International transportation and the need for insurance
International transportation allows wine importers and exporters to expand beyond local markets. It’s the lifeblood of international trade and means your wine can be moved from wine-producing regions to customers all across the world. Without international transportation, today’s globalized wine industry would not be possible. However, international transportation also carries some amount of risk. Read on to find out how international transportation works and how you can mitigate associated risks.
In the wine business, a shipment is classed as international transportation when it leaves one country by land, sea, or air and crosses a border to enter another country.
It’s a more complex operation than national transport deliveries. Importers often rely on the help of freight forwarders to deal with the regulations, legislations, and customs paperwork needed by the country of export and import.
Here at Hillebrand Gori, we have over 170 years of experience in perfecting the safe and efficient international transportation of wine. Here is a brief guide to how we process wine shipments.
Once you place your order with us, it will be digitally entered into our freight management system. Our teams at both origin and destination will then be able to view your shipment details and begin the order process. You’ll also be able to see your order in the myHillebrandGori app. The collection of your shipment will be coordinated and booked with the exporter, and its entire journey organized with every carrier needed to deliver your wines on-time.
After we receive confirmation from your supplier, we will begin our end-to-end service by promptly collecting your beverages and beginning the pre-carriage leg of its journey. If it is an LCL shipment, it will be taken to one of our warehouses for consolidation with other beverage shipments. For maximum efficiency and to reduce lead times, Hillebrand Gori has local offices and warehouses near the major regions of production and consumption, so we can offer you bonded facilities should you need them.
If you’re shipping just a few pallets (Less than a container load), our warehouse will load your beverages into a container. For FCL (Full Container Load) containers, this is done by the supplier at the collection point. It means that your products receive less handling as they are packed once into their container and remain there until being unloaded. This minimizes the risk of accidental damage. For more on FCL versus LCL, see our explanation further down the page.
Once your shipment has been transported to the port or terminal of departure, it will be loaded onto the vessel, train or aircraft before being transported to its destination.
Your customs agent i.e. Hillebrand Gori will arrange for your shipment to be customs cleared with the relevant authorities. The documentation having been checked and prepared prior to arrival to ensure there are no delays.
After clearance, the container is removed from the port. If it‘s an FCL container, it will be driven directly to the consignee/delivery point. If it’s an LCL container, it will be taken to an approved warehouse and deconsolidated. This allows for each shipment to be collected and delivered to its final destination.
To answer that question, you need to think about which suits the needs of each specific shipment.
If you’re moving enough wine bottles to fill a shipping container, FCL is the best choice. You get an entire container dedicated only to your products, and the total freight cost per pallet is less than using LCL shipping. FCL offers uninterrupted transport as shipments are loaded at the supplier’s winery or warehouse and delivered straight to you.
Meanwhile, LCL is the perfect option if you’re sending smaller shipments, even as small as a single pallet. It lets you send only the amount you need to, and share the cost of a container with other shippers. LCL also allows you to hold less in stock, but still respond quickly to orders and adapt to changes in market trends. What’s more, with Hillebrand Gori, you can be confident that your wine will not be at risk of cross-contamination from other products as we only group and ship beverages.
Another choice you can make regarding international transportation is to ship your wine in bulk for a more cost-effective solution for larger volumes.
Rather than bottling your beverages at the point of origin, you can also transport your wine in bulk and bottle it at the destination. You can ship it in a flexitank or in an ISO tank container. Hillebrand Gori’s wine flexitanks are polyethylene (LLDPE) tanks that sit inside a dry container. One flexitanks can carry up to twice the volume of wine that a standard 20-foot container of pallets can hold.
Sea, road, air and rail freight are the main modes of international transportation, each with advantages and disadvantages. Your shipment’s cargo journey is likely to be multi-modal, that is, it will include two or more forms of transport. The beginning and end of the journey will almost certainly be via road freight, but the middle stage could involve any mode.
What you want to ship, the quantity, how quickly you want it to arrive and your budget are the main factors that go into determining the best international transportation solution for you.
Let’s look at the main features of the four types of transportation.
If you're wondering what’s the most important type of international transportation, sea freight is the answer. The OECD estimates that about 90% of all traded goods are moved by ship. It’s the most cost-effective option for small or large volumes of cargo. It also produces lower carbon emissions than air freight. On the other hand, ships are generally slower than air or rail and can be more vulnerable to delays.
Road freight involves moving wine by van or truck. It’s the most flexible form of transport and, no matter where it’s going, your wine will travel by road at some point on its journey. In Europe, 77% of inland freight is transported by road. When it comes to international transportation, road freight requires less documentation if the shipment does not cross borders. However, moving wine by road isn’t the best option economically or environmentally for very long distances.
The greatest advantage of air freight is its speed. Cargo that is perishable, time-sensitive, or in urgent demand can be dispatched via air freight and arrive at the consignee’s address within hours or a few days. It’s low-risk and offers excellent security for your high-value wine. On the downside, air freight is usually the most expensive option, and its green credentials are not favorable.
Rail freight is good for long-distance international transportation of wine overland. Compared to road freight, trains are fast, not as vulnerable to traffic congestion, and typically operate according to a strict schedule despite inclement weather. Rail freight is also considered a greener transport mode compared to the others.
Choosing what type of container will hold your wine is just as important as deciding on the mode of transport. Wine is a sensitive product that can be affected by humidity, temperature shocks, cross-contamination, and bad smells. International transportation invariably has risks associated with it, but there are things you can do to mitigate them.
In March 2021, the Ever Given got stuck in the Suez Canal for almost a week and blocked one of the world’s most important waterways. This led to a backlog of 369 ships, held up international trade, and wasted an estimated $9.6 billion a day. Unless you invest in protective measures, such a delay could leave your precious wine sitting in potentially damaging conditions for days. So, taking insurance and making sure your wines are protected from extreme temperature and humidity shocks will safeguard your investment.
Our container offer starts with dry containers. These are perfect for wine traveling short distances in an environment with optimal ambient humidity and temperature.
For increased protection and only slightly more outlay, our insulated containers offer an up to a 90% reduction in the thermal shock. This is something that happens when containers move through different latitudes or when passing from day to night conditions. Hillebrand gori insulation liners also include a breathable membrane to keep humidity to around 70% and protect against the effects of condensation.
In our refrigerated containers, or reefers, a steady circulation of cool air provides to-the-degree protection for your high-quality wines and beers.
Of course, containers can’t protect your wine from every danger. Planes, trains, trucks, and ships, along with their cargo, can sometimes fall victim to fires, theft, and even collisions.
In the US alone, there are an average of 1,704 train derailments per year and accidents involving road freight occur daily. That said, disasters at sea have perhaps the greatest potential to impact the largest number of shippers at any one time.
For example, severe weather hit the One Apus, in November 2020, and around 1,816 containers were lost overboard. A further 1,000 were damaged, leading to around $90 million in total losses.
Unexpectedly heavy seas led to the Maersk Essen losing 750 containers overboard somewhere between China and the US in January 2021.
Consider the fate of the cargo ship Felicity Ace, which caught fire in February 2022, and sank two weeks later, taking its cargo of thousands of vehicles, including Porsches and Volkswagens, to the bottom of the sea.
Losing your wine shipment in an unfortunate accident could be a disaster for your business, so how can you protect yourself?
While you may have taken the precaution of investing in a carrier liability policy, do you really understand the ins and outs of this kind of protection?
A carrier liability policy is not actually cargo insurance. It simply increases the amount a carrier will only pay out if you can prove that your wine has been damaged because of something they did. However, it can be very difficult to prove a carrier has been negligent and you will not be covered by situations beyond the carrier’s control, such as natural disasters. What’s more, these policies are limited by international conventions like Hague Visby, which put a carrier's liability at just $3 per kilogram.
So, if you’re serious about protecting your wine/ beer/ spirits shipments and avoiding financial hardship, carrier liability isn’t enough. Instead, you need cargo Insurance, a much broader form of protection for all eventualities.
A cargo insurance policy can be bought from a freight forwarder, such as Hillebrand Gori. We specialize in shipping wine, beer and spirits, and so our insurance policy is carefully tailored to cover the risks associated with these products.
Our coverage extends to any carrier and all modes of transportation, including sea, road, air and rail as well as transport-related temporary storage.
Unlike other policies, our policy has zero deductibles and zero excess in most countries. Also upon the successful outcome of your claim, you will be fully compensated for the commercial value of your shipment and associated freight costs( if insured).
Our policy will protect your wine/ beer/ spirits from damages or losses that include:
Imagine you are transporting a twenty-foot FCL container with 13,200 bottles of wine at a value of $30,000, but it gets lost at sea. According to Hague Visby rules, the most the carrier would reimburse you for under freight liability might be as little as $45. Yet, with cargo insurance from Hillebrand Gori for just $140 (excluding Freight costs), or less than 0.014 cents per bottle, you would have received the full $30,000 value of your product.
The ‘best’ international transportation plan for your products all depends on your needs. No one cargo shipping mode beats the others in every scenario. Lead time, cost, and risk need to be evaluated along with what is best for your wine. Whichever solution you choose, make sure you get in touch to discuss how Hillebrand Gori’s cargo insurance policy can protect your wine from origin to destination.