Which factors have an influence on Ocean Freight quotes?
Understand Logistics & Freight
The freight quotation is the start of all shipping processes, and the costs involved are based on the nature of the cargo, the origin and destination, as well as the transport of choice. Ocean freight is well known for being one of the most cost-effective ways of moving cargo internationally, so let’s take a look at what affects the rate of ocean freight shipping.
As expected, the longer the trip, the higher the costs. Sending shipments to farther destinations uses more fuel and requires more labor from the ship crew.
There are two reasons why the seasons have an influence on the quote, the first one being the weather conditions, that have the power to affect trips as well as products, and the second one being the traffic of goods, that can have busier seasons and this has an effect on the transportation prices.
Fees and Incoterms
There are multiple fees that need to be taken care of when transporting goods: port fees, service fees, and, in case delays happen, extra fees may also be added. Shipping costs are also directly tied to the Incoterm settled between the shipper and the buyer.
Fuel and currency fluctuations
Dollars are the standard currency for international trade, and since the money market suffers constant changes, the prices for ocean freight are constantly changing as well. The same goes for fuel prices.
We can usually get better prices if our cargo occupies an entire container (FCL), since we pay the price for the container space inside the vessel whether our cargo fills it entirely or not. A good alternative for smaller shipments is to share a container load with others (LCL) if possible.