Business

3 Things You Should Know Before Starting An Ocean Freight Forwarding Business

Providing shipping services by sea, when you own the vessel and take responsibility for the cargo being shipped from the source port to the destination port, is called ocean freight forwarding. This can be a profitable business if you are doing things right and making sure that you know the sea.

There are many things that you should know before starting an ocean freight forwarding business, however, there are three very important things that you must know. This article discusses the important things that you must know before starting a sea shipping company.

1. Knowledge About The Sea

Knowing your workplace before jumping into any kind of business is very important. When you are providing shipping services by the sea, then sea and ocean are your workplaces. You should know the type of vessels you should have for adequate shipment. You should know the Maritime Law to ensure the safety of your crew and other users of the ocean. When you are far away from your homeland’s jurisdiction, maritime laws and international laws are the guiding principles for the ships to make sure that no one hurts another.

You should also have considerable connections in foreign countries as well to make sure that your shipment lands in safe hands. You should know about different markets and where and how you can extend your business for profitable growth.

2. Important Licenses And Registrations

Like any other business, shipment by sea needs to be registered with the local authorities. You should know where to register and how to register your business so that you benefit from government schemes. You also need to register your business because local and federal laws need to be implemented in every business operating within the state.

You should also have a license to do the business. For your sea cargo shipment business, you should visit the website of the Federal Maritime Commission (FMC). Their Office of Transportation Intermediaries (OTI) is responsible for adequate licensing of the ocean freight forwarding business. You might have to show proof of financial stability to obtain a license for the ocean freight forwarding business, which is approximately $50,000.

3. Insurance Policy

Lastly, you should have an adequate insurance policy for the cargo you are going to ship. You don’t need to be the owner of the cargo. However, during the shipment, it is your responsibility to ensure the safety of the cargo. If anything breaks or a package is lost during the process, the owner company might ask you for the loss. Therefore, you should have a good insurance policy. The packages you are shipping should be insured so that in any case of unforeseen situations you do not have to pay for every loss.

Secondly, you should also have an insurance policy for the crew members and the ship. If any accident occurs, or your crew members are injured, insurance companies should be able to pay for the injury and loss.