What is Shipping?
September 14, 2025 - September 14, 2025
What is Shipping? – History and Nature of Shipping – Advantages and Disadvantages – Shipping Internationally – Duties and Taxes – Time Zone Changes
What Is Shipping?
Shipping is the physical process and preparation of transporting goods and cargo to the receiver. 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. The shipping industry is transporting 90% of the world’s trade. Most ships move from country to country as part of their normal trading pattern.
History and Nature of Shipping:
Commercial shipping began with the activities of the Phoenician merchants who operated their own vessels, transporting goods in the Mediterranean. The practices were adopted by the merchants of ancient Greece and Rome and were continued through the Middle Ages to modern times. From 1600 to 1650 the Dutch ranked first in shipping activity, operating a globe-circling tramp service for merchants of Western Europe.
Shipping is a private, highly competitive service industry. The activity of the industry is divided into several categories, namely, liner service, tramp shipping, industrial service, and tanker operation, all of which operate on certain well-established routes.
The industry devoted to moving goods or passengers by water. Passenger operations have been a major component of shipping, but air travel has seriously limited this aspect of the industry. The enormous increase, however, in certain kinds of cargo, for example, petroleum, has more than made up for the loss of passenger traffic. Although raw materials such as mineral ores, coal, lumber, grain, and other foodstuffs supply a vast and still growing volume of cargo, the transportation of manufactured goods has increased rapidly since World War II.
Advantages And Disadvantages Of Shipping:
Compared to other means of transport, and if conducted properly in all respects, shipping has many advantages from an environmental point of view, as well as in terms of safety and transportation economy. This holds true despite the obvious problems of operational discharges of oil and the ever-present risk of large-scale pollution with oil (and chemicals) in the case of a major accident at sea. The advantages of shipping, together with the obvious possibilities for improvements in pollution control, should be kept in mind when assessing the whole spectrum of environmental problems still connected with shipping. Like other human activities, shipping is a source of water and air pollution. With exceptions, a list of environmental problems from ships and shipping looks very much like the kind of list one would come up with for municipalities, energy plants, road traffic or industries on land, i.e., land-based sources.
Another environmental problem caused by shipping in coastal areas is disturbances of wildlife and natural values due to noise, hydrodynamic effects on shores caused by large vessels and high-speed pleasure crafts, and by high-speed boats in wildlife reserves.
Shipping Internationally:
The first challenge to overcome when shipping internationally are the restrictions that may be in place for the country that you want to send to. Each country has different restrictions with regard to what products are allowed into the country and which are not. Before making products available to customers online, it is important to understand what the restrictions are. If your product is prohibited or restricted in a certain country, it is important to notify your customers on your website of these limitations. This is the first step in avoiding confusion and customer service issues related to international shipping.
Once you have determined that you are able to ship to a certain country, there are required documents that will accompany the shipment. International shipping documents will take extra time to prepare and many online retailers, in fact, collect an extra handling fee to cover this time and effort. At a minimum, most international shipments will require three documents:
1. International Air Waybill
2. Commercial Invoice, and
3. Certificate of Origin.
Shipments that contain merchandise with values exceeding $2,500 could also need a Shipper’s Export Declaration.
The International Air Waybill is nearly the same as a domestic bill of lading, except that the Waybill contains much more information that is required for customs, such as the values of each item, the weights, and more. Much of this extra information is also required for the other shipping documents, so it is frequently best to wait and complete the International Air Waybill last.
In addition to the Waybill, you will almost always need a Commercial Invoice. The Commercial Invoice is a detailed manifest of each item that is contained in the package, including the individual quantities, the weights, and the values of each. This serves as a guide for the customs officials to understand what is in the package, and to help them identify the individual items in a package in the event that the package needs to be opened for inspection.
The Certificate of Origin is also required so that customs officials can be aware of the country (or countries) that the items were made in. However, this one is not quite as clear-cut as the rest. Suppose, for example, that you are shipping a variety of products to an international customer. Let’s say that two thirds of the items in the package were made in America, while the remaining one third of the items were made in Mexico. In that instance, the shipment is usually considered to have originated in the United States since a majority of the items were made there. Contact your shipping carrier if you are not sure what the country of origin is for your products, as they will be able to best advise you based on your products and the destination country.
Shipments with merchandise valued at more than $2500 USD frequently require a Shippers Export Declaration. The Shippers Export Declaration must also contain a list of all products inside the package, as well as the products’ “Schedule B” category number, which shows how each item in the package fits into a system designed to organize and track commodities. In addition, the Shippers Export Declaration also requires a little more information about the shipper and receiver, such as the company name, tax ID numbers, and address. Contact your shipping carrier for assistance with Schedule B categories.
Duties and Taxes
Not only is there additionally paperwork required for international shipping, frequently there are also duties and taxes. The terminology for the collection of these duties and taxes can be different from shipper to shipper, so it is important to consult with them to make sure you understand. For example, one option is sometimes called “prepaid”. This can be deceiving since prepaid means that you will only pay for the shipping costs, and all duties and taxes will be the responsibility of the recipient. Another option commonly available is called “Free on Board”, and denotes that the you will pay for all duties and taxed required until that package arrives in its destination country. At that point, any additional duties and taxes will be charged to the customer. Both of these are less than ideal in that they require your customer to pay additional fees when the package arrives. This can ruin the customer experience, and lead to customer service issues if the customer was not made aware of these charges up front. A better way to ship is called “Delivery Duty Paid”, or sometimes also called “Free Domicile”. This billing method ensures that you will pay for all duties and taxes, so that the customer receives the package without any additional charges. An international shipping and handling fee charged by retailers to international customers usually cover this cost.
Time Zone Changes
It is important to consider time zone changes when shipping internationally, as packages going to Europe from the United States will have additional time added, as opposed to shipments made to Asia. Occasionally packages can be held up in customs due to inspection, and it is important to relay this information to your international customers.
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