Chapter 5: Sea Freight from China to the U.S.A.
Sea freight is known to be the most cost-effective shipping method from China to the United States.
It tends to offer a lot of flexibility when shipping various types of products.
This is especially true for buyers shipping vast amounts of goods.
Shippers of bulk cargo like heavy machinery and coal to also tend to prefer sea freight.
Despite the fact that sea freight is slow, it remains to be the most popular shipping method for US importers.
Here are the basics for shipping to the US from China by sea.
5.1. Factors affecting Sea Freight from China to the USA
Like everything else, sea freight has its cycle of boom and recess.
There are times when it flows smoothly, and there are times when sea freight is just adverse.
Just like any business, several factors contribute to changes in this cycle.
Below given are these factors
1. Fluctuating fuel prices
Changes in fuel prices is a significant factor that has adverse effects on the sea freight industry.
An increase in fuel prices tends to increase the operating costs of companies in this business.
Fluctuation in oil prices – Source IIAPS
Shipping companies in this case never fail also to increase their freight rates.
The same applies to when there is a reduction in prices.
Operation costs reduce thus leading to a decrease in sea freight costs.
2. Adverse weather conditions
One of the major factors affecting sea freight operations is adverse weather conditions.
Unfortunately, weather conditions are unpredictable.
Bad weather conditions in ocean freight – Source: Port Technology
Strong winds and tides tend to make it impossible for ships to sail through the water.
Ships could sink when sailing in such conditions.
It is bad enough that ships have to pause operations until the weather calms.
3. Piracy threats
This is yet another thing that has had and continues having a negative impact on sea freight shipping to the US.
Cargo ships are continually being hijacked, and pirates demand ransoms before the releases of these ships.
Piracy threats – Source: Business Insider
The rising piracy reports have led to increasing losses in the sea freight industry.
This has also driven fear into most US importers.
Most of these importers fear to incur losses that may drive them out of business.
4. Customs and taxes
Customs regulations and taxes is an essential aspect of sea freight shipping from China to wherever.
Note that every country has its regulations.
The United States, in this case, has its own set of rules and regulations governing imports from China.
Some of these rules prohibit/restrict the importation of certain goods, i.e., alcohol, tobacco, gasoline, etc.
The set custom duties and taxes also affect the sea freight cost from China to the US.
It also tends to affect insurance fees for the same.
Generally, duties and taxes are very crucial in determining the suitability of importing from China by sea.
U.S. Customs and Taxes – Source Quora
5. Demand and supply
Freight rates are often an outcome of the interaction between demand and supply.
When supply is high costs reduce, when supply is low, freight costs increase.
When demand is high especially when leading up to Chinese holidays, prices increase; when demand is low prices reduce.
Politics affects so many things.
In the sea freight shipping, political tensions tend to affect the flow of goods, their demand and ultimately the sea freight rates.
Video courtesy: NBC News
Wars, trade agreements, sanctions, and revolutions are some of the events that impact sea freight rates from China to the US.
7. Chinese holidays
Holidays in the Asian community are very sentimental.
They are taken with great seriousness and tend to last quite long.
The Chinese New Year, for instance, is a holiday that often disrupts the sea freight business in totality.
Factories close for weeks during this period.
Workers go home early and report back late.
The Chinese New Year Holiday
Congestion at the seaports increases as importers tries to get their goods out of the country before the holidays begin.
I mean, it’s often chaos during the pre and post-Chinese New Year period.
8. Economic changes
Fluctuations in global trade and economies tend to affect the sea freight industry in various ways.
Economic downtimes usually lead to a reduction in sea freight trade activities.
These periods are often a low season for sea freight companies.
During an economic crunch, the level of trade reduces significantly across national borders.
This means that very little freight can be moved from China to the US.
It gets even worse when the dollar weakens.
this happens, the industry has to receive less regarding payment advanced to them by importers.
5.2. Main Seaports in U.S. and China
There is more to shipping from China apart from knowing how to negotiate rates and build relationships with the locals.
Port knowledge and familiarity is essential when shipping from China to the US via any water bound vessel.
Understand that there are several seaports in the US and China.
The ports all vary in type, size, and locale.
With that said, here are the;
With an estimated 40 million TEUs handled in 2017 alone, Shanghai is currently the world’s largest and busiest seaports.
Port of Shanghai
The port is strategically located in Zhejiang, and Jiangsu-lots of factories are found here.
You would also want to know that the port of Shanghai houses one of the largest automated container terminals.
It also utilizes some of the best modern cargo handling equipment and machinery.
Shenzhen seaport closely follows Shanghai in the ranks of busiest and largest seaports in China and the world.
Port of Shenzhen
This port that’s located in Guangdong provide of China is said to connect China’s hither land to the rest of the world.
Located in the yellow river basin in Shandong, Qingdao port holds the record of China’s largest transshipment center.
Most reefer shipments from China to the world is handled here.
This is all thanks to the port’s reefer handling infrastructural capability.
Before, Hong Kong seaport used to be world largest and busiest seaport.
However, the position was later taken by Shanghai after China’s decision to improve on its mainland ports.
Port of Hong Kong
This, however, doesn’t mean that the port of Hong Kong is on the down low.
The port still ranks among the world’s top 10 busiest container shipping ports.
It handled an estimated 20 million TEUs in 2016.
The port of Guangzhou is located at the mouth of the Pearl River Delta which is near Macau and Hong Kong.
It is the main seaport of the Pearl River delta.
I must say that this port is strategically located.
It sits at the confluence of the rivers Dongxiang, Xinjiang, and Beijing.
All of these regions are equipped with railway, waterway, air and expressway services.
Because of this, goods coming in and out of the neighboring provinces, i.e., Yunnan, Jiangxi, and Guangxi have to go through this port.
· Other ports
Other major ports in China that you should know include;
Main Seaports in the U.S.A.
Like China, the United States also has many seaports.
They are so many that we can’t mention even a quarter of them here.
Due to this, we will only mention a few of the main seaports receiving cargo from China in the US.
The port of Long Beach is located in the state of California USA.
It is among the largest and busiest container shipping ports in the United States.
It is also the major trade gateway for the US-Asian trade.
Port of Long Beach
The port occupies a surface area of about 3200 acres.
The Newark seaport is the main loading and offloading facility for cargo ships coming in and out of Asia.
The port is located at the Newark Bay in New Jersey.
It is often confused with Port Elizabeth and port of New Jersey.
Port of Newark
Well, these are all different seaports.
Note that Port Elizabeth and Port Newark sit side by side in the Elizabeth and New Jersey.
The port of Tacoma is a seaport in the northern parts of USA.
It ranks among the region’s top 10 largest seaports regarding cargo throughput.
Here is something that may interest you:
Tacoma seaport’s largest trading partner is China with agricultural produce being the main products of trade.
Port of Tacoma
Also in 2015, the port of Tacoma was merged with Seattle seaport to form what is now known as northwest seaport alliance.
The ports annual cargo handling capacity is estimated to be between 9 to 13 million tons.
Houston seaport is situated in the 4th largest city in the United States, Houston, Texas.
The port handles an average of 33.8 million tons of cargo annually.
Port of Houston
In 2017 alone, the Houston seaport handled an estimated 2.14 million TEUs.
The port’s main cargo handling terminals include Barbours cut and Bayport.
The port of Savannah, to begin with, is North America’s largest single container facility.
Located in Savannah, Georgia, this is not a coastal port.
It is a port located along the Savannah River, 20 miles upstream of the Atlantic Ocean.
The port’s location is just perfect as it provides for the more coastal area to load and offload cargo.
Port of Savannah
Plus, the waters upstream are often calmer compared to those of the open sea.
You should know that the port of Savannah specializes in RORO, break bulk, heavy and project cargo.
Regarding cargo handling capacity:
The port moved about 33.4 million tons of cargo and 3.8 million TEUs in 2017.
The port of New York is located along the shorelines of New York and New Jersey.
This seaport is the largest in container shipping on the east coast and the 3rd largest in the US.
New York Sea Port
It is also considered one of the largest natural harbors in the world.
In 2016 alone, the New York seaport handled over 3.6 million TEUs.
The port of Oakland is a deepwater seaport located in Oakland, northern California.
It is the 7th busiest container seaport in the US and 4th major port on the Pacific.
77% of Oakland’s seaport trade is with Asia.
So, if you are shipping from China to northern California, the port of Oakland would be your best destination.
Note however that this port does not handle or store coal and coke.
Commonly known as America’s port, the LA seaport is ranked among the top 10 largest seaports in the US.
This is based on total trade operations.
Note that the port is located in the San Pedro Bay in San Pedro, Los Angeles.
The port has 27 cargo terminals.
In addition to this, it has about 86 container cranes and 8 container terminals.
It also has about 113 miles of on-dock rail.
The seaport handles mainly electronics, automobile parts, furniture, plastics, and footwear.
Its main trading partner is China with goods coming in from mainland China, Hong Kong, and Taiwan.
5.3. Sea Freight Routes from China to the U.S.
Several routes are used to ship goods from China to the United States.
Here is a table showing some of the routes used from ports in China to the USA, their lead times and average shipping distance.
5.4. Shipping Companies from China to the U.S.
Several shipping companies operate routes from China to the US.
This variety tends to make it difficult for importers to choose a particular company to move their goods from China to the US.
Here is one thing though;
The wrong choice of carrier for your shipment can be nerve-wracking.
You may have to deal with shipping delays, damaged goods on arrival, high freight rates, longer routes, etc.
It is, therefore, necessary that due diligence is done when choosing any particular carrier for your imports from China.
Of the many things that you should factor in when selecting a shipping company, the following matter most;
- cost of shipping
- Shipping routes
- shipping lead times
You need to prioritize these items to be able to find a carrier that can meet your shipping needs.
When shipping from China to the United States, here are some carriers that you may consider;
PIL is an abbreviation of Pacific International lines.
It is a Singapore-based company founded in the late 1960s.
Currently, PIL stands as one of the largest ship owners in the Asian region.
It operates more than 150 vessels with a handling capacity of over 447,000 TEUS.
PIL operates container liner services from the Far East to the whole of Africa, Europe, and Canada, and Asia.
For the USA, PIL calls ports that are in the western coats.
These include the ports of long beach, Oakland, Seattle and Los Angeles.
The good thing about PIL is that it offers some of the best shipping rates.
Plus, you won’t have to wait too long for your goods to be delivered in the United States.
EMC which stands for Evergreen Marine Corporation is a Taiwanese container shipping company.
Founded in 1969, EMC acts as a major carrier for importers shipping from the Far East to different destinations across the globe.
This company like PIL is known to offer very affordable shipping rates and reasonable transit times.
The headquarters of the company is based in Luzhu, Taoyuan City, Taiwan.
It, however, offers its carrier services to clients from all over the world including that shipping from China to the United States.
Do you know that COSCO is the 4th largest ocean shipping company regarding TEU capacity?
Well, it is.
The company whose full name is China ocean shipping company currently one of the largest fleets of ships.
It has over 1000 ships with a capacity of 1.58million TEUS.
The company call over 1000 ports in the world.
COSCO’s headquarters are located in Beijing China.
MAERSK is a world leader in ocean shipping.
The company’s freight revenues by 2017 stood at $35 billion.
It is based in Copenhagen, Denmark but has subsidiary offices in more than 130 countries across the globe.
Hapag Lloyd follows closely in the footsteps of MAERSK in delivering quality and impeccable container shipping services.
The German company was founded in 1970 as a merger that has today proven to be one of the most successful in the shipping industry.
Today, HPL ranks 5th in TEU capacity among the largest container transportation companies.
The American president line is a subsidiary of CMA CGM shipping group.
Together with its parent company, APL is the world’s 3rd leader in container transportation and shipping.
The company currently has 150 vessels operating at terminals in ten strategic points around the world, including China.
ZIM integrated shipping company is the largest shipping company in Israel and among the top 20 carriers in the world.
The company is headquartered in Haifa, Israel but has a regional office in Virginia, US.
ZIM is a private company that is owned and by operated by Ofer brothers group.
The Swiss company MSC Mediterranean shipping company is the world’s 2nd largest shipping company regarding TEUs.
Their 2,435,000 TEUs of ocean freight in 2014 brought in $28.19 million in revenues.
MSC has its headquarters in Geneva and has operations in all major ports in the world.
NCL is a subsidiary of the Norwegian cruise line holdings.
The company was founded in 1966.
It currently has its headquarters in Miami, Florida.
Norwegian cruise line’s (NCL) acquisition of the France 1969 boasted its growth in the shipping industry.
The acquisition and conversion cost the company more than $100,000
Other carriers from China to U.S.A. include;
- YML among others.
As you make your carrier choice today, remember that needs change with every shipment.
Your supply chain needs today won’t be similar to tomorrows.
Tomorrow you may be dealing with a different budget, may need a shorter transit time, etc.
This means that your considerations on the best carrier will also change to one that suits your current shipping needs.
5.5. Sea Freight Cost from China to the U.S.A.
The thing with freight cost in this article is that we’ve mentioned it a couple of times in this article.
So, we’ll get straight to the point.
First of all, shipping costs are mainly based on the types of goods shipped, weight and volume of the goods.
Transit time also comes into play.
And usually, people consider sea freight because they believe that it is cheaper compared to other forms of transportation- which is true.
As such, the cheapest way to ship bulky goods from China to the USA is no doubt by sea.
You may be worried that sea freight is slower.
Well yes, it is a lot slower by the way.
But then, it comes with the benefit of cost efficiency and convenience.
You can ship anything by sea whether general or sensitive goods, large or small, heavy or light.
All can go by sea as it has different ways of transporting goods that require different conditions.
Now, about freight cost, which is the main ‘agenda’ of discussion in this section.
What is it?
Freight cost is the cost of shipping goods from a loading port in China to an unloading port in the USA.
It doesn’t account for costs such inland transportation and the likes.
It just involves the local charges you incur at both the origin and destination ports.
Note that in sea shipping there are two major types of loads; FCL and LCL.
Shipping companies charge in two ways.
One is where you pay very high shipping cost but low port fees upon arrival of goods.
Another is when you pay meager shipping costs but very high port fees.
For FCL shipments, the freight cost mostly depends on the destination and is often set according to the first set of terms.
Factors like the distance and cargo volumes in this case also matter a lot when calculating FCL freight costs.
When shipping a standard 20’’ FCL shipment from the port of Shenzhen to Los Angeles, you’ll incur about $2,230 to $2460 in freight costs.
From the same port to the New York seaport you incur about $2,275 to $2515.
LCL shipping works a little bit differently.
The rates for shipping less than a container load are often quite low compared to those of FCL.
They can sometimes go as low as $30 per cubic meter of shipment.
The problem is that while you may think that you are paying very little to ship an LCL load from China, you are not.
This is because what you are going to pay at your port in the US will be very high.
It may even go as far high as three times your shipping costs.
Low shipping cost, high port fees, remember?
Keep in mind that there is nothing you can do when you are faced with the just mentioned situation.
Shipping companies tend to do this because not many of you ask for proper shipping quotations.
When you fail to ask for a proper quote, it is inevitable to incur very high costs of shipping.
Luckily, today, you can easily estimate your freight cost without even consulting with any freight shipping company.
This is made possible by the freight rates calculators.
Read below to find out more.
· Sea Freight Rates Calculator from China to the U.S.A.
Yes, there are sea freight rates calculators.
If you want to avoid the shock of realizing just how much you’ve spent to ship from China to the US, well then this is it.
With a sea freight rates calculator, you can easily estimate your freight cost even before the actual shipping commences.
This way, you’ll know what is in for you if and when you decide to ship your goods from China to the US by sea.
Online sea freight calculator – Source: Freightos
Also, with estimate rates in mind, you can easily try to find ways to reduce the cost you may incur.
For instance, you can;
- Use a more cost-efficient freight forwarding agent to work with.
- Choose a more direct shipping route (they tend to be cheaper and faster).
You’ll also find more cost-efficient ways to package the goods as this reduce the cost of shipping significantly.
That said, how do you go about estimating freight costs using this calculator?
Well, I can say that with all confidence that it is simple.
All you need to do is to locate a freight rates calculator online. (Search on your favorite search engine)
Make sure that you have the specifications of your shipment and name of origin and destination port.
The above elements are very important as they are what is used to generate the estimate freight rates.
With this, all you have to do then is feed the data in the respective sections and then ask the calculator for a quote.
Note that this is just an estimate cost.
It helps you compare quotes from various shipping companies.
· Estimate Cost of Shipping Containers from China to the U.S.A.
Again, this takes us back to FCL and LCL terms – remember them?
I bet by now you understand that sea shipping largely depends on the container load.
The more you can ship the less you pay.
Unfortunately, the less you ship, the more you pay.
That’s just ocean shipping for you.
FCL as severally mentioned is a full container load.
If you can fill a standard 20” or 40” shipping container, then your shipment is an FCL.
Different types of shipping containers – Source: China Woven Bag
If you are shipping a smaller quantity that needs consolidation with other shipments to fill a container – then you are shipping an LCL.
Now, FCL rates as I said earlier usually depend on the shipping destination, and weight of the shipment.
Taking our earlier example;
Shipping from Shenzhen to New York will cost you about $2275 to 2215
From Shenzhen to Los Angeles will cost you about $2230 to $2450?
Note that these are FCL freight costs.
LCL shipments, on the other hand, depend on both the origin and destination port.
They also rely on the volume and weight of the shipments.
See, LCL shipments are often billed per cubic meter or ton.
Most often, the rates range between $30 to 40$ per cubic meter from China to the US.
Note that this is not all.
In fact, it is just a fraction of the total freight cost as more charges apply to your shipment once it gets your destination port.
But why is LCL shipping expensive than FCL?
Shipping containers cannot leave loading ports half empty unless the shipper has paid for space.
If not, they have to be filled with cargo from other shippers.
My bottom line here is that containers leave the loading port as FCL.
To get this FCL, LCL shipments have to be loaded into it before the ship can leave.
On arrival, the shipments have to be unloaded and consolidated first before customs can clear each.
As you can imagine, consolidation is a ton of work.
It takes a lot of time, effort and lots of shipping processes.
That is why you find that the unit price for LCL shipments tends to be higher than that of FCL shipments.
That said; here are the estimated costs of shipping from China to the US for different container sizes.
Ningbo to Los Angeles
20” $1000 to $1200
40 “$1300 to $1600
Shanghai to Los Angeles
20” $1000 to $1200
40” $1300 to $1400
Generally, the price of shipping a 20GP container from China to the United States starts at $1000
A 40” GP and Container starts at $1300
You can get estimates from the international sea freight calculators online.
Actual quotes can only be given by the freight forwarding company you request from.