).

3rd Party Freight Forwarding vs. Amazon Global Logistics

In 2020, Amazon Logistics brought in more than $80 billion in global revenue. On the other hand, the entire global 3PL industry raked in an impressive $961.8 billion during the same year.

Both 3rd Party Freight Forwarding and Amazon Global Logistics help you ship goods to Amazon. But they differ in who’s in charge and how much control you get. With 3rd Party, you hire another company to handle the transport from the manufacturer/warehouse to an Amazon fulfillment center.

A study found that 86% of Fortune 500 companies in the United States utilize 3PL providers for diverse logistics and supply chain functions. This percentage isn’t surprising because 3PLs are experts in handling global shipping regulations and securing optimal deals for both providers and shippers.

They cover all the steps in the supply chain and offer services like storing your goods, shipping them, and ensuring orders get fulfilled. Plus, they can throw in extras like packaging, assembly, and kitting.

On the other hand, Amazon Global Logistics is Amazon’s own shipping program. It links Amazon Marketplace Sellers, Amazon Business Sellers, Amazon customers, and Fulfilled by Amazon (FBA) services to global shipping options.

AGL ships your goods from China and Hong Kong to Amazon marketplaces or Warehousing and Distribution (AWD) spots. It’s an Amazon upstream bulk inventory solution for 3P sellers seeking extended storage and automatic restocking into FBA.

Sellers can join AGL and request a shipment via Seller Central, accessible in the US, UK, EU, and Japan. AGL is easy to use and connects seamlessly with your Amazon seller account. Amazon handles all the paperwork and logistics and is responsible for any lost or damaged shipments.

But is 3rd Party Freight Forwarding better than Amazon Global Logistics or not? Read the pros and cons of both services and decide by yourself.

Amazon Global Logistics

Upsides:

• It taps into Amazon’s vast network of global fulfillment centers, strategically placing your inventory near potential buyers. This results in quicker shipping and enhanced customer satisfaction.
• It offers a pickup service to collect cargo directly from the supplier/manufacturer.
• It offers up-to-the-minute inventory information and insights through the Seller Central dashboard. You can monitor stock levels, see reorder suggestions, and handle purchase orders all in one spot.
• Automated inventory restocking reduces the chance of running out of stock, resulting in fewer upset customers and missed sales chances.
• Easy integration with other Amazon services, such as FBA and MCF, can simplify your workflows and data management.

Downsides:

• If your inventory doesn’t come from China or Hong Kong, you can’t use AGL.
• Though initial costs might be lower, AGL fees can vary based on shipment volume and specific requirements. It’s not cost-effective for sellers dealing with products with high tariff rates.
• Smaller FBA storage limits could limit the quantity of inventory eligible for AGL.
• Lacks Delivered Duty Paid (DDP) services that many sellers commonly use.
• If you’re not a Limited Liability Company (LLC), Amazon can’t handle custom clearance for you.
• It is mainly designed for Amazon sellers, providing less adaptability compared to a 3PL that can manage broader distribution channels.
• You have limited control as you have to adhere to Amazon’s terms and services. This limits your control over certain logistics aspects and your ability to customize shipping, e.g.:

1. A less than 400 Inventory Performance Index (IPI) might lead Amazon to reduce your allowed storage space.
2. Individual accounts are allowed only a storage limit of 15 cubic feet.

• The expenses are relatively high compared to most 3PLs. While it offers competitive rates, negotiation flexibility may be restricted.
• It offers standardized services, making it less suitable for businesses with unique fulfillment needs or specific delivery requirements.

3rd Party Freight Forwarding

Upsides:

• You can pick from a range of providers offering different services and rates.
• It enables shipping from multiple locations (other than from only China and Hong Kong) to Amazon fulfillment centers globally. This provides sellers with more flexibility in sourcing.
• You gain greater control in selecting carriers, routes, and insurance options.
• It is the better choice for managing intricate supply chains and looking for personalized services and competitive rates.
• You get more freedom for personalized packaging and branding to maintain brand consistency.
• You’re not restricted to Amazon’s network, as you can pick the most cost-effective or fastest carrier based on your requirements. This is especially advantageous for large items or specific delivery needs.
• It provides tailored inventory management solutions, multi-channel fulfillment, and value-added services like kitting and assembly for your product needs and fulfillment processes.
• Depending on your volume and product, 3PLs might have lower storage fees than Amazon’s fulfillment centers.
• It can flexibly adjust its services to match seasonal changes or your business growth, eliminating the need for extra investments in infrastructure or staff.

Downsides:

• Finding a reliable 3PL partner experienced in shipping to Amazon is challenging. You’ll have to research, compare, and choose a dependable partner.
• Handling inventory and fulfillment with a 3PL usually involves using separate systems and syncing data, which adds complexity and increases the workload.
• You might have to manually oversee inventory restocking, risking stockouts if not handled proactively.
• According to the Amazon freight forwarder policy, you’re on the hook for lost or damaged shipments if you choose a 3PL for FBA shipments.

Which to Choose?

So, do you need a freight forwarder for Amazon FBA? Or will AGL be enough? Well, to answer your queries, it depends on your business needs and priorities. AGL could be more efficient for shipping high-volume shipments (bulky items with low weight) directly to your fulfillment centers.

It enables you to restock and sell your inventory swiftly and can be cheaper if you have a small business. However, if your products fall under a category with seasonal FBA storage limits, it isn’t the ideal choice. Moreover, items like groceries and refrigerated items won’t have temperature control during transport.

Besides, trying to time shipments precisely for the allowed storage seasons makes this approach costly. For such categories, opting for a 3PL is necessary.

According to a report, the global 3PL market is projected to expand at a CAGR of 5.30% between 2024 and 2032. It will reach a value of around $1,685.54 billion by 2032. In 2023, it hit almost $1061.95 billion in value.

                                    Source: expertmarketresearch.com

The growth of the 3PL industry is fueled by unprecedented challenges and complexity in the supply chain. That’s why many businesses seek a partnership with a 3rd party freight forwarder to streamline logistics and reduce operating costs.

A 3PL is ideal for diverse shipments, multi-channel fulfillment, or if you prefer customized solutions and flexibility in shipping options and carriers. It can offer economies of scale for small to medium-sized businesses and is perfect for shipping goods weighing over 200kg.

Or, if you anticipate business growth, you might require a 3PL that can grow along with you. But it’s wiser to combine both 3PLs and AGL to complement each other and fill in gaps if problems crop up with one. However, if you’re opting for an Amazon freight forwarder, you must know the cost of hiring one.

How Much Does an Amazon Freight Forwarder Cost?

So, how much does it cost to employ a freight forwarder? Honestly, it’s quite difficult to accurately estimate the cost and fees of Amazon freight forwarders due to multiple factors involved. The expenses can vary due to variables like product types, weight, volume, and seasonal fluctuations.

They also depend on the origin and destination of your shipment, with certain regions being more costly than others. But the most critical factor is the shipping method you choose. As a rough estimate, air shipment may cost around $5 per kilogram, and sea shipment is less than air transport, around $1 per kilogram.

However final costs vary based on the volume of total goods. Besides the primary shipping charges, freight forwarders might tack on additional fees such as:

• Fuel costs can differ depending on geopolitical tensions, war, etc.
• Customs clearance (tariffs + import duties + taxes (VAT in Europe and Bond in the USA) + fees charged by customs brokers).
• Cargo insurance (the rate depends on the product value and category, shipping route risks, and the distance to the destination).
• If you choose pickup, your freight forwarder will also charge for transporting your shipment. This fee depends on the distance between the origin and port – the farther, the pricier.
• If you choose a container to ship goods, you’ll have to pay container rent according to its size— 20 feet or 40 feet.
• You might incur a documentation handling fee for the freight forwarder preparing and processing necessary paperwork for your shipment. This typically ranges from $35 to $75 per shipment and covers paperwork management and administration for cross-border shipping.
• Your destination country might have extra expenses for controlled exports or getting documents legalized at embassies or consulates.

However, Amazon sellers using Fulfillment by Amazon can benefit from negotiating lower shipping rates with partnered freight forwarders like Unicargo. Besides, we maintain a strong connection with Amazon’s FBA teams for seamless communication and handling, even in unexpected situations.

What FBA Sellers Should Ask Their Amazon Freight Forwarder?

Once you have the pricing details, the next step is to know how to pick a freight forwarder for Amazon FBA. You must ask the following questions to evaluate potential freight forwarding partners for your business needs:

1. What is your experience with Amazon FBA shipping? Look for a freight forwarder with extensive experience shipping products to Amazon’s fulfillment centers. They should be familiar with Amazon’s requirements and shipping, labeling, and packaging guidelines for different regions.
2. What are your rates and fees? Request a detailed breakdown of rates and fees, including any additional charges for customs clearance, warehousing, and last-mile delivery. They should offer competitive and reasonable rates in the market.
3. What is your estimated transit time? Choose a freight forwarder offering reliable and fast transit times. Ask about factors that could affect delivery time to manage expectations effectively.
4. What is your cargo insurance policy? Opt for a freight forwarder that provides cargo insurance to safeguard products against damage or loss during transit.
5. Are you capable of working with smaller sellers? Seek a freight forwarder capable of providing customized solutions tailored to the unique needs of smaller sellers.
6. Do you handle customs clearance? Choose a freight forwarder with expertise in customs clearance, ensuring a smooth process involving documentation, compliance, and regulation adherence. They should be able to provide a customs bond to ensure the payment of duties and taxes, offering additional protection during transit.
7. Can you transport my goods from the destination port to an Amazon warehouse? Opt for a freight forwarder offering end-to-end logistics solutions, including transportation from the destination port to Amazon’s warehouse.
8. What is your customer service policy? Select a freight forwarder with strong customer service policies, including effective complaint handling, clear communication, and comprehensive support.

 Unicargo has been shipping to Amazon fulfillment centers and was actually the first in its landscape to cater to this niche- of Amazon Sellers- and understands their operations well for different regions. As part of Amazon’s solution provider network (SPN), we offer an optimal solution for Amazon FBA sellers worldwide. With strategically located offices and warehousing solutions in the U.S., China, India, UK, and Germany can efficiently handle cargo from origin to destination.

What Information Does a Freight Forwarder Need from the FBA Seller?

If you’ve readied the comprehensive set of questions for your Amazon freight forwarder, next, gather key info they need from you. Giving them the correct details ensures a smooth shipping process that plays a crucial role in the success of your Amazon FBA business.

• Product details – Share specifics like product type, quantity, weight, and dimensions to determine the suitable shipping method and carrier.
• Origin and destination – Provide locations for shipping and delivery to plan the most efficient route and transit time.
• Shipping terms – Clarify agreed-upon shipping terms, including incoterms, outlining seller and buyer responsibilities.
• Export documentation – Furnish required export documents such as:

• A detailed packing list: includes item identification and net and gross weights and is used to prepare bills of lading.
• The bill of lading: acts as proof of ownership when both the shipping company and the customer sign it.
• A commercial invoice: is given to the customer as a document for services provided, and customs duties are determined based on it.
• The export declaration document: provides information about exported goods and is submitted at the port.

• Customs clearance – Inform about customs clearance requirements, covering duties, taxes, fees, and compliance with regulations.
• Licenses – Export and import licenses and government documents make goods eligible for leaving or entering the country.
• Cargo insurance – Specify if you require cargo insurance. We highly recommend getting one!
• Certificate of Inspection – Amazon FBA has strict standards for sellers sending inventory to fulfillment centers. An inspection certificate ensures your products meet these standards, preventing issues and allowing for quality checks before payment.

After inspection, a detailed report is compiled, ensuring compliance with legal regulations. The inspection company you’ll hire will then issue a certificate you’ll have to give your freight forwarder. This helps speed up shipment release from customs.

How to Hire an Amazon Freight Forwarder?

Have you gathered the critical information an Amazon freight forwarder will need? That’s good. Move on to the next and the most crucial step i.e. learning how to choose a freight forwarder for your Amazon FBA shipping:

• Research – Explore freight forwarders specialized in Amazon FBA and experienced in international shipments. Search for those with favorable reviews.
• Request Quotes – Approach potential forwarders for quotes, sharing comprehensive shipment details like weight, dimensions, and destination.
• Compare Quotes – Evaluate received quotes from different forwarders, considering services, pricing, and reputation in your comparison.
• Negotiate – If a preferred forwarder emerges, engage in negotiations covering contract terms, service scope, pricing, and relevant particulars.
• Review Insurance Options – Talk about and make choices regarding cargo insurance. Grasp the coverage and liabilities involved.
• Confirm Communication Channels – Establish transparent communication lines for updates and problem-solving communication.
• Understand Limitations – Grasp any service limitations and what the freight forwarder doesn’t cover.
• Sign the Contract – Upon reaching an agreement, finalize by signing the contract. Ensure it encompasses service details, pricing, payment terms, and liability.

How Your Contract with an Amazon Freight Forwarder Will Look Like?

Before you enter into a contract with an Amazon freight forwarder, you must understand its structure and the documents you need.

The contract structure will include the following general clauses:

• Parties Involved – You (Amazon seller) and the freight forwarder.
• Services Provided – Outlines specific services like cargo consolidation, customs clearance, and door-to-door delivery.
• Rates and Fees – Specifies service costs, potential surcharges, and minimum shipment volumes.
• Payment Terms – Defines invoicing and payment schedules.
• Insurance – Details insurance coverage options and associated costs.
• Liability – Clarifies responsibilities in case of loss, damage, or delays.
• Term and Termination – Specifies contract duration and termination conditions.
• Confidentiality – Protects shared sensitive information.
• Dispute Resolution – Outlines the process for resolving disagreements.

Depending upon your contract, you may need additional clauses:

• Minimum Order Quantity (MOQ) – If you require a minimum shipment volume.
• Cargo Restrictions – Outlines prohibited or specially handled goods.
• Performance Guarantees – This may include guaranteed transit times or service levels.
• Technology Integration – Provisions for connecting systems with the forwarder’s platform.

To sign a contract with your Amazon freight forwarder, you’ll require the following documents:

• Business Registration Documents – Proof of business registration and legal entity status.
• Tax Identification Number – Tax ID number for relevant authorities.
• Product Information – Detailed descriptions, including HS codes and values.
• Insurance Requirements – Preferred insurance coverage level for shipments.
• Shipping Instructions – Specifics about origin, destination, delivery timeframes, and any special handling needs.

What are the Limitations to the Freight Forwarding Services?

While Amazon freight forwarders are valuable for international shipments, there might be some limitations to the services some of them provide. Therefore, you must consider where your potential freight forwarder draws the line before signing a contract with them. Here they are:

• Limited Liability – They might have limited liability for damage or loss. This means uninsured losses could be your responsibility. Review all insurance options and decide.
• Compliance and Regulations – Most forwarders don’t specialize in customs regulations, requiring separate engagement with customs experts for compliance. But, Unicargo has an in-depth knowledge of regulations, including FDA and PGA guidelines. We offer end-to-end compliance solutions without a separate engagement, covering everything from customs clearance to accurate product classification. Our experts assist businesses in avoiding bureaucracy, penalties, delays, and additional costs with duty and tax optimization, free trade agreements management, and risk mitigation.
• Product Restrictions – Goods with special handling needs may be excluded. Check the prohibited items list and discuss your product specifics.
• Value-Added Services – Additional services like labeling may not be included. So, inquire about extra costs for specific needs. However, at Unicargo, we offer value-added services like packaging, labeling, palleting, bundling, and kitting in complete compliance with Amazon’s requirements.

Our specialized team can manage barcodes, ASINs, FBA labels, and special packaging needs for safe transit and insert promotional materials into packages, enhancing your brand’s uniqueness. This all-in-one solution enables us to provide competitive pricing and ongoing support even as your product offerings expand.

• Technology Integration – Confirm if their technology aligns with your desired automation level for tracking and data exchange.
• Hidden Costs and Surcharges – Be wary of unexpected surcharges for factors like oversized cargo or specific destinations. So, review the contract thoroughly.
• Limited Control over Shipping – Forwarders often optimize costs by consolidating shipments, reducing your control over routing and carrier selection.
• Limited Customer Support – Support availability can vary. Some freight forwarders offer 24/7 assistance, while others have limited support hours or channels. Unicargo offers 24/7 customer service and has a customer-first approach that puts you in the center of attention.

9 Factors to Consider When Choosing an Amazon Freight Forwarder

Look for the following factors when searching for an Amazon freight forwarder to ship your goods. These will ensure you choose the most suitable one for a seamless partnership:

1. Expertise – Opt for experienced Amazon FBA freight forwarders to avoid costly errors.
2. Multiple Services – Choose a firm offering additional services like packaging, labeling, storage, inventory management, and insurance.
3. Credentials – Request testimonials and reviews to verify the forwarder’s credibility.
4. Financial Stability – Research and ensure the freight forwarder is financially stable.
5. Desired Results – Check if they meet your requirements and can deliver services within your timeframe.
6. Product/Shipment Tracking – Look for a forwarder with an integrated real-time tracking system for shipment updates.
7. Delivery Options – Confirm the logistics firm’s international delivery capabilities and understand their delivery options, such as port-to-port or door-to-door. Check for additional costs associated with specific delivery options.
8. Insurance Coverage – Verify comprehensive insurance coverage to protect against shipping losses.
9. Customer Service – Ensure the company provides excellent customer service and prompt responses.

FAQs- Amazon Freight Forwarding

Does Amazon Allow FBA Sellers to Use Freight Forwarders?

Yes, Amazon permits FBA sellers to engage freight forwarders, a common practice for international shipments. However, it’s wise to opt for a freight forwarder when dealing with goods over 200kg, requiring tailored shipping solutions, or managing intricate supply chains.

Is There a Cost Difference between Amazon Global Logistics and other Freight Forwarders?

Yes, Amazon Global Logistics and other freight forwarders differ in costs. AGL offers ocean transportation and customs brokerage services for FBA sellers at reduced landed costs and competitive rates. In comparison, various freight forwarders may have distinct pricing structures which can be less or not. Therefore, you need to compare quotes from different companies.

Can I Use My Own Freight Forwarder with FBA, or Is Amazon Global Logistics Mandatory?

Using Amazon Global Logistics is not obligatory for FBA, and you can opt for your own freight forwarder. However, if you choose this route, you’ll need to hire a freight forwarder well-versed in the Amazon FBA shipping process. This will ensure your shipment aligns with Amazon’s requirements.

Can I Use Multiple Freight Forwarders for Different Shipments within My FBA Business?

Yes, you can use multiple freight forwarders for various shipments in your FBA business. However, it’s crucial to verify the reliability and expertise of each freight forwarder in managing international shipments.

Conclusion

As Amazon FBA shipping demand surges, businesses seek efficient global solutions. This, in turn, increases the need for freight forwarders to handle complex supply chains, customs clearance, strict regulations, and diverse logistics challenges.

However, unlike traditional freight forwarders, Unicargo offers digital solutions for faster, more efficient, and transparent Amazon FBA shipping. We’re your E-commerce logistics hub, covering freight forwarding, customs and compliance, warehousing, fulfillment, B2B/B2C distribution, cargo insurance, real-time tracking via our digital platform, and consulting.

Our value-added and Amazon preparation services are tailored to fulfill Amazon requirements and your business needs. We offer advanced fulfillment centers nationwide to ensure swift, cost-effective shipping. While our strategically located warehouses cut delivery times, lowering costs.

We directly integrate with Amazon FBA to seamlessly merge our services into your workflow. Our experts also simplify complex reverse logistics—managing returns, selecting couriers, and handling inquiries—no need to hire multiple companies to take care of your global shipping needs.

Optimize your Amazon FBA shipping with Unicargo today – your all-in-one solution!

Questions?  Feel free to contact us and inquire more with one of our experts. 

We’re here as your partner and share the same values and goals.

The post Navigating the FBA Supply Chain: Understanding the Amazon Freight Forwarding Process appeared first on Unicargo.

The real puzzle? Amazon pallet requirements for global sellers vary across regions.

Any misstep can lead to delays, surprise expenses, penalties, rejections, or damage to your reputation. Therefore, in this article, we’ll share Amazon’s preferred pallet standards and why they insist on sellers using pallets.

We’ll also help you learn the ropes for preparing pallet shipments for Amazon FBA centers and avoid instances where Amazon may reject your shipment. So, what are the pallet requirements for international shipments?

Let’s find out!

Amazon Pallet Requirements: A Quick Explainer

• Pallet dimensions vary for different regions/Amazon marketplaces.
• The maximum height of a pallet encompasses the pallet and loaded freight.
• Weight limits for single and double pallets are the same for a region.
• Sturdy wooden or plastic pallets (only in Japan) are recommended for durability during shipping.
• Follow ISPM-15 regulations or face rejection or additional fees.
• Pallets should follow GMA Standard B, GMA Standard 1A, and GMA 1B grades.
• FBA Box ID and FBA Pallet ID labels on pallets are essential for inventory tracking.
• Clear plastic stretch wrap is required for pallet visibility.

When and Why Amazon Wants Sellers to Use Pallets?

Amazon mandates using pallets for FBA (Fulfilled By Amazon) shipments that exceed 150 pounds, have 20+ individual boxes, or fill an entire truck. This is done to ensure efficient order fulfillment. LTL (Less Than Truckload) and FTL (Full Truckload) shipments are part of the FBA program requiring pallets.

LTL is a budget-friendly choice for freight weighing 150 to 15,000 pounds, with multiple shippers sharing truck space and paying only for their portion. Pallets in this type of shipment are often used to bundle smaller packages, streamlining handling and transportation.

But what is the LTL pallet limit? Sellers can simultaneously ship up to 10 pallets, no longer than 12 linear feet, for an entire LTL shipment. This provides a budget-friendly option for restocking without the hefty expenses of full shipping trucks. Just make sure there are no more than 5,000 boxes on each pallet.

FTL shipments, however, are for freight that occupies the entire truck space, weighing more than 15,000 pounds. They usually need pallets to arrange and securely transport goods. Sellers can ship up to 26 pallets in FTL. Other reasons why Amazon wants sellers to use pallets for FBA shipments include:

• Efficiency – Pallets make loading and unloading quick and easy, with swift movement using forklifts or jacking devices, reducing time and effort for handling individual boxes.
• Safety – Goods on pallets lessen the chance of damage during transit. They can be shrink-wrapped or strapped together for added protection, minimizing the risk of loss.
• Space Optimization – Pallets allow for efficient use of warehouse or truck space by easy stacking, maximizing storage capacity, and reducing storage costs.
• Cost Savings – Pallets can cut handling costs by moving more goods at once, potentially leading to faster deliveries, improved customer satisfaction, and increased sales.
• Tracking – Pallets provide traceability throughout the supply chain, aiding inventory management and offering valuable data for enhancing logistics and supply chain operations.

If you’ve been selling on Amazon for a while, check your sales history to gauge your average monthly shipping volume. Larger shipments that aren’t practical as individual units may require palletization. Also, refer to Amazon’s FBA Seller Central guidelines for your region for palletizing shipments to comply with their standards.

You can use an FBA calculator to estimate shipping costs based on product dimensions, weight, and shipping method. Or get a free quote from an Amazon FBA freight forwarder like Unicargo. We can assess your FBA shipping volume and suggest cost-effective ways tailored to your needs.

Types of Pallet and Amazon’s Preferred Pallet Standards

Storing goods on pallets in Amazon’s fulfillment centers is convenient due to their standard size, allowing efficient stacking for optimal space utilization. Moreover, Amazon’s warehouses are built to handle palletized goods, making it faster and easier to move them around. This reduces the processing time for shipments.

However, choosing the right pallet standard is crucial for secure shipping through Amazon FBA, determining whether your delivery goes smoothly or faces potential damage. But here, some questions might come to mind, like, “What pallets does Amazon accept, and what are the requirements for Amazon pallets?”

The answers are not straightforward, though. Amazon has varying pallet requirements depending on the country. As a global seller, you must adhere to the specific pallet material, grade, Amazon pallet size requirements, etc., of the destination where your pallets will be shipped. So, let’s discuss each of them in detail:

1.   Pallet Type

Here are Amazon’s preferred pallet types for the US, EU, and Japan:

• US, AUS, Canada, UAE, SA, and Mexico –Global sellers Amazon pallet requirements for USA, Australia, United Arab Emirates, Saudi Arabia, and Mexico include a four-way entry or block pallet. Accessible from all four sides by a forklift, it’s perfect for tight spaces or moving pallets in various directions.

• EU – Amazon suggests using a 4-way access EURO/CHEP pallet for Europe. This type is tailored to meet the European Pallet Pool (EPP) and Chemical Distribution Association (CHEP) standards, commonly employed for transporting goods across Europe.

• Japan – Amazon has four pallet standards for Japan. One is the four-way access one, while the other three include 1-way fork and 2-way fork pallets and one-sided pallets.

One-way pallets are meant for single-use when shipping goods. They come in various shapes and sizes as they lack standardization. On the other hand, two-way pallets, also known as stringer pallets, are designed for lifting by the deck boards, featuring openings at the top and bottom.

Two-way pallets are cost-effective, beneficial for businesses shipping large volumes, and allow lifting from both front and rear.

In contrast, one-way pallets have a continuous sheet without gaps. This makes them easy to clean and ideal for transporting small items without the risk of them slipping through the cracks.

2.   Pallet Material

Amazon mandates using ISPM -15 wooden pallets (lumber, plywood, composite, etc.) for the US and EU and most of the other marketplaces. ISPM-15 wooden pallets undergo heat treatment or fumigation to meet the International Standards for Phytosanitary Measures (ISPM) No. 15.

This global standard aims to prevent the spread of pests and diseases by regulating the treatment of wood packaging material. Furthermore, the International Plant Protection Convention (IPPC) governing ISPM-15 has made it compulsory for heat-treated pallets to bear their approval stamp.

In specific cases like Japan, plastic pallets (polypropylene) are also acceptable.

3.   Pallet Size

So, what size are Amazon pallets? Amazon has different standards for pallet size according to the countries:

• US – A single pallet should be 40 x 48 inches or 101.6 X 122 cm in dimensions. But are there any weight or size restrictions for shipping pallets to Amazon FBA US? Yes, there are. A solo pallet shouldn’t exceed 72 inches or 182.5 cm in height, counting the pallet’s height.

If a single unit adheres to clamping instructions, it can reach up to 98 inches, including the pallet’s height. Whereas stacked pallets can’t surpass a combined height of 100 inches or 254 cm (50 inches per pallet stack).

Here, 45 inches is for boxes, and 5 inches is for the pallet. For shipping single and double pallets in the US, the maximum weight should be at most 1500 lbs or 680 kg.

• EU – Amazon recommends 80 X 120 cm of pallet dimensions; the max height should be 180 cm for a single pallet in Europe. For the UK, the measurements should be 100 X 120 cm. However, double pallet height differs in different regions of Europe.

It’s 270 cm in Germany, Central, and Eastern Europe, and 300 cm for France, Italy, and the UK. But wait! What is the maximum weight for a pallet on Amazon in the EUR? The total weight of the pallets shouldn’t exceed 500 kg in all of Europe.

• Japan – Amazon FBA pallet requirements for Japan are 110 x 110 cm in dimensions, except for beer deliveries. The height for a single pallet, including cartons, should not go beyond 1.6 meters (160 cm), but for the NRT1 warehouse (located in Ichikawa city), it’s 150 cm.

And what is the maximum weight for a pallet on Amazon for the Japanese marketplace? Amazon advises using pallets with the total weight not surpassing 1000 kg and a minimum height of 20 cm.

• AUS – Amazon Australia accepts both Australian standard pallets (116.5 cm x 116.5 cm) and GMA pallets (121 cm x 101 cm) for FBA shipments.  The pallet weight should not go over 680.4 kg.

Single pallets can’t be taller than 180 cm (except for BWU1 and MEL5 warehouses, where the limit is 160 cm). While double-stacked pallets must not exceed 254 cm in height, and they shouldn’t be stretch-wrapped together.

• Canada – Amazon FBA in Canada takes GMA pallets with dimensions of 100 x 125 cm. Single pallets shouldn’t be over 175 cm tall, including the pallet. Double-stacked pallets must stay under 250 cm in height, including the pallet. The total weight of the pallet must not go beyond 675 kg.

• UAE & SA – Both Amazon UAE & Saudi Arabia accept 100 x 120 cm pallets with a maximum gross weight of 500 kg. For shipping boxes sold together weighing over 50 kg, place them on a single pallet (one unit on each) or clamp them together. Single pallets can be 160 cm high, including the pallet. While double-stacked pallets must not go over 270 cm in height.

• Mexico – Amazon Mexico mandates 100 x 120 cm pallets, but only single-stacked pallets are allowed, no doubles. Besides, single pallets must not exceed 180 cm in height or 726 kg in weight.

4.   Pallet Grades

Amazon only accepts pallets that fulfill Grocery Manufacturers Association (GMA) standards, and there are three types of these standards. They are GMA Standard B, GMA Standard 1A, and GMA 1B pallets. GMA pallets are recycled pallets, and their grades help assess their rate based on their condition and repair status.

• GMA 1A – Also called Premium Grade A pallets, these pallets are of top-notch quality, in premium condition, and are used for transporting delicate items. They excel in transporting groceries, health, personal care, and beauty products to stores and are even used for in-store food displays.
• GMA 1B – GMA 1B Grade pallets, also known as Melon Grade, are generally of similar quality as GMA 1A Grade pallets. But they may have some cosmetic damage, like minor scratches or discoloration however, no heavy sign of damage. 1B pallets are also used to ship health, personal care, and beauty products but can’t be used for in-store display.
• GMA Standard B – These pallets are the least premium among GMA pallets being used and are also known as #2 High-Grade pallets. They may have broken stringers that have been repaired. While shippers can use them for various freight loads, it’s recommended to reserve these lower-quality pallets for less valuable goods.

How to Prepare Pallet Shipments for Amazon FBA Centers?

After understanding Amazon’s preferred pallet standards for FBA shipping, the next crucial step is preparing the pallet shipment. First, sign up as a seller, then use the shipment creation tool to share information about your palletized load and how it’s getting there.

Here’s a step-by-step guide for global sellers on getting their pallets ready to ship to Amazon FBA centers.

1.   Choose Inventory

When gearing up to ship pallets to Amazon FBA centers, it’s crucial to pick inventory carefully. Choose the products that are high in demand first, and check if they are in good condition and fit within Amazon’s size and weight limits.

Then, lump products of similar size and weight onto the same pallet. Next, choose durable boxes for packaging to safeguard items during transit and prevent damage.

2.   Pack Boxes

When selecting boxes for Amazon FBA pallet shipments, use sturdy, six-sided boxes to guarantee the safety of your products during transit. Each box sent to Amazon FBA should be at least 6 inches wide, 4 inches long, and 1 inch thick.

Ensure your boxes meet these size criteria to prevent complications during inspection. Then, share with Amazon the contents of your package, the number of boxes you’re shipping, their weight, and dimensions. If you’re not sure about the exact number of boxes, just give them a good guess.

You can keep the box content secret, but that will cost you a fee. The fee is $0.15 per unit for January-October and $0.30 per unit for November-December. Amazon will manually handle such boxes at the fulfillment center, and shipments without content info might also take longer to process.

The fee will be charged depending on when the first unit arrives. For instance, if it’s in October, a $0.15 per unit fee applies to the entire shipment, even if some units arrive in November. Similarly, if the first item of a shipment reaches the fulfillment center in December, a $0.30 per unit fee applies to all items in that shipment.

Once you’ve packed all the boxes, confirm your shipping carrier.

3.   Confirm Shipping Carrier

Create a shipping plan by confirming your pallet shipment details, including the shipping date and transport method. Depending on your needs, the shipping mode could be Less Than Truckload (LTL) or Full Truckload (FTL). Next, select a carrier. You can choose an Amazon affiliate carrier or an independent carrier.

In either case, set a pickup date for the pallets and review estimates and configurations. After confirming, check transportation cost estimates. If you choose an Amazon-partnered carrier, the next step is to print the labels.

Or you can entrust the entire process of pallet shipment to Unicargo. Other than prepping your goods, our services cover the whole supply chain from manufacturer to delivery at the Amazon fulfillment center and beyond.

4.   Print Labels

You must print labels on A4 paper to attach them to the shipping box and outside the stretch wrap. On the shipping box, labels include carrier details, FBA Box ID, origin country, weight, fragile indication, and lift instructions.

Outside the stretch wrap are labels for pallet number, handling instructions, FBA Pallet ID, and Single ASIN Pallet. Each box on the pallet needs an FBA Box ID Label for inventory tracking.

The pallet should have four Amazon shipment labels in black and white. They should be attached to the top center of each side of the pallet. This is to make them visible to the workers while unpacking. Moreover, the labels should be removable, adhesive, non-reflective, and 4 x 6 inches in size.

5.   Secure and Wrap Pallets

Secure and wrap pallets with clear packaging tape or robust stretch wrap. This prevents them from tipping during transportation, makes it easy to scan barcodes, and safeguards workers from injuries during unloading.

Begin wrapping the entire pallet from the bottom, giving them at least three layers each quarter and ensuring each layer overlaps for stability. Tighten the wrap around individual boxes, paying special attention to vulnerable corners and edges.

Employ corner boards to provide additional support, preventing crushing or shifting during transit. If opting for shrink wrap, evenly apply heat for a secure seal. Avoid over-stretching or under-stretching to maintain effectiveness. Lastly, ensure no gaps in the wrapping to prevent potential product shifts during transportation.

6.   Stack Pallets

Next, stack the pallets, arranging the heaviest boxes at the bottom for a stable base (avoid overhanging boxes and pyramid-like placement). This prevents lighter items from being crushed, ensuring even weight distribution.

Always place shipping boxes with labels facing up to facilitate efficient barcode scanning by Amazon warehouse workers. In addition, group items with the same ASIN on a pallet, applying a “Single ASIN pallet” label when applicable.

For pallets with multiple ASINs, either from one or multiple shipments, physically separate them into different shipping boxes. This simplifies identification for Amazon workers during the receiving process.

7.   Load Pallets

The last step in Amazon’s pallet requirements is efficiently loading them onto the truck or container. Proper loading saves space and speeds up processing for Amazon workers. Follow a “Turned” configuration when loading pallets. This method is opposite to side-by-side loading and involves loading pallets on a truck with their long ends facing both front and back.

The jack/forklift openings are on the sides. This maximizes space and makes it easier for forklift operators to handle the pallets from any direction. Ensure enough space during unloading to avoid damage to goods and ensure worker safety.

Chuck big boxes that can’t be clamped weigh over 100 pounds and are 80 inches long or 30 inches wide onto a single pallet. Leave at least 6 inches (15cm) clearance from the top of the pallet to the container roof and 3 inches (8cm) between stacks and walls.

For a deck leveler, leave 8 inches (21cm) from the final row to the container doors. Keep the overall height under 100 inches with 50 inches per pallet stack for double pallets.

5 Instances When Amazon Refuses to Accept a Pallet Shipment

As you already know, Amazon enforces strict guidelines and standards for FBA sellers. Violating these can lead to penalties or the shipment’s return at your cost. To prevent Amazon’s rejection of your pallet, avoid the following five instances.

1.   Incorrect Pallet Dimensions

A common blunder in shipping pallets to Amazon FBA is choosing the wrong dimensions. Verifying that the pallet size aligns with Amazon’s regional requirements is crucial to prevent logistical problems and delivery delays.

2.   Non-ISPM-15 Compliance

Not following ISPM-15 regulations can cause problems when shipping pallets to Amazon FBA centers. If pallets lack proper treatment and approved markings, they might be rejected by customs or face extra fees for treatment upon arrival. This can delay getting your inventory into Amazon’s fulfillment centers, resulting in potential financial losses.

3.   Non-Clear Pallet Wrapping

Amazon mandates clear plastic stretch wrap for pallets to ensure easy visibility and inspection without removing the wrap. Using non-clear or opaque wrap could lead to the rejection of the shipment due to restricted visibility.

4.   Cardboard or Particle Board Pallets

Amazon mandates pallets to be constructed from wood or, in some instances, plastic. Pallets made from fragile materials like cardboard or particle board are not accepted as they lack the durability for international shipping and handling.

5.   Damaged Pallets

Amazon insists on pallets being in good condition to ensure the safety of their workers and maintain the integrity of shipped products. Damaged pallets may result in shipment rejection.

A 3rd party service like Unicargo can ensure your goods align with local guidelines and dodge penalties that could harm your business. They handle packaging and labeling per Amazon’s rules, taking charge of barcodes and special packaging needs for safe and compliant transit.

FAQs – Amazon Pallet Requirement for Global Sellers

Does Amazon Accept Plastic Pallets?

Amazon typically requires durable wooden pallets for shipments due to their ability to withstand the challenges of shipping and handling. However, Amazon approves plastic pallets in regions like Japan, possibly influenced by local regulations, environmental factors, or specific operational needs. Plastic pallets, lighter and more resistant to certain elements, are suitable for specific shipments or storage conditions.

What Is the Maximum Pallet Height for Amazon?

Pallets sent to Amazon should not exceed 72 inches in height, including both the pallet and the loaded freight.

Do the 3PL Warehouses Pack and Stack the Pallets Correctly?

Yes, 3PL (Third-Party Logistics) warehouses accurately pack and stack pallets. Their services encompass storage, order fulfillment, shipping, and returns tailored to their clients’ needs.

They adhere to best practices for pick and pack services, covering the spectrum from e-commerce businesses to complete pallet order fulfillment for B2B companies. These warehouses prioritize safe and efficient pallet stacking.

How Unicargo Can Help You Navigate Tricky Amazon Pallet Requirements?

Navigating Amazon’s intricate FBA process demands precision, where even minor missteps can lead to delays or rejection. Unicargo, a distinguished Amazon Solution Provider, alleviates this burden, ensuring flawless adherence to strict pallet guidelines.

With direct access to FBA Fulfillment Centers and a sophisticated system, we guarantee seamless communication and precise handling of shipments, even in unforeseen circumstances. Collaborating closely with clients, we tailor plans to address shipping schedules, transit times, and other critical factors.

From pallet preparation to labeling and carrier selection, we guide you through every step of your global FBA journey. Unicargo’s fulfillment warehouses simplify Amazon prep processes, providing seamless preparation and last-mile delivery to Amazon’s warehouses across the world.

Our intelligent logistics planning maintains optimal stock levels, aligning with Amazon’s delivery windows, accompanied by “appointment scheduling” services on a daily basis. As your business expands, our warehousing and fulfillment services adapt to market shifts, seasonal changes, and evolving customer needs.

With self-owned trucking services (in the domestic U.S.) and strategic warehousing services, serving as your 3PL, we secure the best and most efficient, as well as cost-effective logistics operations for you. So, experience a smoother, stress-free Amazon FBA shipping journey with Unicargo — contact us now, or simply get a Quote.

Disclaimer: The information provided in this article regarding Amazon’s Fulfilled By Amazon (FBA) pallet requirements is accurate and current as of the time of writing. However, please be aware that these requirements are subject to change based on Amazon’s policies and regional logistics standards. Therefore, we strongly recommend that readers directly consult Amazon or visit Amazon’s official FBA Seller Central for the most up-to-date and specific pallet requirements pertinent to their region and situation. This article is intended for general informational purposes only and should not be considered as a substitute for professional advice or official guidelines provided by Amazon.

The post Understanding Amazon Pallet Requirements: Essential Tips for Global Sellers appeared first on Unicargo.

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Introduction

Today’s supply chain is more dynamic, complex, and crowded than ever before, so logistics professionals must make critical decisions about their freight every day. This includes selecting the optimal modes of transport. If you are in the logistics industry, an important consideration is how to move your valuable goods or cargo. Also, when global shipping needs and tight deadlines collide, the decisions or choices become significantly more complicated.

When shipping internationally, you can choose air freight or ocean freight. Business owners usually find themselves at a crossroads, debating the merits of air freight vs. ocean freight. Are you one of them?

While there are some obvious differences between sea and air transportation, it is vital to consider various variables and potential unknowns. For example, the value of goods, sensitivity to shipment time, product density, and money spent often dictate whether ocean freight or air freight is the optimal shipping solution for your business.

As the year draws to a close, you may be facing critical decisions that will impact your business success and growth during the most pivotal seasons. Picture this -The holiday season is just around the corner, and you are eager to fill your shelves and warehouses with goods that will fly off the racks. Simultaneously, as the Chinese New Year draws near, your business will likely encounter a significant logistical challenge.

In this high-stakes and complex environment, the choice between two fundamental freight options, air freight, and ocean freight, takes center stage. The choice between air freight vs. ocean freight can shape the whole supply chain strategy of a company. Your decision now can mean the difference between meeting soaring year-end demand or falling short and between ensuring a seamless supply chain or facing delays that can disrupt your entire operation.

Do you want to go on a high-speed aerial adventure or embark on a steady ocean voyage? We will comprehensively explore these two distinct options to make things simpler for you. By the time we conclude, you will know the advantages and disadvantages of each shipping method. We will also share stories of businesses navigating these tricky decisions in real-time. You will also learn about a dependable shipping ally – Unicargo – ensuring that your cargo’s journey is smooth, secure, and successful.

Understanding Air Freight

Definition and Explanation of Air Freight

We can define air freight as cargo or goods sent from one place to another by air carriers through air routes. Air freight is the dynamic hummingbird or Formula 1 of the shipping world, where products are swiftly transported via aircraft.

In the logistics world, air freight is prized for its velocity and agility. Air freight usually follows the same routes as commercial and passenger planes and is the best option for rapid and safe transportation.

Pros and Cons of Choosing Air Freight

There are many benefits and downsides of air freight. This mode of shipping is ideal for businesses and companies that need urgent delivery or when time is of great essence. Here is another advantage. It is considerably less vulnerable to weather delays compared to other methods, like ocean cargo and road transportation, making it more reliable and convenient in certain circumstances.

Pros of Air Freight

• Quicker delivery lead times
• Ideal for time-sensitive shipments, such as perishables
• Dependable courier service
• Usually comes with premium shipping insurance

Cons of Air Freight

• In most cases, it is costlier than ocean freight
• Not suitable for heavier or bulkier goods and shipment since it is more expensive
• Weather-dependent transportation mode

Speed and Transit Times

For time-sensitive goods, such as edible items, air freight is usually the best shipping solution. This is because the capability of air carriers to cope and adjust to disruptions swiftly and delays means faster transit than ocean freight. When it comes to swiftness and agility, air freight takes the crown. Your goods will reach their destination in a fraction of the time it takes by sea. That is remarkable!

To put things into perspective, if you have time-sensitive items, such as freshly caught seafood or the latest tech gadgets, air transport is your express ticket to on-time delivery. For comparison, a standard shipment from China to the United States can reach within 6 to 7 days by air, while it may take 30 days or even more via sea.

In many instances, you may have a spike in demand for part of the goods you sell, and meeting specific deadlines, such as “holiday season” (end of the year), is a MUST. Although you usually ship those goods by sea, when you have an opportunity to double down and re-order and ship quickly to replenish your shelves- air freight is the optimal solution. However, you still have to calculate your Cost of Goods Sold (COGS) correctly to make sure you’re still making a profit.

Cost Considerations

However, as you can imagine, speed comes at a premium. Since this is the fastest way, it costs a lot more to transport goods compared to other methods. This is because air freight usually requires a heftier investment compared to its maritime counterpart. To put things in perspective, a $200 ocean shipment could cost up to $1,000 by air. Think of it as buying a first-class ticket versus a standard one; the perks and benefits are evident, but it comes at a cost.

Types of Goods Suitable For Air Freight

Air freight thrives in situations and cases where time is of the essence. Air transport is the fastest and most reliable way to transport perishable goods, like fresh fruits and veggies, seafood, and flowers. You can also use it to transport high-value or precious goods, such as electronics, jewelry, and pharmaceuticals. Air freight is like the express lane on a highway, reserved for those in a hurry.

Year-End Scenario – Meeting Holiday Demand

During the holiday season, every day counts. This is where air freight becomes a valuable asset, catering to last-minute shoppers and meeting seasonal demand.

Picture this – the calendar flips to November, and the holiday season’s magic and festive spirit are in the air. Shoppers are on the hunt for the perfect gifts, such as chocolates, flowers, and tech gadgets, and retailers are working non-stop to stock their shelves with holiday treasures. This is the crucial time when air freight can be your invaluable secret weapon.

Let’s assume you run a small gourmet chocolate company in Switzerland. As December approaches, you know that chocolate buffs worldwide will be craving your exquisite and delectable creations. To meet this surge in demand, you can turn to air transportation. Wondering why? Within hours, your delicious chocolates will be loaded onto airplanes, ready to embark on a high-speed journey to international markets. Thanks to lightning-fast transit times, your sweet goodies arrive in stores just in time for the holiday rush, ensuring sweet smiles on the faces of eager customers.

Understanding Ocean Freight

Definition and Explanation of Ocean Freight

The term ocean freight or sea freight refers to the method of carrying products or commodities over marine commerce routes. Ocean freight is the most common method for transporting goods, particularly in international trade. This transportation mode allows you to deliver items in huge or bulk quantities efficiently.

Ocean freight is the steadfast and reliable turtle of shipping, utilizing colossal container ships that traverse the open seas. Goods are loaded and packed in intermodal containers for shipping by cargo carriers. This option is less expensive than transporting goods by cargo planes.

Pros and Cons of Choosing Ocean Freight

As a more affordable option than air freight, ocean freight is better suited for transporting and shipping bulk cargo. For example, the handling of large, bulky, or irregular-shaped loads is more straightforward and quicker when ample space is available, like in container yards, cargo holds, and ship decks. However, this method is slower than air freight.

Pros of Ocean Freight

• Affordable shipping method. It is usually cheaper than air freight.
• Ocean freight is built for bulk and large loads of goods, whether by container – FCL or by pallets – LCL.
• Reduced carbon footprint, making it environmentally friendly

Cons of Ocean Freight

• Longer delivery lead times compared to air cargo
• Not suitable for time-sensitive shipments

Cost-Effectiveness

On average, ocean freight is much more affordable than air freight. A World Bank study revealed that shipping goods and products by air can be as much as 16 times more expensive compared to sea freight. If you are moving furniture, large machinery, or vehicles, this is the option to consider.

Transit Times and Lead Times

You have to keep in mind that patience is a virtue in ocean shipping. Sea freight requires more time compared to the swiftness and agility of air freight. So, if your cargo isn’t on a tight schedule and you are planning well in advance, this leisurely journey across the seas is the best way to go.

Suitable Goods for Ocean Freight

Goods, such as heavy machinery and furniture, which can withstand a leisurely voyage across the ocean, are prime candidates for sea freight. Other examples include raw materials and items with extended shelf lives.

For instance, clothing, apparel, and textiles are major types of goods that are often shipped by sea freight. This is mainly because they are relatively lightweight and can be effortlessly packed into containers.

Year-End Scenario – Planning for Chinese New Year and Spring Sales

When preparing for major events like Chinese New Year or spring sales, the reliability and cost-effectiveness of sea freight truly come to the fore. In these cases, you can anticipate demand well in advance,

Here is a scenario that highlights the benefits of ocean freight. As the year winds down and the appetizing scent of gingerbread and mulled wine fills the air, businesses, and companies are already setting their sights on the next big events. These are Chinese New Year and the highly awaited spring sales. These are moments when strategic planning meets opportunity, and for these occasions, sea freight emerges as the unsung hero.

Imagine you operate a toy manufacturing company in China. With Chinese New Year around the corner, you know that families across the globe will soon be celebrating, exchanging gifts, and, of course, purchasing colorful toys for the little ones. To make sure that your toys reach stores worldwide in time for the grand festivities, you can opt for ocean freight.

If you plan well, you can cost-effectively and reliably ship large quantities of toys, such as dolls, in sturdy containers aboard cargo ships. The longer lead times of sea freight perfectly align with your advanced preparations. This allows your products to arrive at their destinations ahead of the Lunar New Year celebrations.

Unicargo – The Right Choice for Your Freight Needs

Introduction to Unicargo as a Holistic and Reliable Freight Forwarder

If you are looking to ship goods globally or internationally, Unicargo can be your trusted and reliable partner for simplifying and streamlining global logistics. With considerable experience and comprehensive industry knowledge, Unicargo can meet your shipping and logistic needs.

Global Presence and Network

Unicargo’s extensive and reliable global presence and intricate network of partners span the globe. This ensures that goods navigate international waters seamlessly. With an innate understanding of global shipping and logistics, Unicargo makes the cargo journey hiccup-free.

Complete Visibility through Digital Platform for Tracking 24/7/365

In today’s digital and tech-driven age, visibility is paramount. Unicargo offers a state-of-the-art digital platform akin to tracking a flight or monitoring a ship’s route. This provides clients with 24/7 tracking capabilities. With Unicargo, clients are always in the know about their cargo’s whereabouts.

Customer-Centric Approach

Unicargo’s customer-centric approach ensures tailored and seamless solutions for your unique needs and preferences. Whether you choose air freight for its speed or sea freight for its cost-effectiveness, Unicargo is your steadfast guide, ensuring a smooth and stress-free journey.

Unicargo takes a personalized approach, building and fostering strong partnerships with clients. The company offers quick and accurate solutions even when unexpected challenges arise.

Real-Life Success Stories – How Unicargo Assisted Businesses During Year-End Rush

Actions speak louder than words in the shipping industry, and Unicargo’s track record during the busiest times of the year speaks volumes. When the holiday rush is on and the pressure is high, Unicargo has been the unwavering partner for countless businesses and companies.

Consider a growing e-commerce business specializing in handmade holiday ornaments. As the holiday season approached, they faced the daunting task of fulfilling a surge in orders from customers worldwide. Unicargo stepped in with a meticulous plan, seamlessly coordinating the shipping of delicate ornaments via air freight. What was the result? The business not only met but exceeded customer expectations, with their ornaments adorning homes from New York to Tokyo in time for the holidays. Unicargo’s timely and dependable services transformed a potential logistical nightmare into a story of customer satisfaction and business growth.

Similarly, consider a high-end luxury fashion brand known for its exquisite and sleek handcrafted couture. With the holiday season and Chinese New Year celebrations on the horizon, they needed a partner who could seamlessly transport their high-end creations to discerning clients worldwide. Unicargo, with its mastery and insights of sea freight, ensured that the brand’s elegant gowns and accessories arrived at luxury boutiques on time.

These real-life success stories, and many others like them, illustrate Unicargo’s unwavering passion and commitment to its clients during the most demanding times of the year. When the world is celebrating, Unicargo is working tirelessly behind the scenes, transforming logistical challenges into success stories.

Making Informed and Prudent Decisions

Illustrating Year-End Dilemmas Faced by Businesses

Q4 Rush for Holiday Season Stocking

Imagine you are a toy retailer gearing up for the holiday season. You are pressed for time, and air freight is like Santa’s sleigh, ensuring your products land on the shelves before the festive frenzy.

Planning for Chinese New Year and Spring Sales

Now, assume it is October or November, and you are a clothing manufacturer preparing for next year’s spring sales. With the luxury of ample lead time, ocean freight is the prudent and pocket-friendly choice, offering cost-effectiveness and reliability.

The Role of Unicargo in Providing Solutions

In both scenarios, Unicargo can be your unwavering and dependable partner, ensuring your goods reach their destination smoothly and punctually in the most cost-effective mode, aligning with your business goals and needs.

Final Thoughts

The choice between air and sea freight for your cargo depends on your supply chain strategy. It’s often a conditional decision and multi-modal solutions are common. It is vital to consider these options carefully, as the suitability of air freight vs. ocean freight greatly depends on your specific cargo and shipping needs.

Various criteria, such as speed, reliability, cost, and environmental impact, influence this decision. It’s crucial to consider all factors, not just one, when making supply chain decisions. At the end of the day, you’re running a business and have goals and deadlines to meet.

Air freight excels in speed and reliability, making it ideal for precious products or items with short shelf lives. However, it comes with higher shipping charges. Ocean freight offers cost advantages but has longer transit times.

If you’re unsure about the best choice, consulting an international shipping expert like Unicargo can help you find a suitable solution for your delivery needs and help you navigate the complexities of this air freight vs. ocean freight decision, ensuring your cargo’s journey is safe and optimized to meet your goals and budget.

The post Air Freight vs. Ocean Freight – Which is Right for Your Business? appeared first on Unicargo.

How to Navigate Peak Season Shipping

We Asked 5 Experts!

Are you an e-commerce seller or a wholesale distributor who’s ever felt the icy grip of panic as peak shipping season looms large?

Not prepping for it can wreck your business. So, how to successfully navigate peak season shipping?

It’s simple. An efficient shipping strategy is the key to boosting conversions and keeping customers happy amidst the shipping frenzy.

In this article, we’ve partnered with five experts, including Amazon pros and e-commerce gurus, to supercharge your freight strategy, by sharing some key peak season shipping tips. Besides, we’ve also got our own killer tips. But first, let’s understand peak shipping season and its hurdles.

Key Takeaways: Navigating Peak Season Shipping

1. Predict Demand to Stock Up on Inventory – To handle peak season, predict demand by looking at past sales and trends, watch out for industry and economic changes, and monitor competitors. Also, stock specific items for seasonal demand and track inventory.
2. Prepare Your Website for Visitor Surge – Prepare your website for the holiday rush, work with IT to boost speed, focus on mobile-friendliness, and provide mobile payment choices. Create a branded tracking page for shipping updates; consider a minimum order for free shipping, and offer a “Jump the line” option.
3. Hire a 3PL Provider for Outsourced Fulfillment – Consider partnering with a 3PL provider like Unicargo to handle warehousing and shipping for your ongoing needs, such as transloading, amazon prepping, etc.  When transporting stock to Amazon, make sure your freight forwarder confirms appointments for delivery at Amazons’s wareshouse/s ahead of time  to ensure swift check-in and prevent detention and additional charges for unexpected delays
4. Use Geotargeting to Optimize Operational Costs – Use geotargeting to identify the fastest delivery areas and offer “expedited shipping” there, even if it’s cost-effective standard shipping. This enhances the shopping experience for customers and ensures cost-efficient logistics.
5. Choose the Optimal Shipping Method – Selecting the right shipping method depends on factors like shipment type, size, destination, and urgency. For ocean shipping, consider LCL for small shipments and FCL for more security and large amounts of merchandise. Choose air freight for urgent shipping and repeat orders for re-stocking before the holiday seaon, for example.

What Is Peak Season?

Peak season in international freight is a time when the demand for goods goes through the roof, often happening seasonally. It’s exactly like the Super Bowl but vis-à-vis the logistics industry.

Like the Super Bowl influences sports, advertising, and entertainment, peak shipping season shapes logistics and trade dynamics. In peak shipping season, surging demand due to holiday shopping affects freight rates, market availability, and the entire supply chain.

You probably got the gist. Now, let’s understand the peak season in detail.

Understanding Peak Season Shipping

As a matter of fact, peak season is a constantly shifting target, with variations in duration, timing, impact on volume, and overall scale. There are four key freight seasons in a typical year, encompassing cyclical shipping trends.

The “freight seasonality” usually refers to four distinct periods of shipping activity, which occur predictably at roughly the exact times each year. However, we will only discuss two of the busiest periods of the freight season here: The peak and the holiday seasons.

The Peak Season (Aug-Oct)

So, when is shipping peak season? It runs from mid-August to mid-October when businesses prepare for the holiday season, causing a high demand for shipping to warehouses and stores.

Freight rates and volumes also hit their peak during this back-to-school window and the beginning of the year-end shopping frenzy. The peak season is known as the busiest in freight seasonality.

The Holiday Season (Oct-Jan)

The holiday season marks the end of the freight year, creating a frenzy as both consumers and shippers demand more. From November to December, shoppers swarm both online and physical stores, while carriers and logistics partners work tirelessly to ensure smooth operations, even handling last-minute orders.

Different regions experience unique holiday patterns, like the Chinese New Year shutdown in January and February, causing supply chain disruptions.

Warehouses in the US and Europe get the busiest from October to January due to holiday shopping. Additionally, air freight has its peak season starting in late October or early November, favored for smaller, urgent shipments despite its higher cost.

If you are interested in finding out the key dates for peak shipping season 2023, check out the following table. It lists important dates, holidays, and events significantly affecting shipping demand and logistics in the 2023 peak freight season.

Date	Event
January 1	New Year’s Day
January 22-27	Chinese New Year Holidays
February 14	Valentine’s Day
February 20	US Presidents’ Day
August 15	Labor Day
August 22	Back-to-School Shopping Begins
September 5	Labor Day weekend
September 29-October 6	Chinese Mid-Autumn Festival/National Day
October 1-7	Golden Week
October 10-11	Amazon Second Prime Day
October 31	Halloween
November 23	U.S. Thanksgiving
November 24-27	Black Friday/Cyber Monday
November 25	Small Business Saturday
December 9	Green Monday
December 14	Free Shipping Day
December 16	Super Saturday
December 25	Christmas
December 26-31	Boxing Week
December 31	New Year’s Eve

Now that we’ve explained the holiday and peak seasons, let’s proceed to their challenges for businesses.

Challenges of Peak Season Shipping

Peak season shipping is an obstacle course for global freight and high-volume logistics companies. It’s a time when supply chains can feel like they’re running a marathon with hurdles, causing delays, bigger bills, and potentially some serious logistical hiccups. Here are the top challenges that come with peak season shipping:

International Freight Delays

During peak seasons, high demand often creates a traffic jam at ports and terminals, causing delays in shipping. Ships might find themselves stuck in queues, and customs clearances and cargo handling can slow to a crawl.

Take the Los Angeles and Long Beach ports in California, for instance. In 2021, there was a massive traffic jam of cargo ships, with 73 waiting outside the ports in September, almost double the number from August.

The reason? Well, as the US started opening up after COVID-19 lockdowns, people went on a crazy shopping spree, and businesses went all out to restock their products.

The Global Liner Performance Report (GLP issue 144) by Sea-Intelligence displays this scenario. It states that international freight delays were at their worst in 2021 and 2022, especially during the busiest shipping times (usually the 2nd half of the year).

Container Availability

During peak season, everyone’s clamoring for shipping containers like the latest smartphone. But guess what? There aren’t enough to go around. So, businesses might find themselves waiting for container availability or shelling out big bucks for container rentals.

In December 2021, the worldwide shipping sector was hit by critical container unavailability. This was because of the crazy-high demand for products and the lockdown disrupting manufacturing and logistics.

Higher Shipping Costs

During peak seasons, the shipping rates go sky-high. If companies haven’t locked in good shipping deals beforehand, they might get a budgetary shock. Plus, with tariffs and trade rules changing constantly, it’s like trying to predict the lottery numbers.

FedEx, for example, announced in August 2023 that their peak season charges are up from last year. They’ve introduced extra fees on bulky packages and those that require extreme care and additional costs for high-volume shippers.

Capacity Constraints

In peak seasons, carriers and businesses often find themselves scrambling for space on ships and in warehouses, and it’s even worse with the e-commerce boom. And fulfilling e-commerce orders in a warehouse? Brace yourself because it takes three times more space than just storing stuff on pallets.

A 2021 CBRE study spilled the beans. Every extra billion in eCommerce sales means we need another million square feet of warehouse space. And we haven’t even touched on peak season fulfillment yet. You can picture that yourself.

Factory Shutdowns

Some countries, like China, have long holidays called the Golden Week (Oct 1-7) when factories and businesses hit pause. But the rush starts about 3-4 weeks before the holiday kicks in. So, by September, you can already feel the demand surge.

Labor Shortages

Labor shortages in ports, warehouses, and trucking firms play havoc during peak seasons, especially the holiday season. Inadequate staffing leads to slower cargo handling and transportation, creating chaos in supply chains.

Online shopping, in particular, strains the logistics job market. In Q2 2021, a whopping 26% of U.S. job openings were in logistics. E-commerce fulfillment alone demands triple the workforce of regular warehouses, but its turnover rates are a jaw-dropping four times higher.

Inventory Management

Balancing inventory for peak shipping demands is like walking a tightrope. Too little, and you miss out on sales; too much, and your money’s tied up. Brands fear stockouts for a good reason. Supply chain disruptions caused stockouts in the past two years.

According to Adobe’s 2021 holiday report, out-of-stock messages shot up by 172% in 2021 compared to 2020 and a whopping 360% compared to 2019. Retailers not only lost immediate sales but also loyal customers due to stockouts.

In fact, 70% of consumers were ready to jump ship to other retailers or brands to avoid them.

Communication and Coordination

Efficient communication and coordination with suppliers, carriers, and logistics partners become increasingly vital during peak seasons. Any communication breakdown can result in missed shipments, stockouts, supply chain delays, and a huge amount of money wasted, further complicating the situation.

For instance, research on the US food industry found poor coordination among supply chain partners was blowing a whopping $30 billion annually.

Well, now that we’ve discussed the challenges of peak season shipping, let’s roll our sleeves and discuss their solutions.

Preparing for Peak Season with Tips from Industry Experts

Imagine you’re in the peak season chaos, winging it with your online store. Orders flood in, and you’re a frantic mess – juggling products, dealing with logistics nightmares, and facing angry customers. Chaos reigns, and your customers aren’t sending Christmas cards; they’re sending late delivery complaints.

That’s why prep is crucial for a smooth peak season in retail and e-commerce. It can be tricky, but a solid plan helps you handle surprises gracefully. Here are some peak season shipping tips, including insights from 6/7/8-figure Amazon sellers, e-commerce pros, and DTC brands. So, ready to ace your busy season? Let’s start!

Predict Demand to Stock Up on Inventory

Look at past sales and market trends to determine how much of the goods you’ll need when things get busy. Demand prediction is vital for peak season inventory management, preventing stockouts and overstocks and ensuring you meet customer demand while optimizing costs.

Stefan Ratchev, Founder/CEO of Lux Haus—a coffee-related brand of stainless steel accessories—shares how he forecasts his inventory for the holiday season: “I usually take my last holiday season’s sales and multiply them by (my total revenue this year so far / last year’s revenue for the same period) and make sure I have enough in stock on Amazon to cover that + an extra 15%.”

To explain it further, forecast this season’s online store inventory using last year’s peak season sales as a starting point. Calculate your revenue growth by comparing this year’s year-to-date earnings to the same period the previous year.

Apply this growth factor to last year’s peak season sales to predict this year’s peak season sales. Add a 15% buffer for potential demand spikes or uncertainties to be safe.

For instance, if you project sales at $12,500, stock around $14,375 worth of products to meet demand and avoid running out of stock. Here are some factors you need to consider when planning inventory:

• Check past sales records to spot trends and popular items for the upcoming peak season.
• Keep an eye on industry trends, especially in fashion, to stay in the game.
• Be ready for increased demand if you’re launching a big marketing campaign.
• Pay attention to the economy, as it influences consumer spending.
• Keep an eye on your competitors, and be ready to adapt if they make a big move.
• Some seasons call for specific items, like swimwear in summer. Regularly count your inventory to avoid over- or underselling.
• Focus on fast-selling items and use real-time data to restock quickly.
• Consider supplier rush and delivery delays when planning inventory.
• Get Your Suppliers on Board and Prep Your Team

Get Your Suppliers on Board and Prep Your Team

Make sure your suppliers can handle your demand and have backup options if needed. Share your demand forecasts with 3PL services if you use them and hire and train extra staff for tasks like packing and shipping. Also, stock up on packaging materials in advance to prevent delays due to shortages.

Ryan Davidson, Founder of Raw Juicery—a brand for organic juices—also emphasizes the importance of extra packaging during peak shipping season: “Make sure to order extra packaging materials well in advance as supplier lead times can be drastically longer during the rush.”

In addition to these proactive measures, leveraging advanced technology solutions can further enhance your peak-season operations.

Embrace Technology for Peak Season Fulfillment

To handle in-house fulfillment during peak season, ensure you’ve got the right gear, like computers, barcode scanners, and label printers. Plus, consider adding these systems to your supply chain:

• Order Management: It automates order tasks, cutting errors and boosting efficiency.
• Warehouse Management (WMS): Handles product movement and storage, making order processing smooth.
• Automated Order Processing: Speeds up fulfillment, reducing errors and keeping customers happy.
• Supply Chain Management: Helps manage goods flow, which is essential for handling peak demand.
• Returns Management: Deals with returns and refunds effectively. If you’re an e-commerce business owner, returns, or what’s called “reverse logistics” can be very important especially when trying to meet budget.  Not all logistics providers/freight frowarders offer this service.  Be sure to to know your freight forwarder has this capability, because sooner or later you will need it.

Using these systems sets you apart from competitors and ensures top-notch service and delivery quality during busy times. However, if handling all these systems seems overwhelming, Unicargo’s ecosystem offers a flexible and customized fulfillment solution that can grow with your needs.

Elevate Service and Delivery Quality

Gio White, Head of Marketing Taos Footwear, shares how delivering the products on time is as crucial as its quality:

“For eCommerce sellers, mastering peak-season shipping is pivotal. A proven strategy is to work backward from key holiday deadlines, pinpointing the ultimate dates shoppers need their packages. It’s essential to communicate these deadlines clearly and assure customers of our commitment to meet them, creating a sense of urgency and boosting conversions. This assurance, woven seamlessly into all forms of communication—emails, SMS, social media, or ads—acts as a potent marketing message, reinforcing reliability and encouraging purchases. In today’s competitive market, delivering on time is as crucial as the quality of the products we offer.”

Simply put, missing shipping deadlines can make customers unhappy, get you bad reviews, and cost you sales. So, during the holiday rush, figure out the crucial dates for customers to get their orders on time. Make sure to clearly tell them through your website, emails, texts, and social media.

This urgency will let customers know the last order dates for holiday delivery. Also, promise them that you’ll meet the deadlines. This builds trust and boosts sales since people buy when they trust their orders will be on time. Here are some more tips to stand out among your competition:

• Boost warehouse efficiency with layout upgrades, real-time inventory tracking, and quality control to minimize errors.
• Use automated address validation for error-free deliveries, especially during busy times.
• Keep in touch with your warehouse team, address issues promptly, and adapt to changing conditions.
• Prepare for surges in orders during peak days like Black Friday and Cyber Monday.
• Offer diverse shipping choices, including express and eco-friendly options.
• Provide live tracking and regular order updates for a smoother shopping experience during the holiday rush.
• Ensure your website can handle high traffic and is mobile-friendly for easy product discovery and purchasing.

Prepare Your Website for Visitor Surge

Managing shipping during holidays and the busy season is also based on how well-rounded your website is. You’ll get increased website traffic, so leverage that chance to ensure your online retail channels are well-prepared for the surge in visitors. Here’s what you can do:

Collaborate with IT and developers to prevent slow website loading during high traffic.

Mobile devices make up about 50% of global internet traffic. This percentage keeps on increasing, especially during the busiest quarters of the year.

Therefore, prioritize mobile-friendliness on your site, as one-third to half of shoppers use mobile devices. Also offer mobile payment options (e.g., PayPal, Stripe, Google, Apple Pay).

When sprucing up your site for peak season, Ryan Davidson, Founder of Raw Juicery, partakes a golden strategy for creating a branded tracking page:

“Make sure your store’s shipment notifications are updated in a way to better manage customer expectations during this time. Create a branded tracking page if you haven’t done so already that answers common shipping-related questions.”

The idea is to create a branded tracking page with precise shipment info on your site. Answer FAQs about shipping times and how to reach customer support. This transparency will boost customer satisfaction.

John Webber, Founder/CEO of Carved— a company that deals in bespoke wooden accessories—

advises an online store feature for e-commerce sellers to minimize disruption to their regular operations while generating extra revenue during peak seasons:

“Consider offering a “Jump the line” upgrade during the holiday season. Have the customer add the “Jump the line” product to their cart, and then you can easily filter these orders in your OMS. Have your team just process these first, and you’ll have minimal operational impact, but you’ll generate additional revenue from customers who need gifts as fast as possible.”

So, think about offering a “Priority Processing” upgrade on select items for the holidays. Customers can pay extra to move their orders to the front of the line.

Your OMS can identify these orders, allowing your team to handle them without disrupting operations. This will lead to customers receiving their packages quickly.

Be ready for returns as well because they can go up during the busy season. So, have a smooth process for handling them.

Handle Returns Smoothly

Handling e-commerce returns in busy times can be tough due to various reasons. Yet, a solid return policy can boost customer loyalty and repeat sales.

A company’s return policy matters to 67% of customers, as per Business Insider. Therefore, it’s crucial to incorporate the following elements for a customer-centric return policy:

• Simplify your policy language and offer a clear, step-by-step guide.
• Provide free return services to align with industry norms; not doing so may drive customers away.
• Offer the choice between cash refunds and store credit; store credit encourages reinvestment.
• Communicate refund processing timelines for customer financial planning.

After handling the essentials for peak season, the next focus is efficient freight management. The aim: smooth shipping despite surging demand, all while being cost-effective and impressive.

Optimizing Your Freight Shipping Strategy with Tips from Industry Experts

Optimizing your freight shipping strategy involves hiring a 3PL provider and optimizing warehouse space. It also includes identifying the fastest delivery areas, selecting the optimal shipping methods, and optimizing last-mile logistics.

Hire a 3PL Provider for Outsourced Fulfillment

Handling seasonal demand alone is hard, and renting a warehouse is costly and time-consuming. So, consider a third-party logistics (3PL) provider for warehousing and shipping.

This lets you grow your operations for higher demand while focusing on your core business. Here’s how partnering with a 3PL provider like Unicargo can ease the holiday chaos:

• Provide technology benefits and business monitoring on one platform, monitoring several warehouses on a global level (not all logistics companies have this capability).
• Manage COD orders and settle transactions quickly.
• Handle order fulfillment for you and manage orders from multiple sales channels.
• Offer multiple eCommerce warehouses and smart inventory placement, and real-time monitoring.
• Ensure speedy same-day and next-day delivery. Ryan Davidson, Founder of Raw Juicery, also agrees with this point. “Use a fast and reliable shipping manager that helps you save money on shipping and offers a broader range of shipping speeds, including 1 day and same-day.”

Davidson stresses that e-commerce sellers need a fast, reliable shipping manager to save money and provide various delivery times, including same-day and 1-day options. This ensures you can give your customers quicker shipping choices while managing your shipping costs effectively.

Jon Tilley, a 7-figure seller on Amazon and CEO of ZonGuru, shares a great strategy for picking delivery partners with “Amazon live unload” capabilities.

“As we head into Q4 when you are transporting stock from your 3PL or warehouse to Amazon, look for delivery partners that have “Amazon live unload” capabilities. It may be slightly more expensive, but it guarantees that your stock will immediately get checked into an Amazon warehouse when it arrives, vs. it potentially sitting outside the warehouse for many days, waiting to get checked in! During high season, this is one of the key tactics that you can leverage to re-stock quickly and avoid stock-outs.”

Imagine you’re dealing with a hot holiday product and need to send stock to Amazon for the busy season. Now, choosing a delivery partner without “Amazon live unload” might mean your stock waits outside for days before being checked in. This wastes valuable time during the peak season.

On the other hand, paying a bit more for a delivery partner with “Amazon live unload” ensures your stock is checked in immediately upon arrival at the Amazon warehouse.

This way, you can restock fast and avoid running out of inventory when customers are eager for your products. Next, rank shipments by importance and transportation mode.

Prioritize Crucial Shipments

Identify the shipments that are time-sensitive or have strict deadlines. These could be your hottest products or ones that have already been pre-sold. Here are some tips to prioritize crucial shipments:

• Maintain open communication with warehouse and shipping partners, informing them of high-priority peak-time shipments.
• Establish clear shipping guidelines for your team and vendors to ensure timely and complete deliveries.
• In busy shipping seasons, distribute shipments to maintain a steady supply, especially useful for Less than Container Load (LCL) shipping.
• Arrange proper warehousing at the destination before the peak season rush if needed.
• For quicker and smoother deliveries, think about using transloading services.

Utilize Transloading Services

After your international shipment arrives, it’s often better to send it to one warehouse instead of multiple ones. It simplifies delivery management and reduces hassle. To enhance shipping efficiency and cost-effectiveness, utilize transloading services through your 3PL provider.

They involve transferring goods between transportation modes, optimizing routes, and saving costs. For example, goods arriving by ship can seamlessly switch to trucks for the final leg of the journey.

This approach offers flexibility during congested periods and enables shipment consolidation, improving cost efficiency. To further streamline your logistics operations and minimize expenses, consider using geotargeting techniques to optimize operational costs.

Use Geotargeting to Optimize Operational Costs

John Webber, Founder/CEO of Carved, offers an expert tip for using geotargeting on the fastest delivery areas to optimize operational costs.

“Research your fastest delivery areas. You could use simple geotargeting to offer visitors in that area free “expedited shipping.” You can still use a cheaper method because you’ll know it arrives quickly.”

Let’s say you have a US-based online store that designates certain suburban zones around major cities as the fastest delivery areas during the holiday season.

In one of these zones, Customer A selects the free “expedited shipping” option at checkout. Leveraging the proximity of your distribution center, you utilize cost-effective standard ground shipping, ensuring a 2-day delivery that aligns with their expectations.

This approach offers a premium-sounding “expedited shipping” choice, enhancing the shopping experience, all while maintaining cost-efficiency through well-informed logistics.

However, you’ll want to ensure that your geotargeting strategy for optimizing operational costs works seamlessly. So, choosing an optimal shipping method is crucial.

Choose the Optimal Shipping Method

Different shipping methods like ground, air, sea, and express couriers have unique advantages and drawbacks in terms of cost, speed, reliability, and product suitability.

To choose the right one, consider your shipment’s type, size, destination, and delivery urgency. Ground shipping is cost-effective but slower, air freight is fast but costly, and sea freight is economical but slower.

If you’re sea freight, you must know that ocean shipping peak season is subject to higher demand and prices in the third quarter. Add to it container shipping seasonality during the same quarter, and this culminates in higher ocean container rates.

This is because retailers build up inventory before the bustling fourth-quarter holiday season, causing high demand and low container supply. Despite this, ocean freight remains economical if you plan correctly and factor in longer delivery times. Container shipping offers two choices: LCL and FCL.

• LCL (Less than Container Load) shipping is cost-effective for small shipments, even during peak seasons, as ocean/air freight costs are minimal. However, it carries higher risks of damage and delays due to consolidation with other shippers, as goods wait for container filling before departure.

• FCL (Full Container Load) shipping is another option for peak season, which means filling a standard cargo container. It comes with a flat fee for the entire container, regardless of its contents. Though it’s more expensive than LCL, it offers the advantage of securing goods in a sealed container, lowering the damage risk.

FCL and LCL shipping costs include pickup (container collection) and origin terminal handling (port loading). They also consist of ocean/air freight (transport to the destination port at a flat fee) and destination terminal handling (port unloading).

Additionally, when shipping several containers, make sure to consult with an experienced freight forwarder / logistics provider that knows the ins and outs of the challenges and has the expertise needed to assure efficient and cost-effective shipping methods and trade lanes.  Hint, it’s NOT just about getting the cheapest quotation up front.  There is a lot of “reading the small print” that needs to be done prior to making a decision.

Select Your Freight Forwarder

Start with research when selecting your freight forwarder. Look online, ask industry peers, and assess their peak season experience with client referrals. Choosing a forwarder with a global network and partnerships with major carriers is essential because they can offer competitive pricing. Also, check whether they are accredited and have an international freight forwarding license.

Once you shortlist a few, get detailed price quotes and compare them. Establish clear service agreements, including deadlines and backup plans for surprises, and ensure they’re customs-savvy. Trust is paramount, as some freight forwarders may switch carriers at the last minute for better deals.

On the other hand, digital freight forwarders like Unicargo stand out due to their trustworthiness, especially for e-commerce businesses. They excel in speeding up and simplifying shipping processes, even during busy periods. Unicargo’s massive network of partners also means competitive prices and a lot of choices for saving time and money, not to mention the expertise they provide, being one of the First logistics companies to service e-commerce business owners when this niche just started to boom.

And the cherry on top? Everything is handled in one place. You’ll only have to interact with one person from the initial quote to the shipping, making the whole process smooth and convenient for you.

But remember to share your shipment plans with your freight forwarder  especially during peak times or sales. And don’t forget to get damage and RTO insurance for international shipments to protect against theft, losses, and Return to Origin cases. Finally, optimize last-mile logistics.

Optimize Last Mile Logistics

Last-mile logistics is the tricky and costly final leg of delivering goods from a warehouse to a customer’s door. Especially during peak times, finding carriers for high-volume last-mile deliveries can be challenging when the logistics system is already strained.

To streamline and save, offer flexible delivery options and partner with multiple carriers for cost-effective rates. Keep customers informed with real-time tracking to reduce missed deliveries.

Also, improve accuracy and efficiency by minimizing picking errors, using nearby stores as hubs for shorter distances, and shipping goods out early to expedite the process.

Ship Goods Early

During peak seasons, securing space on carriers is tough because capacity is in high demand. To make sure you get the space, book well in advance. The “Cargo Ready Date” can help you determine when to book.

It is the date when your cargo is packed, labeled, documented, and ready to hand over to the freight forwarder by this date. Don’t miss this deadline; for instance, book ocean shipments at least four weeks before Golden Week.

But since the peak season in 2023 is here, you might want to consider booking air freight instead of ocean shipping because it’s the quickest option.

Conclusion

Navigating a peak shipping season successfully boils down to preparation, a well-thought-out freight strategy, and expert insights. However, Unicargo can help you achieve this level of preparedness and efficiency in less time, no matter the size of your business and shipments.

We can handle your entire e-commerce supply chain, from warehousing and inventory to pick and pack and automated shipping. Our vast experience and deep expertise, our “boots on the ground”- global teams at ports, our strategic global warehouses (in China, Europe, and the U.S.) accompanied by our digital tracking capabilities not only make us a “one stop shop” but more importantly offer you peace-of-mind and simplicity. Your job is to grow your business, OURS is to handle your logistics efficeintly and assure you’re ready to deliver your goods smoothly and on  a timely schedule.

The post How to Navigate Peak Season Shipping<br>We Asked 5 Experts! appeared first on Unicargo.

Ready for a quick test of your Amazon product development and logistics know-how?

Your best friend, who lives in Australia and dabbles in selling through Amazon FBA, messages you about his brainstorm for his next product. His 4-year-old daughter had been gabbing in excitement about the upcoming Barbie movie, and, in a flash of inspiration, he knew what his next product would be: a ride-on toy for young children modeled after Barbie’s car. Your friend already called manufacturers in China and checked with freight forwarders about delivery rates to Amazon FBA centers. All the numbers and timelines checked out, and he’s sure this is going to be a huge success.

Well, maybe.

How can getting this product to an Amazon fulfillment center go wrong? Let us count the ways.

Problems That Could Stop a Product at the US Border

The US Customs and Border Protection doesn’t play games. In 2022, they seized over $62 million in imports that didn’t meet their safety regulations, and $2.9 billion in imports that violated intellectual property regulations.

Safety regulations

A wide range of imported products are subject to safety regulations in the USA, including consumer electronics, toys and children’s products, household appliances, sporting goods and many other product categories. In addition, products containing materials with potential hazards have their own safety regulations and restrictions.

The first thing you need to consider when product sourcing is: which PGA (partner government agency) will be regulating it, and what are their standards and regulations regarding imports? In this specific case, the primary PGA involved would be the CPSC (Consumer Product Safety Commission), which deals with issues of product safety, but if your product involves food, animals, plants, textiles or restricted substances, more agencies will enter the picture.

Your friend’s Barbie-car-inspired ride-on toy is intended to be used by children under 5, making it subject to a whole host of regulations and requirements for materials sourcing, testing and certification.

Relevant regulations include (but are definitely not limited to!):

• conformance to the ASTM F963 standard for toys

• use of materials that do not contain certain plastics (or certain concentrations of specific plastics)

• initial product testing by a CPSC-accepted laboratory who can issue a Children’s Product Certificate

• conducting periodic testing to ensure continued compliance

• affixing a tracking label to the product, including details such as manufacturer, date and location of production, batch number and other identifying characteristics

If anything goes wrong (like for one seller we knew who tested her children’s card game product and found that the Chinese manufacturer had used a toxic (!) coating), your whole pile of manufactured goods is useless.

Intellectual property regulations

If a product uses brand names, logos, designs, or distinctive features without proper authorization from the trademark owner, it may be infringing on IPR (intellectual property regulations). Goods with this problem will likely be seized at the border and possibly destroyed.

If your friend’s Barbie-inspired car is directly or obviously associated with Barbie (and that was the whole point, right?), then it will need proper authorization for use, or the shipment will be seized by customs.

Missing importer documentation

If you’re not an American citizen[REU1] , or operate as a U.S. company, you need to have an official, recognized representative for your imported goods. This entity or individual is known as an Importer of Record (IOR) and is legally accountable for accurate documentation, payment of duties and taxes and adherence to import requirements.

Your Australian friend will need a legal, reliable Importer of Record for his ride-on toys, or his shipment is likely to be rejected at the border for lack of complete and appropriate documentation.

Why do these things happen?

A major cause of these problems, as we’ve observed from long experience as freight forwarders for Amazon FBA (we’ve been shipping there since FBA launched!), is that sellers don’t have a holistic picture of their Amazon product development and supply chain process.

The typical seller views each step in the process – product design, materials sourcing, manufacturing, regulatory compliance, inventory management, shipping – as an independent, almost self-contained entity. Of course, the seller needs help for each step, so they enter transactional relationships with manufacturers, freight forwarders for Amazon, customs brokers, and similar professionals to perform the tasks related to their particular step.

But there is no holistic overview of the supply chain. No advance planning that considers how all the pieces connect to each other – and how to best connect them in order to achieve optimal results, avoid problems and increase profits.

That’s a shame… and it could lose you the game.

Don’t go at it alone

How can you give yourself the best opportunity for success as an Amazon FBA seller?

Get yourself a partner in holistic Amazon supply chain planning from the outset!

We do this for so many of our Amazon FBA sellers. A potential customer contacts us, expecting a traditional freight-forwarding transactional relationship: here’s what I’m shipping and where I’m shipping it to; give me a price and get to work. But then we take a good, hard look at their production and supply chain – and start making suggestions that can streamline their product sourcing, manufacturing, and logistics, minimize risk and increase their overall profit. This Amazon product development consulting is one of the most satisfying parts of our business!

Streamlining Regulatory Compliance

When you start with a comprehensive understanding of the regulatory requirements for the product niche you’re considering, even before you take any concrete production steps, you will often save yourself untold heartache and waste of resources.

A partner who has a holistic picture of the regulatory landscape can positively influence your:

• Product materials sourcing

• Certification process

• Packaging and labeling

• Customs coding[REU2]

• Compliance with PGA-specific requirements

This proactive approach mitigates the risk of rejections, delays, or penalties during customs clearance.

Optimizing Supply Chain for Profits

If you make a chain from taking a bunch of disconnected, pre-built elements and linking them together only where they absolutely need to touch, you are going to get an ugly, clunky result.

The same goes for your Amazon product development logistics. However, when your Amazon product sourcing process is strategically aligned with your supply chain management and freight forwarding, logistic magic can happen. A logistics partner who possesses and can grant you a birds’ eye-view of the what, when, and how of your entire supply chain can enable you to:

• avoid stockouts

• optimize shipping costs

• reduce excess inventory – for materials and for the finished product, both in its country of origin and its destination

All of those elements can have a direct impact on profit. If, for example, your entrepreneur friend was able to design his ride-on toy from the outset for efficient shipping (taking dimensions, mass and volumetric weight into account), that could significantly increase his profit margin.

If you want to succeed…plan, plan ahead.

It would be a shame to have to go the “if at first you don’t succeed – try, try again” route if you don’t absolutely need to.

Invest a little time at the outset of your Amazon product sourcing journey. Develop a relationship with a partner who has expertise in Amazon product development consulting. Put together a plan that aligns all aspects of your product development logistics, from sourcing to supply chain to freight forwarding.

Now you’re ready. You have an integrated plan; you have an expert partner; you’re all set for a smooth, streamlined path to market.

Dominate Amazon FBA – with the right logistics partner.

The post From Concept to Customer – The Overlooked Factor in Amazon FBA Product Development appeared first on Unicargo.