- The Cost Of Shipping A Container
- Are There Any Extra Costs Involved?
- Factors Involved In Container Shipping Costs
- 1 General Rate Increase
- 2 Shipping High Seasons
- 3 Emergency Bunker Surcharge
- 4 Trucking Storage
- 5 Extra Ocean Freight Costs
- How Do Companies Calculate The Container Shipping Costs?
- Cargo Weight
- Mode Of Transport
- Journey Distance
- Destination Port
- Time Of Year
- Insurance For Container Shipping
- Intermodal Transport
- Tracking
- Regulation
- What Documentation Is Required When Shipping A Container?
This is the right article if you are new to the container shipping industry and want to determine the costs. In this article, we will cover everything and anything you need to know to feel confident when needing to cost shipping a container.
Shipping a container is not a very straightforward process. There are several aspects to it that you will need to get your head around before taking the next step.
You may know how the process works but may not be completely aware of the container shipping costs involved. We endeavor to answer all of your questions in the information below.
The Cost of Shipping a Container
As you may know, every country has different container shipping costs. There is no one-size-fits-all, and that is why it is imperative to do enough research so that you can best prepare yourself for the process.
Furthermore, due to the economic climate that we find ourselves in, there has been a dramatic increase in container shipping costs. Our world has undergone many disasters over the past few years, which has inevitably negatively impacted container shipping costs.
Are There Any Extra Costs Involved?
Factors Involved in Container Shipping Costs
Many different things affect the cost of container shipping costs, and you may not be aware of all the factors that influence the ocean freight market. Despite considering volume, route, ports, and carrier charges, five other aspects will affect the price when considering container shipping costs.
So, to answer the question, yes, container shipping may involve extra fees. It is always best to plan ahead of time for these, should they occur, so you do not delay your shipment. Delaying your shipment will have a snowball effect further down the line and will result in further complications.
1. General Rate Increase
The General Rate Increase, also known as GRI, is the ocean freight prices that different shipping companies adjust. The GRI, implemented by shipping companies, is a means of helping carriers recover from seasons that do not bring in much work, also known as downward market movements.
The GRI rate, implemented by the company, is only done if the business is slow and is usually only done once a year. However, it is not uncommon for the GRI price to surface a few times a year if the global economy is struggling.
Furthermore, shipping companies implement the GRI depending solely on the shipping company. The factors that shipping companies consider when considering implementing a GRI include the route it will affect and how much it will affect the route. For example, in the US, shipping companies will need to give a 30-day notice to companies when they are planning to implement a GRI. Therefore, if a customer has placed an order for their cargo to be shipped before the company implements the GRI, then the rate will not affect that order.
2. Shipping High Seasons
The term that comes to mind is supply and demand. So, for example, if the ocean freight season is fruitful and thriving, prices will increase. Planning is an excellent way to ensure that these costs do not become a surprise for you.
What has been considered the high season in container shipping is from July to November or December. The most obvious reason is that organizations will be repairing for the holiday season, and the demand for shipping items will be high. There may also be a peak season surcharge that shipping companies may implement to cater to the extra amount of logistical work required for that season.
3. Emergency Bunker Surcharge
An Emergency Bunker Surcharge (EBS) occurs when there is a rise in fuel costs. Unlike the GRI, the EBS can be implemented at the very last minute and can be pretty inconvenient for companies needing to fork out extra money to cover the costs. In addition, doing so will undoubtedly cause a dent in the shipping budget.
4. Trucking Storage
Within the US, there is a massive shortage regarding the availability of trucks. As you can imagine, this will increasingly negatively impact supply chains.
Consequently, ocean freight prices will rise in response to the shortages of trucks. The benefit of paying a fee for trucking storage is that you are guaranteed a truck in which you can store cargo. If you cannot secure a truck, expect disruptions to your distribution.
To prevent this, plan your route ahead of time or look for alternative ways if needed. Also, having a contingency plan will be highly beneficial.
5. Extra Ocean Freight Costs
Be sure to plan for extra ocean freight costs, such as demurrage and detention, or fees from customs inspections, as there is no way of being able to tell if this is taking place. It is best to have the funding available instead of disrupting your shipment due to a lack of planning.
However, there are also specific steps you can take to ensure that you do not need to pay extra costs as much as possible. For example, ensure that you have completed all of your documentation correctly and on time to prevent having to pay additional fees or fines. The last thing you want is for your ship to stay at customs because they are worried about something in your paperwork. Having to pay extra fees will result in having to pay delay fees on top of this.
Planning your shipment ahead of time is another way to avoid having to pay extra costs. This way, you will give yourself time to ensure that every part of the process is correct.
How Do Companies Calculate the Container Shipping Costs?
Besides the extra fees that may occur, consistent factors influence the amount of money you will need to spend on your shipping container. These include the type of cargo needing to be shipped, the mode of transport, the weight of the cargo, the distance the shipment needs to go, and the popularity of the shipment. Below are further descriptions of the different aspects taken into account when calculating container shipping costs:
Cargo weight
Within sea freight, the most important thing is the dimensions of the goods you want to transport. However, with air freight, the most important thing is the weight of the cargo. So, as you can tell, it depends on the shipment you want to utilize.
Mode of Transport
The type of freight you want to use will determine the price you will be paying. For example, sea freight is much cheaper than air freight (five times cheaper, to be exact). Furthermore, the mode of transport you use will determine the time taken to ship the cargo. For example, air freight is a lot quicker than ocean freight.
Journey Distance
The distance of the journey will very much determine the container shipping costs. The further you want to haul your cargo, the more you will have to pay. Also, the price will go up if you need a door-to-door delivery.
Destination Port
Different countries will have different rates when it comes to customs and taxes. You can only find out what the rates are by doing your research.
Time of Year
As mentioned earlier, there are seasons for shipping when the rates will be higher due to demand-this is known as peak seasons. Due to higher demand, prices will go up, and limited space will probably be available. So, if you can avoid shipping during peak seasons, then do so. If not, then plan and expect an increase in rates.
Insurance for container shipping
Most people will take out insurance to cover their cargo, and in fact, this is a wise idea. You will never be able to plan for every bump in the road, so if your cargo is insured, you can rest assured that insurance can replace your goods in the event of a disaster.
The type of cargo that you want to ship will determine the amount of money you will have to pay for insurance. For example, if you are shipping rare antiques, expect your insurance to be pricey. But, it will be so worth it if something happens to your cargo.
However, there are things that the international shipping industry has implemented to ensure a safer journey for your goods.
Intermodal Transport
Due to shipping companies utilizing steel containers, your cargo can journey via different modes of transport. This way, the shipping company can move your shipment with a very smooth transition between sea and land freight. The best thing is that shipping companies will not need to unload your cargo each time.
Tracking
Just as you can track your Amazon delivery, you can track your cargo when being shipped. Tracking is another safety measure by the international shipping industry to reassure customers.
Regulation
The International Maritime Organization (IMO) is the organization that regulates shipping on a global scale. The IMO ensures that each shipping company adheres to all regulations, which provides safe cargo delivery. But, of course, this can't account for natural disasters.
Therefore, although we cannot predict every hiccup in the road, we can plan as much as possible to ensure that there is the slightest chance for things to go wrong. Your future self will thank your present self for taking the initiative to insure your cargo.
What Documentation is Required When Shipping a Container?
Certain documents are required when entering customs for your cargo to go through customs.
- Commercial Invoice
- Certificate of Origin
- Bill of Landing
- Buyers Purchase Order
- Packing List
- Shipping Bill Export License
- Bill of Entry
Suppose these documents are not readily available at costumes. In that case, you can expect to delay your journey or have your container detained until customs are happy to clear it. Documentation is a crucial part of the process, and it can be planned ahead of time to ensure the smooth sailing of your cargo.
In September 2021, it cost more than $20,000 to ship a container from China to the USA. In June 2022, it cost shipping companies $9,500 to do so.
Therefore, we can easily now say that container shipping costs depend significantly on the country to which you want to transport your cargo, the weight of the shipment if it is peak season, the distance of the journey, and the mode of transport you want to pursue. However, we are now aware that these are not the only factors determining the amount of money you are likely to spend on container shipping costs.
At A1 Auto Transport, you can rest assured knowing that we will deliver your cargo with the utmost care. With our knowledge and expertise, you won't have to fork out copious amounts of dollars to ensure the safe hauling of your goods. Instead, we are here to make the process easier and to give you a reason to trust the process.
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