In this article we will talk to foreign trade professionals who already master practices in the execution of their tasks, but seek to better understand what makes up the international freight used for the transportation of cargo.
This information is relevant in the composition of the service’s pricing. This is because they help determine which factors most influence the oscillation of sea and air freight costs in international logistics.
Thus, it is necessary to understand what includes an international freight quotation in the partnership with the cargo agent who will move your goods.
Especially because, thus, it is included in the calculation for the final destination all information or specificity of the load, avoiding surprises and additional expenses.
It’s worth checking out!
What information is needed to quote international shipping?
Today, the negotiations of international freight are experiencing difficulties in the face of the already known instability in foreign trade of our time.
As a consequence, professionals in the area need to evaluate with even greater caution the processes that will be used to guide themselves in an assertive business technique, especially in maritime and air modals.
These are the two most used modalities in the movements of international logistics.
To clarify, it is recommended the use of ships for the transport of heavy or higher volumes cargo, with low added value and with land destination.
Just as it is recommended to use aircraft for lighter loads, small dimensions, but with high added value. Especially if there is an urgency that this cargo arrives at the final destination more quickly. They are also recommended for perishables.
In order to organize all the information about what makes up the international freight, it should be based on an operation planning and an analysis of the quotation, verifying the best price and cost-benefit in the partnership with the cargo agent.
Above all, it is necessary to indicate the particularities of the cargo that will be moved, in addition to the documents for the due pricing of freight that will take place between the countries of origin and destination.
Below, we list the main information that make up international shipping:
- cities of departure and arrival of cargo;
- delivery time of the goods;
- weight and dimensions of the load;
- content and value of the goods;
- transport modality to be used;
- registration data to ensure delivery.
What makes up international sea freight?
The costs that make up the international freight for the movement of goods in Foreign Trade, executed by the cargo agent, vary according to the desired operation and are through the BID or FOB quotation models, according to the needs of each company.
Sea freight can be contracted directly or indirectly, aligning, among other information, the data of values and deadlines.
Therefore, in the calculation it is necessary to consider the rates defined by the carrier or the shipowner, in addition to the costs relevant to the handling of cargo and customs clearance in ports.
We list some costs that are paid in sea freight:
- bunker additional fuel (BAF) – fuel surcharge;
- heavy lift charge – overweight;
- extra lenght charge – large volumes;
- currency adjustment factor – exchange rate adjustment;
- open rate – offer on tramps or outsiders ships;
- through rate – transhipment between conveyors.
What makes up international air freight?
As for the planning to be done to measure the costs that make up international freight, it is necessary to be judicious to avoid failures or, even, certain fees that can increase the final pricing.
Because any surplus amounts will directly impact the final price of the product that will be sent to your consumer, which will cause unnecessary wear and tear on the commercial relationship.
Thus, as the exchange rate variation is large in the international market, if there is any change in value in the initial quotation request, it is worth leaving indicated what will be the possible costs due in logistics operations.
Or, also, just mention as estimates and thus make clear what may happen with each line that makes up the international freight requested.
We list some of the costs that make up air freight:
- minimum freight – volume less than half a ton;
- ad valorem rate – high added value;
- capatazia (THC – Terminal Handling Charge) – cargo handling;
- fuel surcharge charge – aircraft fuel;
- pick-up and delivery – delivery and collection;
- customs clearance – common in INCOTERMS EXW (Ex-Works) and DDU (Delivery Duty Unpaid).
What influences the variation of the values that make up international freight?
The instability that has been occurring in the freight market in this “post pandemic” scenario is being very unusual in foreign trade.
The pricing that makes up international freight should be evaluated more closely by those responsible in the negotiations of cargo movements, in search of a technique that drives the business efficiently and effectively.
That is, in more difficult times due to the crisis of the Covid-19 pandemic and its damaging effects, fueled by a war conflict with no expected end date, the global market continues to be affected and this results in strong volatility for foreign trade.
In principle, the oscillations caused between the supply of ships and the demand for cargo to move is what specifically determines the costs that make up international freight.
Consequently, when instability in freight pricing requires constant planning, even if the manager cannot directly interfere with value, it is necessary to understand the variables, such as economic, political and social factors, for a better understanding of the dynamics in the change of routes. They are:
- exchange rate variation;
- oscillation of the economy;
- political divergence;
- natural disasters, wars and crime.
Experts claim that the “relief” passed on to the freight cost on the Asia-Brazil route was ephemeral, and later came a considerable rise in average prices – costing more than six times as much as before the health crisis.
In addition, the persistence in bottlenecks between shipments and disembarkations, the formation of queues at ports, another recent lockdown in China and the war between Russia and Ukraine are circumstances that signal this “new normal” that make up international freight.
As a result, the increase in the production of the sums occurs, leading Brazil to import and export inflation, with records of high peaks in foreign trade.
At Cheap2Ship you negotiate international freight in an automated way!
Successive lockdowns in China, the widespread lack of insum and containers, the fuel crisis and queues are factors that have greatly affected the management of international transport, making it difficult to control freight costs efficiently.
Thus, through 100% digital freight management with a dynamic and simplified platform of Cheap2Ship you will be able to access indicators, charts and reports that will bring greater assertiveness and operational speed in the control of all your freight.
You’ll be able to view all your suppliers and choose the best options with several benefits, such as:
- agility in processes;
- reduction of operating costs;
- transparency and security (in accordance with the world’s modern anti-corruption laws).
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