HHG Shipping. topia.com

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1 HHG Shipping Household Goods (HHG) Shipping can be confusing, but when you add in the differences between shipping items domestically and internationally it can be even more challenging to understand. In this document, we pull together some useful information to help break it down for you.

2 Shipping Method There are two main shipping methods for HHG air freight and surface freight. Air Freight HHG moves via air freight is generally for smaller shipments with more urgent timeframes. This might be offered in addition to surface shipping, for example to transport essential family items (ie. baby goods) or work items needed whilst waiting for the surface shipment to arrive. However, for larger shipments air is not always recommended as the additional cost does not always result in faster delivery than surface shipping methods. Cost effective air freight solutions are emerging in the marketplace to support the need for a low cost option for temporary assignments and lump sum moves. These employees typically don t have the need for full household goods shipping, as they stay in furnished, rented accommodation and just look to ship their essentials. Many short term travelers or employees on lower budgets will simply pay additional excess baggage fees via their airline as a more economical alternative. Air shipments can be used for both domestic moves (common in North America, Russia and China due to their size) and international shipments, and can be transported on either cargo or commercial airlines. Air shipping is less common for moves within Europe, where surface shipping can be quick and the additional cost of air shipment is not necessarily justified. Often goods booked through air freight carriers end up being transported by road due to quicker transport times. Surface Freight Surface shipping can either be via road, rail or sea, and, although considerably cheaper than air shipment, can take significantly longer. Most relocating employees will need to stay in temporary accommodation or rent furniture for the period they are awaiting delivery of their household goods, potentially negating the cost savings of choosing to ship by sea.

3 Containers and Crating On moving day, items are collected at the residence, packed into boxes and sent to a warehouse to be crated. Or if you prefer, items can also be crated at the residence. The type of crating depends on the items being shipped and whether the goods will travel by road or sea. Where goods are being shipped by road, crating may entail simply adding additional reinforced cardboard to support fragile items the decided method will depend on the individual items. For sea shipments, goods must be packaged together in such a way as to fill the metal containers, preventing shifting of the items inside during rough sea travel. If goods are transported internationally, all crates must be marked according to the customs requirements for treatment of wood products. Crating also needs to be done correctly and professionally for insurance purposes, ensuring the terms of insurance policies are met. Container types will vary depending on how the items are being shipped and where they are being shipped to. The term container can refer to a steel container or a wooden box, also called a crate or a lift van. The most popular containers for shipping household goods are 20ft and 40ft steel shipping containers. Other sizes are possible, for example a 40ft high and 45ft containers, but these are limited to certain destinations depending on whether the sending and receiving ports have the ability to handle them. Relocatees can either fill an entire container on their own, or choose to ship on a partial container basis, sharing a container with another load. This is a more economical method, but can take longer, as the shippers need to wait for the container to be filled with an appropriately matched load and make multiple deliveries from the same container. Items shipped by air will always need to be put in containers to be loaded onto the plane, regardless of their size or volume. Most air shipment containers are custom built to contain the specific items they need to fit. Shippers must ensure to abide by airline limits, which differ between airlines and planes. Many shipping companies will have their own standard container sizes, but it is common in North America for providers to abide by the standard size LDN and D containers.

4 How to measure: volume or weight, metric or imperial? International shipments often focus on volume rather than weight (i.e 20ft container), whereas domestic shipments tend to focus on weight (i.e 6,000lb of goods). However, new regulations were recently enacted to require weighing of all international shipments, ensuring that container ships have proper weight distribution to prevent shifting in rough seas. When calculating the weight of a shipment, there is not one true measure to use metric or imperial, pounds or kilograms or (if you really want to confuse people) short ton/long ton or metric ton. Although the US is only one of 3 countries left in the world that still uses imperial measurements, as one of the largest countries with high volume ports, the US has influenced shipping weight measurements so that they are most commonly measured by the hundredweight, or 100 pounds (5 hundredweight = 500lb). Tariffs vs Pricing Understanding tariffs and the pricing components contained within them is one of the most confusing items in the HHG shipping industry. A tariff is a document detailing the shipper s pricing a fixed price rate sheet. Tariffs include the costs of ancillary services such as shuttles, packing and unpacking. Tariff pricing is defined by hundred weight or cubic meter and bracketed based on volume the higher the volume, the lower the cost per unit. Shuttles are used when the large delivery truck is unable to access the delivery location due to road conditions or local restrictions this is often an extra cost as the full truckload needs to be unloaded in a warehouse and reloaded in stages onto a smaller delivery vehicle. Packing and unpacking services usually include all packing materials and/or removal of used or unused material. Tariff formats used to be regulated in the early years of the industry. We will still follow some basic lingering standards left over from this original format such as 400N (see below for more info on the 400N Tariff). Tariff formats can vary from customer directed format or an agent directed format, and we typically see agent directed formats for relocation management companies that own or are owned by moving companies.

5 It is important to differentiate between air and surface shipping limits and provisions for cost control purposes... Setting fixed tariffs is high risk for HHG movers, given that the actual cost to move goods can vary significantly based on gas prices, currency fluctuation and other factors. Shipping companies make their money on volume always aiming for full truckloads. As such, smaller shipments may take longer to be delivered, where the shipping company holds the load in the warehouse until it can be added to other loads to fill a trailer. As with air freight there are now road shipment options available for smaller loads through similar casing system used in sea shipments. The HHG provider would case the shipment and utilise the commercial freight forwarding networks to provide quick transit and competitive pricing. In the US the 400N Tariff is a rules and regulations document that is designed to protect the consumer. It outlines certain rights such as providing movers with written estimates, offering minimum levels of insurance, and much more. Other Notes When writing the HHG shipping sections of your global mobility policies, it is important to differentiate between air and surface shipping limits and provisions for cost control purposes defining international shipments in terms of volume limits and domestic shipments in terms of weight limits. Often, these limits will be determined by family size, for example: 20ft container per couple, 40ft container per family 6,000lb per adult, 2,000lb per child It s also important to consider the time it takes to deliver the longer the delivery time, the longer period is needed in temporary housing or paying for rental furniture, which in itself can be costly. It may be more cost effective and provide a better experience to your employees in some cases

6 to offer a cash allowance to purchase replacement furniture or offer air shipment over surface shipment to minimize periods in temporary accommodation in high housing cost locations. When asking for quotes for specific moves, remember to include exact details such as origin and destination, ancillary services required, special packing needed and (if known) weight or volume of goods. Lastly, in recent years a shortage of truck drivers has impacted the industry, with the effects felt more greatly in the US than the EU. For example in the EU a shipping company can maintain trucks and equipment in Spain and easily fly in a driver from Ireland to execute a shipment, whereas in the US, greater distances mean that drivers must work in teams or take longer to complete deliveries. This is due to Department of Transport regulations capping the number of hours a driver can work at a time. The European Union also limits the time heavy goods vehicle drivers can travel and vehicles are fitted with tracking devices for monitoring. Understanding the nature of HHG shipping will help you partner with your relocation management company to set up provisions and limits to those provisions if needed that will provide employees what they need as they relocate or go on assignment. Introductory Glossary of Terms Agent An affiliated moving company authorized to act on behalf of the van line. The agent may handle the booking, origin, hauling and/or destination services. Bill of Lading This is your contract with the carrier. It is your receipt for your goods and the contract for their transportation. Your signature acknowledges that your goods have been loaded on the moving van and released to the carrier.

7 Binding Estimate A binding estimate is an agreement made in advance with the mover that guarantees the total cost of the move based on the quantities and services shown on the estimate. Also see Non- Binding Estimate. Carrier The moving company providing interstate transportation of household goods under whose Department of Transportation registration the shipment is moved. Claim Statement of loss, damage or delay to a household good shipment while in the care, custody or control of the carrier. Destination Agent The agent designated in the destination area to collect and deliver the goods when they arrive in country and be available to assist or provide information regarding the shipment to the customer or the van operator. Diversion When a customer changes the destination of their shipment after it is en route, transportation charges shall be calculated from the point of origin to the point at which the carrier is able to effect the diversion, plus the transportation charge from the diversion point to the new destination point. Inventory A detailed descriptive list of the items in the shipment and their condition before the van is loaded. Order Number Used to identify the customer s shipment and appears on the upper right corner of the Order for Service and the Bill of Lading. This number should be used whenever the carrier is contacted. Survey Performed by an agent to examine the customer s belongings in order to develop an estimate of move charges.

8 Tariff A publication containing the carrier s rates, rules and regulations for services performed, applicable to the customer s move. Third-Party Services Performed by someone other than the carrier or its agents at your request or required by federal, state or local law (e.g., appliance servicing, crating). Unpacking Removing the customer s goods from containers and placing them on a flat surface, as well as the disposal of such containers and packing materials. If ordered, unpacking service must be performed at the time of delivery unless requested otherwise. Valuation A tariff-based level of carrier liability for a customer s household goods while they are in the care, custody and control of the carrier. Valuation is NOT insurance. Van Operator Oversees the loading, hauling and unloading of your possessions. About Topia Topia is the end-to-end global mobility management suite that allows companies to move and manage their global talent. Over 100 global companies rely on Topia s technology and services for relocation and expatriate management, tax and payroll, and immigration data across more than 100 countries with maximum operational efficiency, employee satisfaction and engagement, and assured compliance.