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When I speak with exporters, they tell me two of the biggest challenges they deal with are understanding and controlling export shipping costs.
Tom Hullinger, president of Jordan Global Logistics in Orlando, Florida, and Joseph Giranda, West Coast sales and operations manager at CFR Rinkens, are both in positions where they see mistakes in these areas regularly. Below, they share some of the most common shipping blunders and what you can do to prevent them.
According to both Hullinger and Giranda, it is critical to understand export rules and regulations before you ship a single item. Restrictions abound depending on where you’re exporting, and success in this business hinges on your level of knowledge about what the regulations look like both in the United States and in the country or countries you’re shipping to.
Ignorance of export regulations leaves you vulnerable to product seizures or fines and penalties.
Ignoring export compliance procedures, according to Giranda, is the one thing that will halt your exports. If you fail to adhere to export rules and regulations (and import rules and regulations in the country you’re shipping to), you risk shutting down your export business.
Giranda notes that, for the most part, everything else can be worked through. For instance, issues of logistics can be solved with money. However, the important thing—export compliance—can’t be solved with money. It requires doing the work correctly.
Once you have a thorough understanding of export regulations, you can begin understanding and controlling the variables associated with export shipping costs, which include:
How quickly do you need to move your goods? Faster is generally more expensive.
Ocean cargo is less expensive than air cargo, for example, but if you’re shipping something of high value or perishable goods that can’t sit in a boat container for 45 to 60 days, your options are limited.
A labor strike in Los Angeles that results in a port closing operations will change everyone’s costs.
The more cargo you move, the more expensive the shipping. But if you plan properly, you can consolidate your goods as much as possible and reduce the total number of shipments you must make.
Some carriers may specialize in exports to certain locations, allowing them to offer better prices for shipping.
The more you need to ship, and the larger your goods are, the more you will have to pay.
Fluctuations in fuel prices will play a part in determining how much you pay for export shipments.
Both Hullinger and Giranda say that you often get what you pay for in export shipping. Although a cheap rate may sound appealing, there is always a tradeoff. You may pay more for a vendor who carefully loads and unloads your goods, who attends to your specific needs, and who helps with your export documentation. Any upfront savings might be offset by additional expense on the back end.
Don't just hire the first freight forwarder, customs broker, or other vendor you find. Do the research so you find the right partners. Take into consideration what’s important to you, read reviews, ask for testimonials, speak with other customers, and then interview the candidates you are interested in.
This is one of the biggest mistakes exporters can make. Shop around. Compare rates and the services that are included. If you limit yourself to the first freight forwarder you talk with, you may not get the best price for shipping or the best advice and support in meeting documentary, regulatory and other requirements.
Price shop and interview several companies. Using one company exclusively locks you in, but shopping around can give you access to multiple carriers and help you find the best possible pricing with an array of carriers.
Shipping rates are constantly changing, and if you settle on one rate for all shipments, there’s a good chance you’re not getting the best deal.
Don't be afraid to ask your freight forwarders and other vendors to provide new bids even on established shipping routes. Check often to make sure you’re getting the best current rate.
If you use ambiguous descriptions (including internal company descriptions or codes/numbers) on your commercial invoice, customs officials, or regulatory agencies may incorrectly decipher your goods, which could lead to items being misclassified.
The same could happen if you don’t provide correct, clear details for commodity and country of origin. As a result, brokers or officials may classify your goods wrong and throw it into higher duty rate. This could lead to a higher cost structure or even delay your shipment.
Put the right information on your invoices. You'll find a description of some of the most important information you need in this article: 10 Items That Belong on Your Commercial Invoices.
According to Hullinger, one common mistake exporters make is banding and shrink-wrapping several small boxes on several different pallets.
Consolidate. Shipping a pallet isn't free. The more pallets you use, the more it costs to ship. Don’t use more pallets or other shipment packaging than you need to use. If you can put all your boxes on one pallet, you'll reduce the weight and volume of your shipment. That will save you money.
Condense your goods so they are as small as possible in a box, and eliminate as much weight as possible so you’re charged for shipping the item and not excess packaging.
The international trade terms known as Incoterms define which parts of the export shipment the seller and the buyer are responsible for. (You can download a free Incoterms 2010 Chart of Responsibilities that details who pays for what under each of the individual Incoterms.) Too many exporters agree to a specific term without knowing what additional costs they are agreeing to pay and without building those additional costs into the price of their goods.
For example, some exporters agree to the Incoterm Delivered Duty Paid (DDP), which means they are responsible for all costs incurred in delivering door to door, including all duties and taxes. While this may be an appropriate business decision (see the article, When Exporters Should Use the Incoterm Delivered Duty Paid (DDP)), the U.S. exporter may not understand what they are agreeing to.
Be mindful when you negotiate the trade term you will use, and make sure any additional costs are incorporated in the negotiated price of the goods.
| Product Model | Inside Diameter | Outside Diameter | Thickness |
| MR62-ZZ bearing | 2 | 6 | 2.5 |
| MR62-ZZC3 bearing | 2 | 6 | 2.5 |