Activities of Shipping Agencies

by John London; Updated September 26, 2017
Shipping is the backbone of international trade.

A shipping agency is a business that specializes in providing all sorts of services relating to the shipping industry. The fortune of the shipping industry rises and falls with the level of the international trade. Exports from China are particularly important. China accounted for 31.9 TEUs (twenty-foot equivalent units) of containerized cargo, or 26.5 percent of the world's total, compared to the second-place United States, which shipped 9.7 TEUs (8.1 percent), according to the 2007 data from the World Shipping Council.

International Freight Forwarding

The international freight forwarding of goods, both by air and by sea, constitutes one of a shipping company's major activities. Freight forwarding refers to organizing and carrying out administrative aspects of shipments for companies as well as individuals. The International Federation of Freight Forwarders Associations, a nongovernmental organization, estimates that there are 40,000 forwarding and logistics firms among its members, which employ 10 million people in 150 countries. International freight forwarders include both large international firms like UPS or FedEx, as well as smaller, specialized companies.

Customs Clearance and Delivery

After a shipment has been delivered from one international port to another, it needs to go through the sometimes burdensome process of custom clearance. A shipping agency helps with this by providing consulting services or acting as an agent on behalf of the client. After a shipment has cleared customs, the shipping agency can also help to organize the delivery of the shipment to the final destination inside the country.

Logistics

Many shipping agencies offer logistics services, helping clients to organize a steady flow of goods or raw materials at the lowest possible cost and maximum reliability. Most major shipping companies have long-established connections with their overseas counterparts, which allows them to offer integrated services to their clients. For example, a shipping firm can help an exporter to China find a reliable Chinese railway company that will deliver the exporter's goods to major Chinese cities.

Warehousing and Storage

Warehousing and storing shipments until they clear customs are other services that shipping agencies perform. Warehousing means providing special conditions for the shipment, such as temperature or humidity, whereas storing refers to simply finding any place where the shipment can stay till it clears the customs. Shipping agencies not infrequently own or lease storing facilities and warehouses, providing customers secure short- or long-term storing and warehousing, which includes wooden or steel containerized storage equipment, loose, or non-containerized, storage, and dangerous or hazardous goods warehousing.

Shipping Insurance

Shipping agencies either offer shipping insurance themselves, or, more frequently, act as agents of insurance companies. Either way, they can provide their clients with all the insurance products they may need. Shipping insurance products include insurance of household goods and vehicles, and insurance for ocean cargo and air freight. Insurance products can also be divided into export insurance and import insurance, depending on who pays for it (the exporter or the importer).

Photo Credits

  • Container Ship image by DanielDupuis from Fotolia.com