In the world of eCommerce, we become so invested in the products and how to sell them that we often forget where these items came from in the first place. Online merchants provide a delectable selection to entice shoppers. But how do these sellers procure these items?
Some ecommerce businesses manufacture their own products, whereas others source these readymade items from other businesses or suppliers. The process of obtaining any supplies or merchandise from another business falls under the purview of commercial shipping.
In the following sections, we’ll take you through everything that commercial shipping involves, its definition, must-have documentation, and even the carriers best suited for such shipments. Keep reading!
What is Commercial Shipping?
Commercial shipping or business shipping is the process of transporting merchandise from one business to another in large containers via road, rail, air, or ocean freight. To qualify as B2B shipments, consignments must be sent to the receiver’s business address.
These delivery locations could be a warehouse, distribution facility, medical center, or any other non-residential property. The need for a business address is not a mere formality in B2B shipping. Most residential properties do not have the capacity to store as many products as a warehouse does. Nor do they have specialized docks for loading and unloading items as in a storage facility. For these reasons, business properties work best for commercial shipping.
Businesses use commercial shipping to consolidate numerous bulky shipments into a single cargo for reduced logistics costs. Therefore, it’s best to use business shipping for your regular inventory orders. However, if you’re looking to restock certain pieces in the middle of the sale season, you might want to consider air freight. Delivery speeds in B2B shipping are usually slower than in regular shipping.
Let’s take a quick look at the different stages of commercial shipping.
How Does Commercial Shipping Work?
To understand the process of B2B shipping, businesses must familiarize themselves with the key players in the supply chain and the must-have documents.
1) Placing Orders
Speak to your supplier, manufacturer, or seller about all item specifications and how and when they will be shipped. Once you have made up your mind about what you want, you will need to create a Purchase Order. The PO contains details of all the items you want to purchase, like, type, quantity, color, etc.
Your seller will furnish you with a Proforma Invoice accepting your order. Both these documents need to be signed before shipping can commence.
2) Requesting Quotes and Booking Carriers
The buyer starts off the shipping process by requesting quotes from the carrier. If you’ve hired a freight forwarder, then they will make all arrangements for you to ship with the best carrier. They’ll also inform you about the documentation you need for successful carriage.
Otherwise, you can book a carrier of your choice depending on the kind of service required - ocean freight, inland transit, or air and rail transport. Most shipping companies can help you figure out how big a container you need if you’re unsure.
Now that both parties have agreed on set terms and a carrier is booked, it’s time to set sail. A couple of essential documents needed at this stage are -
Bill of Lading - Also called BoL or B/L, is a legal transportation document issued by the carrier to the seller/sender. It acknowledges the receipt of goods/cargo in mint condition before shipping. B/L is a crucial document for claiming insurance.
Packing list - The Packing List includes detailed information about all the items in the consignment - weight, dimensions, type, quantity, etc. It also says how everything has been packed. The shipper attaches packing lists on all cartons so that items don’t get damaged during loading/unloading or while unboxing.
If your shipment is travelling within the country, these two documents will suffice. For international orders, retailers need a few more permits.
Commercial Invoice - You can’t export or import products without the commercial invoice. It contains all the information about the cargo’s contents and is issued by the carrier for customs clearance.
Certificate of Origin (COO) - This document is also used by customs officials to detect the origin of goods and whether they comply with the country’s export and import policies.
4) Arrival and Offloading
Your shipment has traveled around the world or the country to finally make it to your destination. Your carrier will arrange for offloading at a port, dock, or air cargo unloading point, where all parts of the consignment will be stored momentarily before being dispatched to warehouses.
If your delivery address is close to the offloading centre, packages will be loaded onto trucks where they begin their last-mile journey. For farther destinations, the consignment will travel via rail, air, or road transport.
5) Receipt of Goods
When the buyer has finally received all the products at their address and checked them for defects and damage, they will issue a GRN (Goods Receipt Note). Issuing the GRN marks the end of the business shipping journey by acknowledging all items listed in the purchase order have been received in good condition.
Differences Between Commercial and Residential Shipping
There are some critical differences between these two types of shipping forms that every business owner must be aware of. Let’s get into a little more detail about what these differences are and how you can prepare for each of them.
1. Delivery Address
The most obvious difference between commercial and residential shipping is the address used for delivery. B2B shipments are sent to business addresses, whereas residential ones are sent to home addresses.
However, if a retailer uses their home address as their business address, the packages delivered there would technically fall under business shipping. This trend is commonly seen in new business owners who are slowly setting up supply chain operations and don’t order a huge load of products from third-party businesses.
2. Shipping Costs
Many entrepreneurs are aware that B2B shipping costs more than residential delivery. Most business addresses, like warehouses, DCs, storage facilities, etc., are situated close together in business parks. A shipper delivering to such a location can opt for LTL (Less-than-Truckload) or LCL (Less-than-Container Load) shipping to accommodate products of various companies in a single trailer.
In residential shipping, carriers usually send smaller trucks that can better navigate in densely-populated areas. The smaller vehicle size increases the number of trips required and eliminates the advantage of scale present in high-volume shipping. Since business addresses are generally located in low-density areas with wider roads, carriers can deliver more with fewer resources.
For this reason, carriers have to pay residential surcharges for any package they deliver to a home or home business address. Reputed carriers like UPS and FedEx charge between $4 - $5 depending on the service used.
3. Delivery Duration
In B2B shipping, successful delivery of tons and tons of merchandise in perfect condition and low costs takes precedence over speed. Therefore, residential shipping is generally much faster than business shipping.
International and cross-border shipments arriving via sea freight may take anywhere from 20 to 40 days. Air cargos are the fastest, reaching within 1-3 days. Intercontinental and domestic railway networks can also deliver orders within a week.
Ecommerce and residential shipments arrive within a maximum of 3 - 5 days unless customers choose expedited shipping options. Time-sensitive orders can be delivered the same or the next day. Residential shipping offers more flexibility in delivery options like - slot-based, on-demand, hyperlocal, curbside, etc.
Top 4 Commercial Shipping Carriers in the World
If it’s your first time sending a B2B shipment, FedEx is a great choice. It has a great delivery network across the globe, delivering to more than 200 nations. Finding freight quotes comes easy with FedEx. They offer several container sizes to accommodate all incoming commercial shipments. FedEx uses intermodal transportation to ship commercial packages. So as a business owner, you don’t have to negotiate or follow up with too many contacts; FedEx will oversee the shipping from start to finish. Many store owners today prefer paperless Bills of Lading. With FedEx, they only need to fill out an online form that lists everything about the products, sender, recipient, destination, etc.
UPS has many services for B2B freight shipping. These include ocean, air, rail, and ground freight to over 160 countries. UPS offers freight consolidation services for international cargo. It consolidates a multi-piece consignment into a single shipment to reduce the time and money spent during customs clearance.
It also provides multimodal transport that merges air, land, and sea freight into one journey. Multimodal works best if you want a relatively faster delivery at a low budget. The best UPS service is Express Critical which can deliver domestic and international shipments of any size by the next day.
Crates, pallets, and boxes are available on the UPS website. It can also arrange for a scheduled freight pickup at your preferred location. You can track your packages in real-time with the UPS app.
Hapag-Lloyd is among the oldest and best liner shipping companies for overseas bulk shipments. They own 251 shipping vessels and deliver to 400 locations worldwide. Under Cargo and Fleet, Hapag-Lloyd offers 4 services - Reefer, Special Cargo, Dangerous Goods, and Coffee.
Reefer provides 20 and 40-inch containers that are weather-resistant and can maintain temperatures between -35 degree Celcius to 35 degree Celsius. Special Cargo works best for items that are so big they can’t be shipped in regular containers. Special cargo has 5 container types - breakbulk, platform, flatrack, open top, and hard top.
Dangerous goods need special scanning and documentation for approval. Hapag-Lloyd uses a cargo patrol software to check loaded containers for suspicious and unauthorized items. The shipping company offers numerous options in containers - 13 class, 15 class, 18 class, and special express class vessels. Real-time tracking and order updates are available for all consignments.
Maersk is another popular name in this segment. Maersk’s services extend beyond shipping to supply chain management and digital solutions. It provides ocean, inland, rail, and air freight shipping. All these options come with Maersk Value Protect, which insures your container against all logistics mishaps.
It has 4 cargo types - dry, special, refrigerated, and dangerous. All these types of cargos qualify for expedited shipping under Maersk Accelerate. This feature is especially beneficial for retailers selling Made to Order products because it reduces wait time.
With Maersk you get access to a dedicated customs clearance team that authorizes compliance norms and manages risk and unpredictability for international orders. Booking a cargo is simple with Maersk’s Spot service, which provides instant fixed quotes and confirmation. Shippers get immediate discounts on non-time-bound shipments if their vessel is not loaded on time.
How ClickPost Can Make B2B Shipping More Efficient for Businesses?
Commercial shipping involves too many complexities that can keep ecommerce entrepreneurs busy for months. Some decision-making activities, like finalizing item lists, reordering inventory, choosing shipping methods, etc., need entrepreneurial intervention. Others, like finding the best quotes and carriers and managing transportation logistics, can be better handled by shipping experts.
Moreover, shipping software doubles or triples the number of carriers one can ship with. This means competitive pricing, shorter delivery times, and better services and support. ClickPost gives businesses access to 250+ carriers and an easily navigable dashboard that maps all activity across your supply chain.
You can track the status of your consignment in real-time, filter orders based on location and status, and book immediate returns if needed. What’s more, it’s not just business shipping ClickPost can help with. Businesses can use the same platform to manage their online sales. There’s really no way you can go wrong with shipping software!
We hope we’ve cleared your doubts about what commercial shipping is and how a business can go about ordering its first business shipment.
Even though it may seem tricky at first, B2B shipping isn’t very different from regular shipping, except here, things move in bulk. Keep your documents ready, partner with a 3PL if needed, and you’ll be ready to take on this journey.
FAQs (Frequently Asked Questions and Answers)
1) Which is the best carrier for commercial shipping?
The best carrier for small businesses is UPS and USPS. Whereas frequent bulk shipments are better handled by companies like Maersk, FedEx, and Hapag-Lloyd. These companies have bigger fleets and containers and offer several dedicated carriage services.
2) Does commercial shipping cost more than personal shipping?
No, commercial shipping is generally cheaper than personal shipping because most carriers offer heavy discounts on large-volume freight transport. Even if a business doesn’t have enough products to fill a container, carriers consolidate such products with other companies to create LCL/LTL shipments.