Bulk Shipping: What You Need to Know
Last updated on May 17th, 2022 at 04:30 pm
Each day, massive ships move thousands of tons of bulk cargo around the world. These huge ships can transport up to 400,000 metric tons of deadweight and account for 21% of merchant fleets worldwide.
Simple, everyday activities such as pouring milk in our cereal, gassing up our vehicles, or adding salt to our food would be difficult to do if it weren’t for merchant carriers that transport grains, minerals, chemicals, and other products. Bulk shipping may be challenging, but there are specialty-built carrier ships that make it easier to transport these goods around the world.
You may be asking, “Why should I care?”
If you run a B2B ecommerce business that tends to ship large orders to business or wholesale customers, bulk shipping can be a cheaper option. In this article, we break down exactly what bulk shipping is, how it works, and how bulk shipments can be beneficial for your business.
What Is Bulk Shipping?
Bulk shipping is a mass shipping technique where merchants ship large quantities of goods by loading unpackaged products onto shipping vessels. The vessels transport these shipments in large, metal shipping containers. These containers are on deck and in the hole of a ship.
These enduring ships make long trips across the ocean, so they’re not ideal for just-in-time inventory shipments. However, bulk shipping is an excellent and cost-saving ecommerce shipping solution for those selling wholesale or for the B2B business model.
How Does Bulk Shipping Work?
Bulk shipping is similar to traditional shipping methods, but there are three steps that must be satisfied in order for it to be done correctly:
- Transportation to Port Storage: Because bulk goods are stored at the ports where they are shipped from, they’re left in a facility or in a storage container on the docks until it’s time to ship. Similar to dropshipping, these storage areas are owned by the shipping carrier companies who will load and unload the goods.
- Loading Onto a Merchant Carrier: Next, your shipping container is loaded onto the deck of a shipping vessel. Typically, this is done by a crane. Each shipping carrier can hold thousands of twenty-foot shipping containers.
- Unloading at the Destination Port: At the destination port, the process is reversed. The carrier will load your goods onto trucks for final mile delivery. If you participate in a consignment inventory model, they can be delivered to your warehouse instead.
What Goods Can You Send via Bulk Shipping?
There are numerous products you can bulk ship. Typically, goods are classified as solid or liquid bulk. Solid bulk and liquid bulk are loaded and shipped in different ways, but both techniques are common in bulk shipping.
Solid Bulk Goods
Solid bulk goods are also known as dry bulk. Storing dry bulk involves the use of cranes, conveyor belts, silos, or hoppers. The goods can be dispatched from the field, factory, mine, or another location.
Solid bulk cargo could be minerals (such as copper, bauxite, and limestone); grains (such as rice, oats, wheat, or barely; chemicals (such as pellets, resins, fertilizers, or plastic granules); and other items, such as wood or salt.
Dry bulk goods are shipped using bulk carriers via large merchant vessels. These vessels are specifically designed to carry dry bulk and consist of several hatchways and a single running deck.
Liquid Bulk Goods
Think about all of the free-flowing, liquid materials that must be transported around the world. Companies use pipelines and pumping stations to load and unload liquid bulk products. Their shipment involves using specialized deposits or tanks that can hold liquid materials.
Refrigerated goods like fruit juice or milk and chemicals such as natural gas, liquid nitrogen, petroleum, and cooking oils are all examples of liquid bulk. To strengthen their structure, tankers used for transporting liquid bulk are designed with double hulls. They are usually massive vessels that can carry over 400,000 tons of deadweight.
What Affects Bulk Shipping Rates?
When it comes to bulk cargo shipping costs, rates will vary tremendously depending on several factors. What you’re shipping will directly influence how much the carrier company will charge.
Let’s look at typical factors that they consider to quote pricing,
Shipping or Freight Class
A shipment’s shipping or freight class depends on its susceptibility to damage, density, and ease of loading and unloading. Expensive and fragile products cost more to ship because they require more from the shipping company, therefore they’re in a higher freight class.
Size and Weight
When determining shipping costs, size and weight are the two most important factors that shipping companies take into consideration. You must provide your shipping carrier with accurate measurements and weight. Each item you ship is given a National Motor Freight Classification (NMFC). The NMFC is based on the weight and measurement metrics you provide. By monitoring this number, you can help keep shipping costs low to hit your target inventory KPI.
The distance you’re shipping a carrier can greatly affect what you pay for shipping. Rather than using per-mile calculations, most shipping companies prefer a complicated formula to calculate risk based on the shipment’s origin, destination, and type. Based on these factors, shipping rates may actually lower with distance, depending on transport methods and haul costs.
Shipping companies use a dimensional weight formula to determine the density of a shipment. The final shipping weight may be based on gross weight or dimensional weight—typically the larger number of the two. For example, a large, but light package is charged based on its dimensional weight.
Is Bulk Shipping For Your Business?
There are limits to bulk shipping and the kinds of products you can ship in this manner.
Products that are prone to breaking aren’t good candidates for bulk shipping. Damage is extremely likely to smaller, individual items, so they definitely shouldn’t be shipped in bulk. That said, bulk shipping is only ideal for a small selection of goods. Unless your business is involved in a very specific industry, bulk shipping may not be the most appropriate means of shipping for you. If you sell more fragile goods, there are definitely safer shipping methods available.
Also, bulk shipments present a higher risk to your business’s capital. A product may be enjoying a successful spell right now, but you have no way of knowing whether its demand will remain consistent. If the demand for a specific product drops, it might be challenging for you to make the necessary adjustments to your operations. It also costs more to keep bulk items in storage. Many ecommerce companies don’t have the luxury of extensive warehouse space—which is generally required for such large orders. You may find that money you save on bulk shipping is then lost on storage costs.
Put simply, bulk shipping is only a viable option if your business has access to storage or can afford the extra expense to add more.
Bulk Shipping Best Practices
When working with a bulk shipping company, always negotiate for the lowest price. Many shipping companies will provide discounts based on volume, and we recommend shipping around until you find the most favorable deal for you.
You can establish the best course of action for your bulk shipping requirements by factoring in the class of your shipment and the weight of your order. It’s typical for higher-value products to come with a higher shipping price. Then, compare offers from different shipping companies to determine which one makes the most sense for your business.
Keep in mind that you should only bulk ship products that won’t deteriorate in quality. For example, if you bulk ship wine, the quality is known to decline. You must offset the economic benefits of bulk shipping by the potential risk of damaged goods.
Streamline All Aspects of Your Ecommerce Business With Flxpoint
Bulk shipping helps move millions of products around the world every day. Sure, it helps many businesses offload inventory, but it can also result in a lot of inventory sitting around—or dead stock. However, ABC inventory analysis may help you with that.
If you move large amounts of inventory or ship internationally regularly, you should look into your bulk shipping options. The technique can increase your product’s reach while saving your business money.
Flxpoint offers a real-time look into all of your business’s data, which can help you decide whether bulk shipping is the right method for you. If you’re interested in learning more about how Flxpoint helps you control, manage, and view your inventory across sources, talk with an expert today.
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