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Shipping has multiple meanings. It can be a physical process of transporting goods and cargo, by land, air, and sea. It also can describe the movement of objects by ship.

Land or "ground" shipping can be by train or by truck. In air and sea shipments, ground transportation is often 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.[citation needed]

Shipment of freight by trucks, directly from the shipper to the destination, is known as a door to door shipment. Vans and trucks make deliveries to sea ports and air ports where freight is moved in bulk.

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 90% of international trade with 50,000 merchant ships worldwide.[1] The term shipping in this context originated from 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.

Terms of shipment

Common trading terms used in shipping goods internationally include:

  • Freight on board, or free on board (FOB) - the exporter delivers the goods at the specified location (and on board the vessel). Costs paid by the exporter include load and lash, including securing cargo not to move in the ships hold, protecting the cargo from contact with the double bottom to prevent slipping, and protection against damage from condensation. For example, "FOB Kunming Airport" means that the exporter delivers the goods to the airport, and pays for the cargo to be loaded and secured on the plane. The exporter is bound to deliver the goods at his cost and expense. In this case, the freight and other expenses for outbound traffic are borne by the importer.[citation needed]
  • Cost and freight (C&F, CFR, CNF): Insurance is payable by the importer, and the exporter pays the ocean shipping/air freight costs to the specified location. For 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"; if the parcels are not delivered on time, the customer is entitled to a refund.[2]
  • Cost, insurance, and freight (CIF): Insurance and freight are all paid by the exporter to the specified location. For example, at CIF Los Angeles, the exporter pays the ocean shipping/air freight costs to Los Angeles including the insurance.[citation needed]
  • The term "best way" generally implies that the shipper will choose the carrier who offers the lowest rate (to the shipper) for the shipment.[3] In some cases, however, other factors, such as better insurance or faster transit time will cause the shipper to choose an option other than the lowest bidder.[4]

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