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How to Calculate International Freight Shipping Costs
How to Calculate International Freight Shipping Costs
How to Calculate International Freight Shipping Costs
How to Calculate International Freight Shipping Costs
How to Calculate International Freight Shipping Costs
How to Calculate International Freight Shipping Costs
How to Calculate International Freight Shipping Costs
How to Calculate International Freight Shipping Costs
How to Calculate International Freight Shipping Costs
How to Calculate International Freight Shipping Costs
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How to Calculate International Freight Shipping Costs

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International freight transportation can be overwhelming, especially when calculating shipping costs from a freight forwarder. Do you know the right questions to ask to make sure you receive an …

International freight transportation can be overwhelming, especially when calculating shipping costs from a freight forwarder. Do you know the right questions to ask to make sure you receive an all-inclusive transportation proposal? Do you know to break down the charges once you receive the proposal to make sure there are no hidden line items? Do you know if there are any “add-on” fees that could arise on your invoice? Be in control of your international freight shipping costs by knowing how to analyze your proposal with the following break-down.

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  • 1. Be in control of your international freight shipping costs by knowing how to analyze your freight forwarding proposal.
  • 2. Apples to Apples? International transportation can be overwhelming, especially when calculating international shipping costs from a freight forwarder. •Do you know the right questions to ask to make sure you receive an all- inclusive transportation proposal? •Do you know to break down the charges once you receive the proposal to make sure there are no hidden line items? •Do you know if there are any “add-on” fees that could arise on your invoice?
  • 3. Hidden Charges Breakdown When you are comparing or gathering freight forwarding proposals, it is imperative to beware of line items that could be hidden charges. •Carrier GRI/GRR/PSS: Carriers have been implementing general rate increases (GRIs), general rate restorations (GRRs) and peak season surcharges (PSS); however, some freight forwarders are not informing the customer of these charges until after the cargo is booked. If your cargo ready date falls into surcharge period, be sure the fee is shown up front. •China VAT: Chinese authorities have begun charging transportation companies within the country a value added tax (VAT). If freight forwarders are charged this directly from the carrier, the charge will be added as an extra line item. Verify with your freight forwarder if you do not see China VAT on your proposal for freight that touches China or risk being charges an extra 6 percent when you are invoiced.
  • 4. Hidden Charges Breakdown • Cargo Ready Date: If the cargo ready date the freight forwarder is quoting you is not accurate, the transportation proposal could vary by hundreds of dollars per container. In the current ocean freight rate market, it is imperative the accurate cargo ready date is quoted upfront to avoid any changes in rate. • Cargo Insurance: Be sure that cargo insurance is included as a separate line item. Most times if cargo insurance is not included on a transportation proposal, it is not included in the quotation. When reviewing international shipping proposals, also be sure to verify that the insurance covers freight from origin door to destination door. Often times, insurance offered by the forwarder only cover the goods from port to port, making all drayage claims ineligible. Most damage and pilferage happens from origin door to origin port or from destination port to destination port and, in our opinion, is when the cargo is most susceptible to claims.
  • 5. Hidden Charges Breakdown • Courier/Documentation Fees: When looking at an international shipping proposal, it is important to see if any courier/documentation fees are included or offered as a separate line item. Many freight forwarders could tack on this fee to the invoice, even though it was never included as a line item in the original transportation proposal. • Pallet Fee: When shipping loose cargo, it is important to provide your own pallets or risk being charged a fee to have the cargo packaged on forwarder- owned pallet. If you will not be providing your own pallets, it is imperative to know all charges up front. • Inland Delivery: If you do not specifically ask to be quoted from door-to- door with zip codes included, the forwarder might be charging you from port-to-port. If you are looking for an all-inclusive quote, including inland transportation, be sure to verify that the charge is included on your transportation proposal.
  • 6. Hidden Charges Breakdown • Max Cargo Weight: When shipping a full container load (FCL) of a heavy commodity, it is necessary to verify the max load amount with your carrier of choice. Overweight cargo is subject to additional fees. • Container Management Fee: Some carriers in some select routes have begun implementing a container management fee (CMS) to cover the operational cost in managing container turn time. • Free Time at Destination Port: If you are shipping to a country with higher than average hold times at the port, it is imperative to ask the forwarder how much free time the shipper has at the port. Extra free time at the port can save the customer hundreds of dollars per day, per container in some cases.
  • 7. How to get the best proposal It does not matter if you have a good rate if the proposal does not keep in mind what is most important to your supply chain. Ask your freight forwarder to supply carrier options based on your preference. Is it an issue of price? Ask for the cheapest carrier options. Is it an issue of transportation time? Ask for the most reliable carrier with the lowest transport time. Is there a transshipment with a certain carrier? Keep in mind this could also hold up your shipment for weeks on end. Each transshipment port increases the uncertainty that the freight will arrive on time.
  • 8. The “cheap” freight forwarder Use caution when booking through a freight forwarder whose only benefit is price. You could be paying a lot more in fees in the long run. A cheaper freight forwarder might save you money upfront, but could cause you a headache and hefty fees resulting from improper management. For instance on imports into the United States, if the forwarder and Customs House Broker do not fill our proper Customs documentation ahead of time, the shipper is liable for hefty feed. Noncompliance with the importer security filing (ISF) will cause CBP to levy fines of $5,000 USD to the importer of record.
  • 9. Will the proposal be honored? “What your quoted is what you pay” is not always the motto for some freight forwarders Although it seems elementary, the shipper should always verify with the freight forwarder that their proposal will be honored. What you see might not always be what you pay with some less-than-ethical forwarders. Ask the company for testimonials from other customers that ship in the same trade lanes or the same commodity that you do. If the company is proud of their service, they should be happy to comply.
  • 10. Need help? If you have any questions, or would like an international shipping proposal, please contact Lilly + Associates International at 305-513-9540 or www.shiplilly.com. We would be happy to quote your next shipment or even take a look at your current transportation proposal to see if you could be on the hook for any hidden charges.

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