Today, shipping costs have become one of your biggest logistics expenses. In a global supply chain, you need to closely manage international air and sea freight costs, which are critical to your bottom line. cargo booking To do this, you must have a thorough understanding of how these costs are calculated. Becoming an expert in transportation cost management is not something you can do overnight. With this article, you will gain a basic understanding of global shipping pricing and become a smarter buyer.
Get fair and accurate air and sea pricing, starting with you.
In order for international shipping cost to provide a quotation that is realistic for students, carrier and freight forwarder issues require us to base on certain relevant data, and usually in this case, the company does not find these analytical data through collection and inspection before seeking quotation. container shipping rates At this point, you can see the accompanying sidebar for the information you need.
Freight forwarders need to know not only the goods to be shipped, but also the transportation conditions. For example, do you only need port to port shipping? Because the cost of inter-port transport is significantly different from the cost of door-to-door service.
The terms of sale between you and the buyer's supplier also affect the scope of shipping services and the composition of international shipping costs. If your product is purchased from an overseas supplier and the transaction is delivered from a factory, you will be responsible for all transportation costs from the overseas factory to your location. For example, if the transaction method is CIF Long Beach, your fees and liabilities will be calculated from the port of destination. freight booking Please refer to our InCOterms Guide regarding the responsibilities of buyers and sellers in international sales.
For air and sea freight, you can get better international rates with freight forwarders who have multiple contracts (specific capacity agreements based on routes) with multiple carriers, unless you have a direct contract with the carrier or have a large shipment.
Calculation of air freight
Depending on the freight speed you require, carriers can offer different levels of air transport services. Through the most cost-effective and sustainable means of aggregating air freight, we can take advantage of the fixed aggregating flights of freight forwarders on certain channels. Standard service is the second best option in your budget, it meets your service requirements and can deliver goods faster than non-air transport options. If you need a fast and next flight departure (NFO) service, it will obviously cost more.
Air freight quotes may mainly include the origin cost of transporting the goods to the airport and the destination cost of transporting the goods to the consignee. Our teachers can understand the students through in-depth learning about their actual air freight costs and how to calculate and analyze these financial costs to determine your international freight. One important thing you need to understand is that airlines will charge according to the gross weight or volumetric weight of our cargo, whichever is higher. Volumetric weight, also known as dimensional weight, is the weight estimated based on the length, width and height of the package.
The following is a further discussion of the volumetric weight problem.
Air transport has space and weight restrictions on cargo, and carriers need to balance costs and revenues to prevent spending more than they earn. For example, large quantities of cotton balls are lightweight, but they take up a lot of space and take up space for other cargo in the cargo hold. On the other hand, due to the weight limit of the aircraft, the two plates of steel bars will also crowd out the loading capacity of other cargo. Thus, cotton will be priced by volume and weight, while rebar will be charged by gross weight. The price of air cargo is calculated in kilograms, and the higher of the gross and volumetric weight is considered as the "chargeable weight".
In addition to the actual transport costs, there are a number of additional costs associated with air transport, known as extra costs, which may include:
Fuel surcharges relate to airlines' fuel-related costs - and fuel surcharges typically fluctuate with the price of fuel
Security surcharge, which is used by businesses to pay airports to conduct inspection work services to ensure compliance
Customs agency fee
Terminal handling charge
Dangerous goods charge. Dangerous goods charge
Depending on the airline's requirements and your cargo specifications, there are a number of additional charges that may affect your international shipping costs.
Calculation of sea freight
Sea freight costs are often more complex to calculate than air freight costs and can vary by port and country. As with air freight, you will need to pay the carrier the cost of transporting the goods, as well as the cost of transporting the goods to and from the port of origin and destination.
The biggest factor affecting the price of sea freight services is whether the cargo needs to be filled with containers (FCL) or can be mixed with other cargo (LCL).
For FCL, shipping companies can be unified management fees according to the type of container used, the main content includes the following three different types, namely 20 feet container, 40 feet container and 40 cubic feet container. Our Container Specification Guide study provides the dimensions for each container type to help you determine if a container is suitable for your Chinese cargo.
LCL prices are not easy to calculate because you have to share the freight with other shippers. LCL is priced based on revenue tonnes (R/t), and R/t is calculated based on weight or size, whichever is greater. The calculation method is similar to the calculation method of gross/volume weight in air transport. In LCL, when the weight is converted to R/T, a coefficient of 1000KG = 1r/t is usually used. If measured by size, a coefficient of 1 CBM = 1 r/T is used. Please note that the conversion factor varies from channel to channel.
CBM calculators are easy to calculate and can help you calculate the weight and volume of your consignment.
Maritime freight forwarders are implementing consolidation plans for all major ports in the world. They order a certain number of complete containers from the carrier and then ship them in a warehouse near the port.
Small volume shippers can save money by shipping LCL, but the price per cubic meter of LCL is higher than FCL due to the related operation of parallel loading. However, due to the low price of FCL shipping, it is worth using FCL shipping even if the number of your goods is much lower than what FCL shipping can accommodate. On different waterways, the critical point for loading a 20-foot container is different, but the starting point is generally about 20 cubic meters.
In addition to the carrier's freight, ocean freight quotes may include mainly additional costs with the following:
Container yard charges (LCL only)
Terminal handling charge
Customs agency fee
Pick-up and delivery charges
Fuel charge (fuel surcharge)
Currency adjustment factor (compensation for exchange rate risk when goods are paid in foreign currency)