Throughout the years, transporting cargo to international destinations has become more accessible. At present, the shipping of goods is a regular occurrence within the logistics and shipping industries. Customers have three choices – air, ocean, and land. For deliveries of cargo to countries separated by sea, ocean freight remains the most popular option. One reason is that it cost much less than air transport.
When Use Ocean Freight
Ocean freight shipping allows transporting massive cargo by sea using container ships, also called cargo ships. These large vessels can accommodate an enormous number of storage containers from different customers.
There are two types of ocean freight services:
Full container load (FCL). A customer pays for the whole container, regardless if filled or not. By shipping through this method, it is best to fill it up, leaving little to no more storage space, to maximize the shipping fee.
Less than container load (LCL). A customer who cannot fill an entire container can choose to share a container with other customers. Finding others to share with is not a concern of the customers but rather the customs broker. Although the cost of shipment fee per item is higher than that of FCL, LCL makes it possible to ship small cargo sizes.
Related article: Which Is Better: Air Shipping vs Ocean Shipping
Factors That Affect Ocean Freight Shipping Cost
Delivery of goods to customers is integral to businesses with customers worldwide. It is, therefore, essential to know the factors that affect the cost of ocean freight shipping. A complete understanding of the processes involved lets you avoid incurring expensive fees.
Generally, there are two elements to the cost of shipping containers by sea freight. One is the sea freight rates of ocean freight carriers. The other is the fees associated with the handling of foods at the ports.
1. Customs Taxes and Duties
Commonly, the importation of goods is greatly affected by customs laws and regulations. Based on the items’ classification, each country may impose taxes and duties that vary from one to the other. One of the things customs brokers do is try putting your products in a category in which you can pay cheaper fees – legally.
2. Fuel Cost
As you can imagine, cargo ships are enormous vessels that consume much fuel. The fluctuations in the cost of fuel, no matter how small, gets magnified. For example, a Panamax shipping container ship that can carry 5,000 TEU can store between 1.5 to 2 million gallons and consume up to 63,000 gallons a day. Every cent essentially is worth $10,000.
3. Supply and Demand
During times wherein the demand for cargo space is high, it is natural for ocean freight forwarders to charge higher shipping rates.
4. Destination
Closely related to supply and demand law, sea freight rates to common destinations are usually low, especially with stiff competition among ocean freight forwarders. However, with lesser customer availability and fewer ocean freight forwarders servicing uncommon destinations, the cost of shipping will be relatively high.
5. Currency Fluctuations
Even though most ocean freight forwarders use US dollars, they are still vulnerable to fluctuating foreign exchange rates. For example, a cargo ship arrives in a destination country. One expense is refuelling and restocking food supplies for the next trip. For payment, they may have to use the local currency.
6. Terminal Fees and Service Surcharges
Shipping docks charge terminal and handling fees. There may be plenty of other charges, such as security or fees for hazardous materials.
Related article: How Much Does Ocean Freight Shipping Costs in Canada?
Use a Trustworthy Sea Freight Forwarder
In all shipping methods to other countries, understanding the fees charged to customers is very important. By looking at the factors mentioned above, you must always be ready to expect possible surcharges subjected to some conditions implemented by shipping companies. It is best for you to thoroughly study and understand the formal quotation given to you by your preferred ocean freight forwarder.
We advise you to look for a trustworthy company for any inquiries or pricing-related concerns to ship your cargo to other countries. Ensure that the company will be transparent with all the fees to avoid paying for unnecessary charges.
As one of Canada’s sought-after shipping companies, you can contact Ontario Container Transport at (905) 695 1501. Rest assured, you will only pay for what is required and nothing more. We see to it that we take care of our customers because we are focused on giving the best customer experience at all times.
