Ocean shipping is an excellent way to import goods cheaply, and it is generally very reliable. As long as companies pay close attention to transit times, ocean freight allows supply chains to stay moving at a fraction of the cost of air freight.
However, ocean freight costs can fluctuate based on a number of factors, and not all are predictable. To plan your business and keep costs low, it’s important for importers to understand all possible charges and fees associated with international freight.
Port fees and rates differences between container sizes are mostly static, but even these can fluctuate in the right conditions. The biggest variables for senders are peak seasons, fuel costs, and storage fees caused by delays.
Bunker Fluctuations
The cost of fuel is not as variable as it is for air freight, but it can still fluctuate. Ocean freight shipping uses Heavy Freight Oil (HFO), which is cheap and efficient. Like any oil, the cost of the raw materials can vary depending on the overall market for oil.
The International Maritime Organization has created new regulations requiring cargo fuel to have dramatically lower sulfur emissions than before. Although the exact requirements vary by shipping route area, all shipping routes are expected to switch to fuel that is somewhat more expensive. This policy came into effect in January and has already had an impact on shipping services’ costs.
Fees and Charges
Ports charge facility fees can vary based on location and season, and may even fluctuate if there are delays that force goods to be stored. However, they do not usually change dramatically or arbitrarily and are usually more predictable than fuel costs.
Freight rates may also be impacted by security fees charged by the carrier. Shipments must be protected as they are prepared for export and import, and the carrier passes this cost on to both the buyer and the seller. Plus, carriers may charge additional security fees for shipments through high-risk areas.
FCL or LCL
Less than Container Load (LCL) shipping rates charge senders only for the portion of a shipping container that they use. This shipping rate is good for senders who only send small shipments because they can split a container with other senders. However, the resulting rate by volume is slightly higher because of the labor required to coordinate and combine the shipments.
Full Container Load (FCL) shipping provides better rates by volume because it simplifies shipping and just changes senders for the full container. Shippers who send small quantities of items at a time may benefit from LCL shipping, but all other shippers should try to use FCL shipping to secure the best rates. It may also be strategic to send fewer, larger orders in order to secure FCL rates.
The amount of difference between LCL and FCL rates is moderate but can vary from carrier to carrier. A freight forwarder can help minimize fluctuations in this cost by working to secure space on the carrier with the best rates.
Accounting for Customs
Delays at customs can result in additional charges and fees. If a shipment’s paperwork is missing information or is incorrect, customs officials have the authority to detain shipments until the problem is fixed. Usually, this results in additional fees, including storage and demurrage.
To keep your final per-item shipping cost as low as possible, you’ll want a freight forwarder and customs broker who can help avoid demurrage fees. By working with a freight forwarder in advance of a shipment, you can make sure the paperwork is done correctly.
Seasonal and Weather Fluctuations
Like most industries, ocean shipping has peak seasons. The months of September and October tend to be in-demand times, as they are retailers’ last chance to import goods before Christmas. Ocean rates during this time can increase by up to 50%.
Monsoon and typhoon seasons can also affect shipping rates from Asia by forcing smaller ships to stay at the harbor. The resulting shortage of space drives up the rates freighters will charge. However, ocean freight is generally less prone to weather delays than air freight.
Help From a Freight Forwarder
Getting the best rates possible doesn’t require a ton of research or technical know-how. Asiana USA has built relationships with carriers to help give you the international shipping best rates possible in any season. Our customer service team can help you optimize your ocean cargo route and complete customs paperwork to avoid unnecessary costs.
We specialize in multiple routes between Asia and the United States and have offices in Bangladesh, China, and Thailand to help our U.S. offices communicate smoothly. Contact us at (855)-500-1808 for an ocean freight quote or more information about our services and how we can help your business.
