Ocean Freight

Ocean Freight

Know How Ocean Freight Works

Ocean freight has been known as a widely used manner of shipping goods from one point to another. In fact, it has been a major component of international trade.

Whether you are exporting or importing, you can do so with the help of shipping companies that offer full container load (FCL) and less than container load (LCL) arrangements. You can go for the FCL option if you are sending or receiving a filled-up container, or LCL if you are only expecting a small number of goods and cannot fill the whole container. The latter is also called shared shipping.

According to a report, international trade done through the ocean accounts for 60 percent of the entire business activities worldwide. It is worth noting that container ships carried a total load of 1.7 billion tons in 2016. The same report revealed that the container ships’ capacity climbed by around 10 times, from 1990 to 2016. In the meantime, it has been projected that the number of container ships in the global trading arena would reach 5,000 by December 2020.

Ocean Freight Rates

When taking advantage of an ocean freight service, one of your considerations would be the rates you are going to pay. Would the shipping cost be maximized considering the volume of goods you are sending or receiving? Which among the available shipping lines should you deal with? These could be the questions that you are going to think about when making a shipping-related decision.

No matter what decision you would have, you may check the following factors that compose or dictate the ocean freight costs:

Fuel Used. When it comes to transportation, no matter what mode you are seriously considering, the cost of fuel will always form part of the payment you are making. The bunker fuel’s price is basically dictated by the cost of oil in the international market. Therefore, if oil prices are low, you can expect that the shipping cost would be more affordable as well.

Supply and Demand. You can expect that the ocean freight rates would be higher if there is a strong demand for certain goods in a particular period. If these commodities have a high demand in the international market at a given season, you can anticipate a movement in the shipping cost, too. This is happening because many traders of such product will be booking a freight service during that season.

Currency. If you are talking of trading in the global market, the currency, such as the US Dollar, plays an important role. Of course, you already know that it is the widely accepted currency used in dealing with a buyer or supplier from a different country. In short, if the dollar rate changes, there could be changes as well in the ocean freight costs.

Destination. Think about the fare you are paying when going somewhere. The rate is definitely higher when the destination is farther from your starting or pick-up point, right? This is also the case in shipping. The company is expected to bill you higher when the destination of your cargo is farther from your location.

For more details, please visit freight-calculator.com or call our global telephone number 305-815-3619.

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