When is the Best Time to
Negotiate Ocean Freight
Rates?

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We are happy to announce the Xeneta
11-part FAQ series focusing on key
questions related to freight rate
benchmarking and procurement.

The series provides answers to the most frequently asked
questions revolving around the complex world of ocean freight rate benchmarking and
procurement.
It provides you some tips and tricks to make the process a little
less painful. We'll release one FAQ per week, so please follow our
blog to stay updated.

Knowing when is the
best time to negotiate
freight rates depends on
who you are as an entity
and what is most
suitable for you, for your
business and for your
supply chain.

For example, if you are a
seller trading with a buyer in
a new country, then the best
time for you to benchmark
and negotiate ocean freight
rates is BEFORE you finalize
the trade deal or the sales
contract.

This would be important
as the ocean freight
rates, and the associated
charges that you
negotiate can influence
the shipping terms
(Incoterms®) you agree
with your trading partner.
CIF, CFR, CPT, CIP. This
may apply even if you
are selling to a new
customer with higher
volumes in a country
that you are already
trading in.

Learn how Xeneta can help
You get insight and intelligence into
your global ocean freight prices and
change your logistics business:
Request
Demo Now

If you are an OTI
(Freight Forwarder or
NVOCC)

You may need a fixed, long-term ocean
freight negotiation schedule to utilize
your volumes and secure a good FAK
rate (Freight All Kinds).

If you are a BCO
(Beneficial Cargo
Owner)

You may choose to negotiate ocean freight
rates based on a tender. You may float this
tender in line with your financial year which
may be the middle of the year or end of the
year. Besides, it is worth considering
launching a bid outside the peak shipping
season. Lower shipping demand might
prompt carriers to offer and commit to
better deals.

If you are an OTI
(Freight Forwarder or
NVOCC)

You will need to negotiate your rates well in
advance of the next season. While
negotiating ocean freight rates in this space,
you may need to consider how the season
has been and how the commodity is
expected to sell for the next season.

• ENS is an acronym for ENtry Summary
Declaration.
• ENS is required by EU customs to do a
security assessment of all cargo entering
EU ports
• Carriers can use their discretion as to the
quantum of the ENS charge
If you are involved in ocean freight
rate negotiations, you always can
use freight benchmarking tools to
choose the right time to negotiate
the ocean freight rate based on
historical, present and future
contract-rate data, global trends on
trade, capacity development and
shipping agreements of your peers.