The Concept of a Shipping Order and an Overview of Its Main Stages
Today, more than 80 percent of goods transportation is carried out by sea. Maritime transport encompasses a wide range of concepts and practical considerations, and familiarity with them is essential.
One of the key concepts in maritime shipping is the shipping order. The term “shipping order” combines the words “shipping” and “order” and is commonly used in the context of sea freight and maritime transportation.
Definition of a Shipping Order and Its Role in International Trade
Stages of a Shipping Order
Stage One
The first stage of a shipping order involves the marketing team introducing the company’s shipping services to customers. This may be done by telephone or in person. In practice, marketers prepare a file for customers that describes each company’s operational procedures, the routes used, and its export cargo. This enables the company to promptly present special rates for a particular route to active exporting companies once carriers and shipping lines announce them, leveraging its organized information database.
Note: The rate announced by shipping lines and carriers to freight forwarders, as well as the rate quoted by forwarders to customers, should be calculated on an all-in basis, meaning that the full transport costs are included. In addition, certain charges may be added, such as terminal handling commission, issuance of a bill of lading, issuance of a telex release, demurrage, bill of lading amendments, supplementary document fees, and similar items. These additional charges may not always be reflected in written quotations.
Some of these charges are announced annually for public reference by the Shipping Association and Related Services, or by the Ports and Maritime Organization. Examples include telex release fees, bill of lading issuance fees, THC fees, and demurrage fees.
Stage Two
The second stage occurs when the customer contacts the sales representatives and marketers to obtain pricing information.
Note: Requesting quotations from different companies is a common practice for businesses shipping cargo. In practice, the marketer should understand the customer’s target rate to negotiate effectively with the shipping line and secure a more favorable price.
Stage Three
Identifying the best available rate with the shortest transit time, selecting the most suitable vessel service, and reviewing vessel sailing schedules require the sales team at international transport companies to follow up actively.
Note 1: Weekly market reviews by sales personnel are required for all routine routes and standard cargo types. Sales teams should maintain up-to-date files to provide quotations promptly.
Note 2: The most reliable approach for requesting rates from shipping lines is to submit written inquiries by email and retain the shipping line’s response in email records. Service speed and efficiency improve significantly when supported by proper filing and a well-organized database.
Stage Four
It is advisable that the quotation provided to the customer, as well as the request for confirmation of the quoted rate, be in writing. The validity period of the freight rate should be specified, along with the cargo details and packaging specifications.
Stage Five
After the customer confirms the quoted rate, submit a container booking request to the shipping line via email. This request should include the following information:
- Type and number of containers requested.
- Type of cargo.
- Type of packaging.
- Port of origin and port of destination.
- Final destination.
- Agreed on the rate with the shipping line.
- Place of freight payment.
Stage Six
The shipping line must respond by issuing a container booking number.
Note: Certain shipping companies may require a letter of undertaking from the cargo owner for specific routes.
Stage Seven
The relevant personnel send all undertaking letters, and the booking number is communicated to the customer and the customer’s representative at the cargo location.
Stage Eight
The traffic department must follow up with the customer or their representative at the cargo delivery location to confirm the deadline for delivering the documents to the shipping line’s office.
Frequently Asked Questions About the Concept of a Shipping Order
A shipping order is a document used to coordinate and execute the maritime transport of goods. It enables transport companies and freight forwarders to book and manage cargo shipments. It serves as a reference for tracking and delivery at the destination.
The main stages include: marketing and service introduction, customer inquiry and price request, identifying the best rate and service, issuing a written quotation and receiving customer confirmation, submitting a container booking request, receiving the booking number from the shipping line, sending undertaking documents and notifying the booking number to the customer, and following up on document submission deadlines.
The best rate is determined by reviewing market conditions and vessel schedules weekly, selecting the option with the shortest transit time and best service. Written inquiries and retaining email responses are recommended for accuracy and recordkeeping.
Yes. The quoted rate must be provided in writing and confirmed by the customer. The quotation should specify cargo details, packaging, and the validity period of the freight rate.
The required information includes the type and number of containers, cargo type, packaging type, port of origin and destination, final destination, the agreed rate with the shipping line, and the place where freight will be paid.
The booking number is issued by the shipping line and serves as a reference for tracking, container allocation, and coordinating cargo delivery at the destination.
The traffic department follows up with the customer or their representative to confirm the deadline for submitting documents to the shipping line’s office, ensuring the necessary paperwork is ready for customs clearance and delivery at the destination. What is a shipping order, and what is its function in international trade?
What are the main stages of a shipping order?
How is the best sea freight rate determined?
Does the quoted rate require customer confirmation?
What information must be provided when booking a container?
What is the purpose of a container booking number?
How is document delivery followed up in a shipping order process?
