Definitions

shipping pneumonia

Shipping

[ship-ing]

Shipping is physical process of transporting goods and cargo. Virtually every product ever made, bought, or sold has been affected by shipping. Despite the many variables in shipped products and locations, there are only three basic types of shipments: land, air, and sea.

Land or "ground" shipping can be either by train or by truck. Trucking is easily the most popular form of shipping. Even in Air and Sea shipments, ground transportation is still required to take the product from its origin to the airport or seaport and then to its destination. Ground transportation is typically more affordable than air shipments, but more expensive than shipping by sea. Trucks are also much faster than ships and rail but slower than planes.

Many trucks will take freight directly from the shipper to its destination in what is known as a door to door shipment. Vans and trucks of all sizes make deliveries to sea ports and air ports where freight is moved in bulk also.

Much shipping is done aboard actual ships. An individual nation's fleet and the people that crew it are referred to its "merchant navy" or "merchant marine". Merchant shipping is essential to the world economy, carrying the bulk of international trade. The ships are also extremely expensive constructions themselves, being some of the largest man-made vehicles ever. The term originates with the shipping trade of wind power ships, and has come to refer to the delivery of cargo and parcels of any size above the common mail of letters and postcards.

Ground shipping can be cheaper and less restrictive to size, quantity, weight, and type of freight than by air transport. Air transport is usually reserved for products which must be sent within a shorter time frame. Some carriers offer ground shipping that operates on an exact timeline as air does. This is a recent development becoming mainstream among major carriers since the late 1990s. UPS and FedEx both offer guaranteed day ground shipping.

Shipping can more generally refer to the transport of freight ("shipments"), independent of the mode of transport.

Billing methods

The most common trading terms used in shipping goods internationally are:

  • Freight on Board OR Free On Board (FOB): freight on board means that the exporter delivers the goods at the specified location. Example, FOB Kunming Airport (the exporter delivers the goods at Kunming airport). This means exporter is bound to deliver the goods at the Kunming Airport at his cost and expenses. In the case, the freight and other expenses for outbound traffic is borne by the importer.
  • Cost and Freight (C&F,CFR, CNF): (With insurance payable by the importer). The exporter pays the ocean shipping/air freight costs to the specified location. Example, C&F Los Angeles (the exporter pays the ocean shipping/air freight costs to Los Angeles). Many of the shipping carriers (such as UPS, DHL, FEDEX) offer guarantees on their delivery times. These are known as GSR guarantees or "guaranteed service refunds". This means that if the parcels are not delivered on time, the customer is entitled to a refund on the shipping cost. UPS, DHL and FEDEX make it difficult however for customers to determine which parcels are late and request their refunds, and thereby allow approximately 90% of potential refunds to go unclaimed. That amounts to over $1 billion USD per year in unclaimed refunds.
  • Cost, Insurance, and Freight (CIF): Insurance, and Freight are all paid by the exporter to the specified location. Example, CIF Los Angeles (the exporter pays the ocean shipping/air freight costs to Los Angeles including the insurance).

See also

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