Shipping rates are constantly fluctuating. If you’re involved in maritime trade in any way, these shipping rates will impact your bottom line. Whether you’re a merchant or a freight forwarder – budgeting for fluctuating shipping rates is essential. Believe it or not, shipping rates have fluctuated up and down by 50% in one day in the past.
The shipping industry is highly competitive and not a monopoly. That means shipping companies cannot control shipping rates. Shipping rates will always be uncertain. Thankfully, they’re not an absolute mystery. These rates depend on a plethora of economic and non-economic circumstances.
Here are seven surprising factors that may impact your container shipping rates –
1. Fuel Costs
The cost of all maritime transport is directly related to the cost of fuel. If fuel prices dwindle, container ships become less expensive to operate. The price of shipping containers to local or foreign destinations goes down. If fuel prices soar, carriers and shipping companies pass on the extra expense to their customers.
2. Your Route Optimization Capability
Since the COVID19 pandemic, the demand for overnight deliveries has skyrocketed. That’s why vendors, traders, freight forwarders, etc., should optimize their shipping routes. The more optimized your shipping routes, the faster your deliveries. The faster your deliveries, the lower your shipping fees.
The best way to optimize shipping routes is by using your shipments’ locational data. Use the latest container or shipment tracking tools. Always keep an eye on your shipments’ real-time locational data with these tools. Use the data to plan your routes and delivery strategies.
3. Market Demand
When shipping companies have large cargo volumes on their vessels, their capacities are limited. Your shipping company may decide to sell its space at premium prices. In contrast, when demand for shopping services is low, shipping companies and carriers may offer their services at discount rates.
4. Customer Loyalty
If you’re a merchant who regularly partners with a specific carrier or shipping company, you may receive discounts. Long-term customers of shipping companies often receive services at preferential rates, particularly when market demand is low.
5. The Destination of Your Containers
If your containers travel on international waters, they may be subjected to extra customs fees. Your shipping company will extend these extra customs fees to your bill. Some of these fees include –
- Customs duties
- Service fees like container inspection fees
- Port service charges
- Terminal handling charges
- Inland delivery fees
- General rate increase
- Insurance coverage
- Quarantine fees (new fee applicable at select ports)
Track your shipments to know ahead of time which ports they’re traveling through. Discuss these added fees with your shipping company.
6. Size and Weight of Your Container
All container shipping fees are determined by the weight or dimensions of the shipments.
7. Shippin g Distance
Lastly, distance dictates your container shipping charges. Local shipping, of course, costs less than international shipping. The further your containers have to travel, the more it will cost you to get them there.
Your reputation as a freight forwarder, trader, or merchant depends on your ability to cut extra transportation costs. Use this guide and advanced shipment tracking tools to achieve these objectives!