Freight forwarding rates are important to understand as an exporter. Paying to have a shipment prepared and sent to another country can be very expensive. Shippers of international goods should know how rates are determined and how they can be reduced before hiring a freight forwarder.
According to the International Chamber of Commerce (ICC), freight forwarding rates are what freight forwarders charge exporters for their services. Rates can vary based on the type of cargo being exported, the cost of a container and other factors. Forwarders will communicate their rate with the exporter using an invoice.
Freight forwarding rates can be tricky to understand, but this article will show you everything you need to know.
The role of a freight forwarder is to prepare and send goods to different countries. There are many costs associated with sending cargo internationally. Freight forwarders have to assume these expenses, which are factored into the rate exporters have to pay.
There are also many services they perform, such as:
These services help make sending goods to another country much easier. At USA Freight Forwarding, we offer competitive rates to customers for sea and air shipping services.
There are many factors to consider when sending goods internationally. Each one could potentially increase a freight forwarder’s rate.
Some of these factors include:
Exporters should understand each of these to avoid any surprises when they have to pay for their shipment. We’ll review the most meaningful of these charges.
There are different modes of transport that are used to send goods to other countries. Ocean shipping is the usual method of international shipping. Despite the long transit times, exporters continue to pick this method because of its reliability. Freight that travels aboard a ship will be placed in a cargo container.
Containerized sea freight is classified as either a:
An FCL allows an exporter to send bulk shipments, whereas LCL gives them the ability to send a smaller amount of goods. On top of being reliable, ocean freight shipping is considerably cheaper than other transport options.
International air is another method of sending goods to between nations. Transportation by plane is much faster than by vessel. However, air cargo shipping is more expensive than ocean travel.
Freight forwarders will charge a higher rate for international air freight to cover the expense of this option. A lower rate will be charged if freight is transported by ship.
The type of cargo that an exporter wants to send can influence a freight forwarder’s cost structure. Certain types of commodities are easier to send than others.
Some types of cargo that can increase a freight forwarders price include:
Typically, a permit for hazardous products and oversized freight is needed to clear U.S. and foreign customs. Freight that’s over dimensional also requires more room aboard a vessel. The weight of this kind of freight can also drive up costs.
Perishable goods play a role in freight forwarding rates. Commodities that have a due date must arrive at the final destination before they expire. This often requires fast and expensive international air shipping.
High value cargo such as jewelry and artwork can impact rates as well. Special precautions have to be taken to protect this kind of cargo. Typically, exporters need high value goods like these to be protected by insurance.
Coverage on high value goods will raise the amount a shipper will have to pay. Exporters should be aware of how their freight can affect a freight forwarder’s pricing structure.
Packing and palletizing an international shipment is another factor that influences a freight forwarders costs. Space inside a cargo container or a plane is limited. Palletizing freight keeps all items in a shipment together and maximizes space.
This method of packing freight helps keep it safe while in transit as well. However, stacking freight and strapping it to a pallet is physical labor. Therefore, many freight forwarders will charge to perform this service. What they charge will be factored into the overall rate.
The cost of a container is something else an exporter will have to consider when it comes to freight forwarding rates. Container costs will only alter a freight forwarder’s rate if goods are being shipped as ocean freight. Container shipping costs can fluctuate greatly.
| Highest Cost | Average Cost | Lowest Cost |
| $7,500 + | $3,000 | $1,200 |
Provided by Forbes
Ranges have to be given for container shipping costs because every shipment is different. There are numerous factors that can cause container prices to fluctuate. This makes giving an exact amount difficult.
Some of the reasons container prices can vary include:
Freight forwarders will have to pay container shipping costs when they take on a client’s cargo. This amount will be reflected in the rate that an exporter will have to pay. FCL shipments usually cost less than LCL shipments, regardless of container transport costs.
LCL shipments are calculated based on the volume of freight in the container, while FCLs are charged a flat fee for the whole container. Shipping lines also prefer FCLs because it’s easier for them to calculate costs.
Before a freight shipment can be taken to the airport or ocean port, a ground carrier has to pick it up. Typically, freight is shipped by truck. However, many ocean ports can accommodate rail freight.
Freight forwarders factor in the cost to transport freight from an airport to an ocean port in their negotiations with you. If rail shipping is used for this part of a shipment’s journey, the rate is likely to be slightly cheaper. This form of shipping is more fuel efficient than truck, which reduces costs.
The amount an ocean carrier or airliner charges to transport freight internationally determines a freight forwarder’s fee. Many of the factors that influence container shipping rates are the same for ocean carriers and airliners. However, there are some unique reasons that will raise or lower these costs.
They include:
Carrier alliances are when multiple ocean shipping companies form an agreement with one another. In some cases, they will decide on what transport costs to charge customers. Regulations changes refer to the rules that ocean carriers have to follow when leaving and entering ports of different countries.
A rate will rise or fall based on what ocean carriers and airliners charge to move cargo. That said, a freight forwarder will try to find a carrier with the cheapest price. They’ll also negotiate with the transportation provider to get the lowest amount possible.
Freight of all varieties will be subject to handling fees. These charges can be applied when a shipment is taken to an airport or ocean port. The carriers that transport freight to another country will bill for these expenses as well.
Handling fees are can be charged when:
Essentially, the amount a carrier charges for handling fees will vary based on the complexity of the freight. The sum will then be reflected in the freight forwarder’s pricing.
Security of freight during international shipping is important to all senders and receivers. Even carriers want the freight they transport to stay secure for safety and regulatory reasons. For example, airlines have to obey regulations created by the Transportation Security Administration (TSA).
The TSA requires that all cargo transported by air be physically screened or X-rayed. Airlines charge a fee to perform this responsibility. Freight forwarders will have to pay this fee when they organize an air shipment. Therefore, the TSA screening fee contributes to a rate increase.
Other TSA security fees that airlines will charge to freight forwarders include:
Part 135 aircraft operators are pilots that transport passengers and cargo to remote destinations. The Part 119 designation applies to pilots that operate civil aircraft as a carrier, commercial operator, or both.
Pilots are also given the Part 119 designation if they operate:
Freight forwarding rates can also increase or decrease due to ocean freight security fees. The International Maritime Organization (IMO) requires shipping lines to follow the security measures outlined in the International Ship and Port Facility Security (ISPS) Code.
These regulations ensure that ports and the freight that travels between them is safe for transport. The ISPS can impose costs on the shipping lines and other parties that have to abide by this measure. As a result, freight forwarders will have to pay whatever security fees apply, which raise the rate they charge a client.
Exporters aren’t completely helpless to the factors that cause freight forwarding rates to rise. There are a few ways they can lower the price they’ll have to pay for an organized international shipment.
This includes:
Fortunately, using these methods are very easy to follow, and they can make the shipping process smoother for exporters.
Consolidating international shipments is a great way to reduce freight forwarding rates. This service works by combining multiple loads together. Freight consolidation can be used for ocean and international air shipping.
LCLs are usually more expensive than FCLs because their cost is determined by volume or weight. If an exporter has multiple LCLs, they should combine them into one FCL instead. Likewise, international air shipments are very expensive. Combining different loads into one will be more cost-effective for air transport.
Freight forwarders do charge for consolidation, which affects their rate. That said, paying for this service is much cheaper than paying for multiple LCLs or small air shipments.
Picking the best mode of transport for cargo to travel is another way to lower the rate of freight forwarding services. Often, the best mode of shipping for international freight is by vessel. While this option takes longer, it’s the cheapest and most reliable. More freight can fit into a marine cargo container than in an air cargo container.
International air shipping is extremely expensive. Hiring a freight forwarder to organize this type of shipment will raise their rate. Therefore, exporters should avoid using this mode of transport unless they need to send freight to another country quickly.
Last minute shipments can increase a freight forwarders pricing. International shipping requires arduous amounts of planning. A load that needs to make it onto a plane or cargo ship in a short period of time rushes the entire process.
This can create numerous problems for freight forwarders such as:
If a freight forwarder schedules an expedited shipment, there’s a possibility that vessels and planes going to the final destination will have limited availability. This means a freight forwarder has to pay more to secure space for your shipment.
Loads that are scheduled last minute often use expedited transport. The measures that carriers have to take to perform this service can drive up expenses. Lastly, freight that’s scheduled last minute is more at risk for delays. These occur because expedited shipments aren’t as thoroughly planned.
Exporters should give their freight forwarder enough time to plan out the journey of their cargo, regardless of the mode of transport that will be used.
Conducting negotiations is another great way to reduce freight forwarding costs. This is much easier to do when an exporter has established a long relationship with a forwarder. However, newer international shippers won’t have this type of connection.
Exporters can also negotiate cheaper freight forwarding rates by:
Freight forwarders will charge for the handling of cargo. Shippers can reduce the amount they have to pay for this service by preparing their goods. This gives exporters the opportunity to negotiate a cheaper rate because less handling is required.
Understanding the export process will also give international freight shippers a better chance to negotiate price. There are various costs associated with shipping goods to foreign countries. These charges can vary based on the shipment of freight being transported. Exporters can use this information to make a case for a cheaper freight forwarding rate.
Listing all the services required for an international shipment is another way shippers can lower costs. Freight forwarders might perform unnecessary services for certain shipments. Always request an itemized invoice.
Exporters should explain what services they require to reduce the amount of preparations that have to be completed. This will put shippers in a position to bargain for a cheaper freight forwarding price.
There is no set average for international freight forwarding rates. The cost to send freight to another country can fluctuate based on various factors and rates are typically quoted on a case-by-case basis. That said, exporters can expect to spend anywhere between a few hundred to a few thousand dollars when they use the services of a freight forwarder.
Rather than look for the average rate, shippers should research how much it will cost to send their specific cargo to another country. This will help exporters understand the unique responsibilities that have to be completed for their shipment. Senders of international freight can use the information they’ve gathered to estimate a rate that a freight forwarder might charge.
Freight forwarders provide their customers with an invoice that lists all the services that will be completed when preparing and sending a shipment. A freight forwarder invoice is very similar to a regular freight invoice or freight bill.
This document will contain details about each service performed and the charges that have to be paid for each. Information about additional taxes and fees will be included as well.
A freight forwarder’s invoice will also have:
It’s important to understand the information that’s included on this type of invoice. It will help an exporter determine if a mistake was made or if they’re being overcharged.
USA Freight Forwarding can handle all of your international shipment needs. Our of experts know how to prepare and handle all varieties of freight. We also provide different services that you’ll be able to use.
They include:
With our ocean and international air transport, you can choose the mode of transport that will work best for your shipment. Our consulting services will allow you to sit down with one of our experienced forwarders. You’ll have access to world-class knowledge and can even ask questions relating to the freight forwarding process.
Get in touch with USA Freight Forwarding at our contact page or call the team at (866) 941-8081 for more information.
