How Ocean Freight Rates are Determined
Most businesses on a global scale rely on ocean freight to get their products to international markets. But third party logistics providers, freight forwarders, and others in the logistics field understand the variable levies which are imposed on international trade shipments. As a business with a significant stake in the process, understanding how ocean freight rates are determined can have a huge impact on the final cost of your products. Here are five big factors that influence ocean freight rates.
Fuel cost is a factor for all forms of freight shipping – ground, air, and ocean freight. Bunker fuel is closely related to the cost of oil, so when the price of oil goes up, the price of bunker fuel goes up as well, and consequently ocean freight rates increase.
Seasons can play a major role in determining ocean freight rates for many goods. During high seasons, the changes in supply and demand can make some goods more expensive to ship. And inclement weather can dock smaller ships and cause a temporary fluctuation in shipping rates.
Service Charges and Fees
When goods are shipped on ocean tankers, terminal fees are charged at the ports of departure and arrival. In addition, port authorities can levy additional service charges on ships. These can be reflected in ocean freight rates.
Fluctuations in Currency
With an international market, it’s reasonable to expect currency fluctuations to affect the cost of shipping goods overseas. The U.S. dollar is the standard for international transactions, but the daily movement of the money markets can influence ocean freight rates.
In order to get the best possible rates, it is preferable to fill shipping containers to capacity. The shipper is expected to cover the cost of a container, even if the quantity of goods shipped doesn’t fill it.
Trust AFP Global Logistics for all of your ocean freight needs! We can help you make sense of the process and get you the best ocean freight rates possible.
AFP Global Logistics
For any and all of your full-service freight forwarding needs in Baltimore, Maryland, Washington, D.C., and beyond, look no further than AFP Global Logistics. We provide a full range of shipping and logistics services, and our 25 years in the business have given us the tools we need to create customized logistics solutions that are tailored to the needs of each client we serve. We have what it takes to provide superior shipping and logistics solutions in Washington DC, Maryland, and the greater Metro region that your business needs to thrive. For more information or to start designing your own logistic solutions today, get in touch with AFP Global Logistics at 410.590.1234 (toll-free 800.274.1237), email us at firstname.lastname@example.org, or fill out our quick and easy contact form here!