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Ocean freight rates are on the rise. Is it time to renegotiate your rates?

Ocean freight rates are on the rise.  This is specifically real of ocean container shipments.  In the final a few months typical ocean freight rates (container transportation specifically) have climbed up to fifty five%.  Have you renegotiated your rates recently?  If not, now is the time!

There are quite a few prices that might be a portion of the total ocean / shipping and delivery transportation fees on a normal import shipment.  Some might be negotiable with the carrier / forwarder (given ample volume and frequency) and if you understand how ocean freight rates are calculated. 

Let us get a seem at what some ocean freight price elements could possibly be:

BAF – Bunker Adjustment Variable Surcharge

ACC – Alameda Corridor Surcharge

PNC – Panama Canal Cost

SUZ – Suez Transit Surcharge

PSS – Peak Year Surcharge

AMS – Progress Manifest Surcharge

CHS – Chassis Utilization Surcharge

CAF – Currency Adjustment Variable

DDC – Location Delivery Cost

THC – Terminal Dealing with Cost

ARB – Origin Arbitraries

AGS – Aden Gulf Surcharge

WRS – War Danger Surcharge

Based on your conditions of sale (Incoterms) you might pay origin prices which includes:

ORC – Origin Getting Cost

ODF – Origin Documentation Expenses

THC – Terminal Dealing with Charges

DTHC – Location Terminal Dealing with Charges

If your shipment is moving inland in the US, you might pay:

DDC – Location Delivery Charges

IPI – Inland Level Intermodal or MLB – MiniLandBridge

IFC – Inland Gasoline Surcharge

In addition, your container freight level might rely on the precise commodity getting transported. 

Of training course there are the myriad of other fees not immediately related with the ocean freight or container level, some of which contain:

Importer protection Submitting (ISF or ten+two)

Customs Brokerage

Responsibility & Taxes

Stripping and / or Transloading of Containers

Interim warehousing

and, and, and …

Correctly negotiating ocean freight is not so easy and relies upon on knowing additional element.  Will you have lots of “a person-time” shipments, or additional a repetitive enterprise with each and every shipper?  How substantially product are you transport at a person time, or if repetitive, each and every shipment?  If repetitive, how generally?  The responses to these inquiries also determine if you want to use a freight forwarder or negotiate immediately with the ocean carriers.

Doorway to doorway transit time is also a huge consideration.  Will you ship to a main or “gateway” port and then truck to various distribution centers?  Or will it all go to a person DC?  If you are arranging on moving the containers intact to an inland DC, some issues might occur based on the ocean carrier, and rail prices can be quite higher.  A forwarder (or the customs broker) can generally handle the container shipping and delivery trucking to and from the port substantially much better than a carrier (if the carrier even would).  If not you ought to arrange the trucking.

Decision of your customs brokers would probably rely on your preference of routing.  The hold off at customs will rely on the accuracy and completeness of your vendors’ paperwork, as nicely as the effectiveness of the chosen broker.

Approach for results!  Bad arranging can consequence in substantially headache and unnecessary price.  Good results will adhere to your excellent arranging.

If you require additional element or clarification, we will be joyful to work with you to setup a bid or RFP (Request For Proposal), or to audit or overview your current rates and procedures for possible improvement.

Call us now at inquiry@raymcguire.com for additional facts.

  

Ray McGuire Consulting Team  gives direction, instruments and coaching to support you immediately and effectively execute international and domestic logistics, stock management, agent/supplier associations, basic safety, social and governmental compliance or protection courses.

Increasing pace-to-market even though reducing fees!

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