Author name: Palle

The CFR Incoterm Guide: When Cost Doesn’t Equal Risk explains how Cost and Freight (CFR) works in international trade and why paying for transport doesn’t always mean assuming responsibility. Under CFR, the seller covers the cost of shipping goods to the buyer’s port of destination, but the risk transfers much earlier—once the goods are loaded onto the vessel at the port of origin. This distinction often surprises buyers, as they may assume that because the seller pays for freight, they also carry the risk until arrival. The guide emphasizes the importance of clearly understanding these rules to avoid disputes, unexpected liabilities, or gaps in insurance coverage. It also offers practical advice on when to use CFR, its advantages and limitations, and how businesses can better manage risks through proper contracts, insurance, and communication with logistics partners.

Learn how to find out which is a better deal: FedEx Ground Economy or FedEx Home Delivery. This will help

Terminal Handling Charges (THC) in shipping refer to the fees imposed by ports or terminals for handling cargo during loading, unloading, and storage processes. These charges cover services such as container movement, crane operations, equipment use, and labor at the terminal. Since THC is usually separate from ocean freight rates, it often varies by port, terminal, and shipping line, and can significantly impact overall logistics costs. Understanding THC is crucial for importers and exporters, as it helps in budgeting accurately, avoiding hidden costs, and negotiating more effectively with freight forwarders. A clear grasp of THC ensures smoother cargo flow, better cost control, and improved transparency in international shipping operations.

The transfer of shipping containers from one location to another, such as between ports, train yards, warehouses, and distribution centers, is referred to as drayage. In the context of global supply chains, the function is a high-stakes logistical service that serves as the crucial connection. Its purpose is to ensure that items are transported without any disruptions between the ship and the shore and beyond. Despite the fact that drayage journeys only go within a few miles of one another, they create an essential link to the container shipping sector. This connection helps minimize congestion in ports and assures that international intermodal drayage will continue uninterrupted.

LCL (Less Than Container Load) shipping enables companies to transport small cargo loads in a cost-efficient way since the business will share the container space with other shippers, usually costing 60 less than FCL for small volumes, but taking 4-6 days more of consolidation and deconsolidation. It is best suited to SMBs with shipment volumes ranging between 2-10 cubic meters per shipment, companies operating e-commerce that require flexibility in their inventory, and companies exploring new markets, although businesses continuously shipping more than 15 cubic meters should consider FCL to provide better unit economics and expedited transit times.

Real-time shipping estimates through transit time calculators enable businesses to plan better than before through the old methods. Knowing the distinction between transit time and lead time, comparing various shipping options, including considering such variables as port congestion and customs processing, companies become better logists by considering average transit times, which saves money and enhances customer satisfaction.

When it comes to international trade, there are two very distinct ways that individuals are liable for their actions: FOB Shipping Point and FOB Destination. On the one hand, shipping point conditions confer ownership and accountability on the buyer at the point of origin; on the other hand, they expose the buyer to a larger degree of risk. Because of destination terms, sellers are obligated to protect purchasers while their items are in transit; nevertheless, this comes at an increased cost to the whole transaction. For the purpose of assisting you in carrying out your entire business plan, we recommend that you base your decision for the terms of the FOB shipment on the appropriate balance between the management of risk, the maintenance of low costs, and the maintenance of simple operations.

This all-in-one guide shows that shipping with Alibaba is cheap, with their postal services costing as little as $3–8 per kg and their more expensive express delivery services costing up to $15–25 per kg. When you order a lot of things, ocean freight is the cheapest choice, costing only 0.30–0.80 per kilogram. Combined shipping options are a good middle ground. Using experienced freight forwarders, consolidating shipments, comparing several quotes, and knowing shipping terminology like FOB, CIF, and EXW are some of the best ways to cut costs. To be successful in long-term importing, you will need to find a balance between cost, speed, and dependability. You need also build solid connections with suppliers and other logistical partners.

A CBM calculator for sea freight is a vital tool that helps shippers convert the volume of cargo into weight to determine shipping costs more accurately. Since sea freight charges are often based on whichever is greater—actual weight or volumetric weight—calculating CBM (Cubic Meter) ensures businesses can plan shipments more efficiently and avoid unexpected expenses. By inputting dimensions of cartons, pallets, or containers, the calculator provides precise CBM values, which are then converted into chargeable weight according to carrier rules. This process supports optimal space utilization in containers, improves cost estimation, and allows companies to choose the most economical and effective shipping method for their goods.

Free On Board (FOB) is an essential Incoterm that tells you when the buyer and seller change ownership, risk, and fees in international shipping. When items are loaded at the loading port, purchasers are no longer responsible for them in FOB Origin. This provides them control over the cost but requires them to know logistics. FOB Destination makes the seller responsible until the goods arrive at their destination. This is handy but costs more. The size of the firm, logistics, risk tolerance, and cost preferences will all play a role in choosing substitution variations. Knowing the terminology that goes along with FOB may help you avoid controversy, make better financial plans, and make better shipping selections. Using FOB terminology correctly and precise wording in contracts is the key to a successful partnership in international trading.