Shipment of goods across the globe can be a challenging endeavor mostly because of the many variables that can influence the total delivery costs. This is mainly due to sea freight charges which can be easily influenced by the nature of the shipment. There are various factors that contribute to costs when budgeting and planning for ocean cargo transport hence the need to understand what actually causes these costs. This brief insight focuses on five aspects of sea freight charges to assist the owners of consignments in the process.
1. Weight and Dimensions
The weight and volume of the shipment are some of the most important factors that determine the sea freight charges. As it has been operated traditionally costs are often estimated using the volumetric weight of the products which is a combination of the actual weight and size of the cube. The cost of transporting large and heavy items will be higher than that of small and lightweight goods. The rate may be charged based on the level of the supply chain such as per container, per pallet space, or per metric ton.
2. Route and Destination
The other cost factors affecting sea freight include the origin and the destination ports. Routes that connect more frequently visited terminals between large centers may cost less compared to the prices at small regional facilities. As one would expect, the transportation costs are invariably going to be higher in the landlocked countries and they also entail extra costs in the land transport too. There is also a relationship between fuel prices and the distance which is performed by the vehicle.
3. Mode of Transport
There are various kinds of ocean transport depending on the cargo type, which in turn has an impact on the cost factor. For instance, they contain ship services, reefer services, out-of-gauge and over-dimensional vessels, bulk carrier services, liquid bulk and more. The mode used depends on a number of factors including the kind of goods being transported such as dry cargo, perishable goods, automobiles and other large capital assets, grains and minerals, liquids such as oil and chemicals among others.
4. Insurance and Surcharges
Besides basic freight costs, there are usually other costs such as insurance charges, fuel costs, and several other costs incurred. Carriage of goods by transporters involves a cost and to cover the value of the goods while in transit a cost of insurance is added if the shipper requires the goods to be insured. Some of the related charges that help escalate the expenses include fuel prices and security costs.
5. Seasonal or Contract Rates
Another significant element that affects sea freight pricing is the contracting of supplies and seasonal changes in demand. For instance, the time before the holiday season in the west that is considered to be the peak retail season is usually characterized by a high cost of supply since the supply chains are already gearing up for the peak period. While there are the months that experience low demands and therefore come with cheaper freight costs.
Conclusion
Sea freight shipping costs are not only dependent on the cargo characteristics and distance but also on the prevailing market rates and other factors. Issues such as weight measurements, transport route and modes of transport, other fees that may be charged and fluctuations in freight rates depending on the season all must be factored in when planning for sea freight shipping costs.
