Sea freight operations allow businesses to ship their bulky cargo economically and with a lower carbon footprint. To capitalise fully on the benefits of this mode of transport, certain tasks need to be completed. If not, there is the potential they will lead to sea freight failure, which can stop managers from achieving their targets. Poorly defined incoterms, inappropriate documentation, deficient packaging, incomplete communication and spot dealing are 5 main reasons. These reasons increase cost, delay the shipment and have a negative impact on brand image. All these reasons have an individual impact on sea freight and need special knowledge and attention. Many CEOs and Operations Managers in Australia understand that these situational reasons occur frequently and outsourcing to a professional freight forwarder in Australia assists them in eliminating these reasons to avoid sea freight failure.
Read on to learn 5 reasons for sea freight failure and how a professional freight forwarder can assist your business to eliminate them.
1) Poorly defined Incoterm
Incoterms play an important role in deciding cost, risk, and tasks associated with international freight transportation between both the buyer and seller. This highlights how important it is to determine your incoterm carefully and mutually. Choosing the wrong incoterm can be the reason for delays and high costs and it is possible that you will end up with a dispute between with your supplier. To avoid this situation, smart business owners consult their freight forwarder prior to deciding their incoterm. Established sea freight forwarders understand that for healthy business relationships, the choice of incoterm should be convenient for both the businesses and make the purchase transaction a win-win situation for both businesses.
2) Inappropriate documentation
In an international movement of goods, documents represent the shipment. Therefore, all the documents must be well-drafted to fulfill all the customs as well as government rules and regulations. Inappropriate and incomplete documents lead to cargo detention, delayed shipments and increased costs. Drafting the appropriate documentation requires in-depth knowledge and skills. Being in the industry for years, freight forwarders in Australia have in-depth knowledge as well as awareness about practical challenges. Alignment with freight forwarders that share knowledge allows you to complete your documentation process completely, accurately and in a timely manner.
3) Improper packaging and stuffing
Sea freight is considered a long-haul transportation medium. This makes it obligatory for importers/exporters to pack and stuff the cargo to ensure safety, proper handling and the maximum space utilization. Failing in packaging and stuffing your cargo efficiently increases the chance of damages, occupies extra space and increases cost. Alongside, few countries have specific packaging norms and failing to fulfill the norms will detain the cargo. Outsourcing your freight operation to a professional freight forwarder eliminates all these challenges. These freight forwarders choose the most suitable packaging and stuffing methods to ensure minimum wastage with maximum space utilization.
4) Improper communication with freight forwarder
Effective communication with your freight forwarder is a game changer. In sea freight, essential components like cargo mode (FCL or LCL), incoterm, port of origin, port of destination, cargo dimension, weight, and HS-codes must be defined prior to the booking. Any mismatch in the data at the time of stuffing or customs clearance detain the cargo and impose a heavy penalty. To avoid these situations, proper communication with your freight forwarder is essential. When booking your freight, your freight forwarder must have all the essential information, which allows them to plan your sea freight operation in best suitable conditions. If communication with your freight forwarder is not optimal, it is worth considering alternative companies.
5) Spot dealing with freight forwarder
Features like low per unit cost, large carrying capacity and a lower carbon footprint make sea freight a widely used and evergreen transportation system. These advantages make this mode very popular with businesses. Spot booking cargo at last minute may present a space crunch situation and result in higher freight cost. Additionally, communicating all your requirements regarding documentation, lead times, packaging, communication, information and other terms and conditions at the last moment may result in a freight forwarder not understanding the scope of the shipment thoroughly and hence failing to meet your expectations. Signing a yearly contract with your freight forwarder has benefits that include space security, stable freight rates and makes your expectations very clear to the sea freight forwarder.
Sea freight failure lowers your order fulfillment rate and incurs additional cost. All the reasons have individual impacts and respective solutions, but alignment with an efficient freight forwarder in Australia allows managers to get all the solutions at one stop shop. To manage these potential failures, professional sea freight forwarders, such as BCR, develop well-planned and executable operational strategies, which help business managers to eliminate all these chances of failure.
For more than a century, BCR has continued to help small, medium and large businesses achieve an optimum logistics solution with warehousing and transportation, including air freight and sea freight services to and from the major ports including Brisbane, Sydney, Melbourne, Adelaide and Fremantle (Perth).