Did you know that there are 17 million shipping containers in the world? And that at any given time, there are five to six million shipping containers traveling to and fro across the globe? This fleet of containers makes an astonishing 200 million trips a year! Shipping containers are filled with our clothing, our cars, our cell phones, our fuel, building materials, and just about everything else that one might want to purchase or to sell.
95% of the world’s cargo moves by ship, so chances are that if you’re shipping to Africa from the USA, or from China, or from the United Kingdom, or from anywhere else in the world, you are moving freight in a shipping container.
Fast Facts About Shipping Containers
As you get involved in importing goods via shipping containers, you’ll want to be familiar with common information and terms.
- What is a Shipping Container? Shipping containers are large rectangular, steel boxes, fitted with hinged doors. They fit neatly on train cars, truck beds, and are stacked by the thousands on cargo ships. They are widely used, but were only developed in 1956! In fewer than 100 years, shipping containers have become the most common way of moving goods around the world.
- FCL: Full Container Load – This means that all the goods in the shipping container are owned by one party, and regardless of whether the container is at capacity, payment is for a full container.
- LCL: Less than Container Load – This means that goods in the container are owned by multiple parties, and the cost is based on the portion of the container used by each party.
- Shipping Volumes:
- TEU: Short for “Twenty Foot Equivalent Unit” (20 feet/ 6.1 meters long)
- FEU: Short for “Forty Foot Equivalent Unit” (40 feet/ 12.2 meters long)
- Each standard length shipping container is 8 feet (2.43 m) wide, and 8 feet (2.59 m) high.
- Extra tall shipping containers, called “high-cube containers” are also available
- Smaller, 10 foot (2.99m) and 8 foot (2.43m) containers are also available, but cannot be shipped in the same way as TEUs and FEUs.
- Imagine this: a standard TEU can hold almost 100 washing machines, or 3,500 shoe boxes!
If you are importing goods to Africa, or are considering such a business venture, it’s likely that you are focusing on one of these 10 most desirable goods or products, all of which are shipped to Africa in containers!
- Computers and other IT products
- Clothing and Fashion Accessories
- Mobile Devices
- Engineering Products
Top Container Ports Worldwide
According to The World Shipping Council, 14 of the top 50 container ports in the world (by TEU volume) are in mainland China. One is in Africa: Port Said East in Egypt which shipped 3.04 million TEUs in 2014. Of course, Port Said is situated on the African side of the Suez Canal, one of only 8 major shipping lanes in the world! More than 100 vessels pass through the canal each day. If freighters were required to sail around the Cape of Good Hope, a typical journey would last 24 days rather than the 16 hours it takes to pass through the canal!
The American Association of Port Authorities lists four African ports among the global top 100. They are, in descending order based on thousands of TEUs shipped: Port Said East, Egypt (3,036); Port of Tangier, Morocco (2,971); Port of Durban, ZA (2,770); and the Port of Alexandria/ El-Dekheila, Egypt (1,662).
These African ports are exciting and essential components of African trade and commerce. They are the links between global trade and the entire interior of the continent. 90% of African imports and exports are expedited by cargo ships, so it’s easy to imagine that these ports are hubs of consistent activity.
Why Maritime Shipping?
Shipping containers are designed to be moved by truck, train, airliner or ship, and obviously, inland transportation is largely handled by trucks and trains where there is the infrastructure. Maritime shipping of containers is the most widely used, and most affordable way to move cargo overseas. A single carrier can transport as many as 8,000 containers! A large carrier may be staffed by a mere 13 persons, making the trip economical for not only the carrier, but the shippers as well! The kind of efficiency that comes from low staff overhead, technology, and direct routes translates into real savings!
The cost to transport a bicycle from Thailand to the UK in a container is about US$10. The typical cost for shipping a DVD/CD player from Asia to Europe or the U.S. is roughly US$1.50; a kilogram of coffee just fifteen cents, and a can of beer – a penny.
How Much does it Cost to Ship a Container Overseas?
Unfortunately, calculating the cost to ship a container overseas is not straightforward. There are a handful of factors that you will need to take into account.
- Freight: the cost to transport a container from its point of origin to its final destination. Often the freight charge includes most of the following surcharges, but some shipping companies prefer to break down each cost separately.
- BAF: Bunker Adjustment Factor – This a monthly fee that varies by destination. It is often included in the total cost, but may be added on separately. BAF’s are charged based on the total number of TEUs rather than per container.
- CAF: Currency Adjustment Factor – This is a fee that covers the cost of converting currency from the port of origin to the port of departure.
- Fuel Surcharges: Recently, carriers have attempted to add “emergency fuel surcharges”, based on increases in the cost of fuel. Shippers are pushing back, and sometimes refuse to pay the surcharges, or taking advantage of the competitive market and choosing a carrier who is not adding a surcharge.
Less common, but considerable cost drivers are piracy risk, especially around the horn of Africa; surcharges for crossing canals; congestion surcharges, which are incurred when a port is unusually crowded; and an equipment imbalance surcharge, which occurs when there is not sufficient equipment at a destination port, resulting in difficulty in returning empty containers to the boat.
Shipping Cost Estimates
While the above factors certainly complicate a cost estimate, it is still possible to have a general sense of the expense to ship an FCL from port to port. Shipping and logistics companies such as DHL and iContainers have useful online quote systems which make it relatively simple to get minimum pricing. Following are several examples.
Shipping to South Africa, cost:
- minimum price from Port of Bilbao, Spain to Port of Durban, ZA – $438
- minimum price from Miami, Florida, USA to Port of Durban, ZA – $2917
Shipping container to West Africa, cost:
- minimum price from Port of Bilbao, Spain to Port of Abidjan, Ivory Coast – $770
- minimum price from Miami, Florida, USA to Port of Abidjan, Ivory Coast – $2239
Small businesses moving cargo in shipping containers find themselves in luck these days, as an abundance of shipping slots has eclipsed demand, and created an extremely competitive market with lower prices for containers. The option to use LCL (shared containers) makes taking the first step into importing to or exporting from Africa even more affordable!
How to Choose a Shipping Company
Due to the technically connected world we live in today, it can be relatively simple to compare and contrast shipping providers based on cost, travel time, reputation, trade routes, and assistance with documentation. Easyship is an online resource which, with a few clicks, will pull up comparisons of shippers and timelines and costs, making the overwhelming task of choosing a shipper much simpler! You may want to head right toward a large and reputable shipper. The largest logistics company in the world is DHL, based out of Germany. It serves over 220 countries and territories, and certainly has earned its reputation. The Siginon Group, which is based out of Kenya, is East Africa’s largest logistics group, and handles an incredibly comprehensive array of logistics services, including sea freight, air freight, customs, distribution, and warehousing. OMA Group is a top choice for shipping and logistics in West Africa, and GAC serves Northern Africa (Egypt, Morocco, Algiers, Libya) as well as many other countries on the continent. There are quite a few shipping and logistics groups servicing South Africa. One known for its quality services is Lonrho Logistics.
Beyond Cost: Documentation, Customs, and Procedures
In order to bring imports into Africa, you may need a Cargo Tracking Note (CTN). CTNs are required by 19 countries, including Nigeria, Senegal and Ivory Coast. CTNs contain a high level of information about the shipper and the cargo, the method of transportation, the expected value of the goods, etc. If these documents are not filed within ten days of a ship’s departure from the country of origin, your shipment will be at risk of fine or rejection. You may want to take a look at Get CTN, an online service that can connect you with CTN documentation as well as many other waivers and certificates which you may need as you import into African countries.
Each country may also have restrictions, conditions, and taxes on what may be imported, and these should be investigated and complied with as you prepare your shipments. It is wise to contact the embassy of the country into which you wish to bring shipments, in order to have a complete picture of their standards, restrictions, conditions, and taxes. Typically, the following sorts of goods may not be permitted through customs: animals, perishables, weapons, dangerous products, flammable products.
Please consider consulting with an advisor at WaystoCap for assistance with insurance, documentation, and customs! We can connect you with a reputable exporting partner, point you to the correct documentation, and apprise you of the correct way to fill out paperwork.
The Importance of Incoterms
The word “Incoterms” is short for “international commercial terms”. These are essentially rules that are set by the International Chamber of Commerce, and are agreed upon and followed by traders worldwide. It may seem overwhelming to understand and follow this somewhat complicated set of rules and procedures, but incoterms eliminate many misunderstandings, miscommunications, and mistakes between buyers and sellers. A handful of incoterms apply specifically to maritime trade, and yes – you guessed it – to shipping containers.
Free Alongside Ship
Let’s take a look at one incoterm that is important to buyers and sellers using shipping containers. This incoterm is called FAS, or “Free Alongside Ship”. This incoterm stipulates that sellers are responsible for delivering the goods and providing the required documents, for all packaging and wrapping, for transporting goods inland in the country of origin, and for any customs detail in the country of origin. Buyers are responsible for the costs of the goods (of course), exit and arrival charges, international freight obligations, insurance, customs on arrival, transportation in the country of destination, and payment of any other fees.
This is just one example of an incoterm that, while complex, will make both buying and selling a much smoother and straightforward process.
Other incoterms that shippers need to be aware of are:
- FOB (Free on Board)
- CFR (Cost and Freight)
- CIF (Cost, Insurance, and Freight)
You may refer to the ICC’s own page for the full listing of current incoterms, and feel free to reach out to us at WaystoCap for assistance with working through these rules and contracts as you buy and sell.
WaystoCap Can Help You Find and Use Shipping Containers!
WaystoCap is a platform that supports importers and exporters in Africa by providing experienced, comprehensive consulting and referrals to entrepreneurs. WaystoCap is the first B2B marketplace in Africa dedicated to international trade, and makes available a dedicated, in-house team which boasts many years of experience in international trade.
We are experts in the African market, which means we know and understand local laws, regulations, and trends in various industries. WaystoCap has created a unique opportunity for Africans to build community by trading with other African and international enterprises.
WaystoCap ensures smooth international transactions by providing assistance in a variety of areas from shipping practices to evaluating product quality, and securing insurance for your imports and exports. Our platform creates access to the highest quality products, vetted businesses, and to the most affordable goods available for trade on the African continent. By using our platform to research prices, find business partners, and source quality products, you will save time and money – which means you’ll have more time and money to spend on your business!