Bunker Prices (or BAF) the floating part of sea freight charges which represents oil prices.

Currency Adjustment Factor (CAF) is a fee placed on top of freighting charges to offset any losses from fluctuating exchange rates.

Service Changes: Whenever there are significant changes in services, capacities, alliances etc., this affects rates and opens opportunity to renegotiate.

Space: The bigger the imbalance between supply and demand for space, the bigger the discount or premium.

Weight: Some trades can be weight restricted prior to being space restricted.

Equipment: On each trade lane carriers know whether they have a deficit or surplus of each container type.

Cross Subsidies: Both customers and carriers can use cross subsidy tactics between trade lanes or container types to their advantage.

Risk: Your volatility of a trade will determine whether you pay a premium for a longer validity or get a discount for the promise of long term support.

Extension to detention free time can increase rates as the lines prefer their empties returned quickly.

Intended destination: In simple terms, the longer the journey, the higher the shipping rates.

Season: Seasonal cargo (eg fruit and vegetables) will have higher cargo rates during their seasons.

Fines and Fees: If there is any delay in reaching port due to over-crowding, there might be a fine imposed.

Terminal Fees: Fees at origin and destination known as terminal fees also affect freight rates.

Finding the balance between price and service isn’t easy when so many factors must be considered but investing the time to ensure you are sitting comfortably in a range that provides value to your business is key.

Smart supply chain professionals understand that true savings are in the innovative and creative ways they can successfully measure and improve their supply chain and not just in freight rates.

As a China freight forwarder, we provide the most competitive ocean freight, air freight, DHL FedEx UPS TNT freight.

What is a demurrage fee and what are the common causes of demurrage fees

“Demurrage is a charge levied by the Carrier(Such as EMC,APL,COSCO,OOCL,HPL…Etc) to the importer who they have not taken delivery of the full container and move it out of the port/yard area longer than the agreed free time.”

Demurrage charges as well as by carrier, should best to ensure how much free time you get exactly ,in order to avoid matters further, a designated free time of typically 3 to 5 days.Demurrage amounts may differ based on terminal or S and often increase after an initial period of time.Demurrage charge is an avoidable cost carefully.However if you don’t take care of this problem,charges will overtake the price of the shipments soon which will leave many buyers to abandon the cargo without any option.

Demurrage Charge should be cost with variety of reasons. Generally caused as below:

1.Importer or their agent in destination port did not receive the documents(Bill of loading,CIPL…Etc) in time for customs clearance in Destination Port.

2.Documentation received by consignee(Or their agent) is incorrect or insufficient.Such as the B/L details not match with the CIPL.

3.Importer or their freight forwarder was unaware of the Delivery time of the cargo and was unable to do the customs clearance in time

4.Importer or their freight forwarder does not have the finances in order to clear the container overtake the agreed free time

5.Shipper and consignee have big trouble

Although these reasons may caused by shipper or consignee, usually the demurrage charges and duty will falls upon the consignee.

As a example, take a customer who purchase goods which volume have 6×40′ containers of Hardware from China, but the containers cannot be cleared due to don’t arrange customs clearance in time.Let’s say the Carrier’s demurrage charge is USD100/40’/day for the first 10 days after the expiry of free days.

As we can see any delays caused due to the above reasons will result in extra and avoidable costs for you.

 
Our Winsail Logistics always provide you with relevant industry consultation, and at any time for you to quote, interested parties can contact us.The following is our related push industry news, you can understand：

Global Port Congestion: Causes, Impact, And Solutions

Air Freight Container: Optimizing Cargo Transport

Everything You Need To Know About Bill Of Lading

How To Clear Customs From China?

HOW TO SECURE CARGO?

Effective Ways To Reduce Shipping Cost