| Ocean freight rates are on the rise. This is particularly | | | | In addition, your container freight rate may depend |
| true of ocean container shipments. In the last three | | | | on the actual commodity being shipped. |
| months average ocean freight rates (container | | | | Of course there are the myriad of other costs not |
| transport particularly) have climbed up to 55%. Have | | | | directly associated with the ocean freight or |
| you renegotiated your rates lately? If not now is the | | | | container rate, some of which include: |
| time! | | | | Importer security Filing (ISF or 10+2) |
| There are quite a few charges that may be a part | | | | Customs Brokerage |
| of the total ocean / delivery transport costs on a | | | | Duty & Taxes |
| typical import shipment. Some may be negotiable | | | | Stripping and / or Transloading of Container |
| with the carrier / forwarder (given sufficient volume | | | | Interim warehousingand, and, and ... |
| and frequency) and if you understand how ocean | | | | Effectively negotiating ocean freight is not so simple |
| freight rates are calculated. | | | | and depends on knowing more detail. Will you have |
| Let's take a look at what some ocean freight cost | | | | many "one-time" shipments, or more a repetitive |
| components might be: | | | | business with each shipper? How much product are |
| BAF - Bunker Adjustment Factor Surcharge | | | | you shipping at one time, or if repetitive, each |
| ACC - Alameda Corridor Surcharge | | | | shipment? If repetitive, how often? The answers to |
| PNC - Panama Canal Charge | | | | these questions also determine if you want to use a |
| SUZ - Suez Transit Surcharge | | | | freight forwarder or negotiate directly with the |
| PSS - Peak Season Surcharge | | | | ocean carriers. |
| AMS - Advance Manifest Surcharge | | | | Door to door transit time is also a huge consideration. |
| CHS - Chassis Usage Surcharge | | | | Will you ship to a major or "gateway" port and then |
| CAF - Currency Adjustment Factor | | | | truck to multiple distribution centers? Or will it all go |
| DDC - Destination Delivery Charge | | | | to one DC? If you are planning on moving the |
| THC - Terminal Handling Charge | | | | containers intact to an inland DC, some difficulty may |
| ARB - Origin Arbitraries | | | | arise depending on the ocean carrier, and rail charges |
| AGS - Aden Gulf Surcharge | | | | can be quite high. A forwarder (or the customs |
| WRS - War Risk Surcharge | | | | broker) can often manage the container delivery |
| Depending on your terms of sale (Incoterms) you | | | | trucking to and from the port much better than a |
| may pay origin charges including:ORC - Origin | | | | carrier (if the carrier even would). Otherwise you |
| Receiving Charge | | | | must arrange the trucking. |
| ODF - Origin Documentation Fee | | | | Choice of your customs brokers would possibly |
| THC - Terminal Handling Charge | | | | depend on your choice of routing. The delay at |
| DTHC - Destination Terminal Handling Charges | | | | customs will depend on the accuracy and |
| If your shipment is moving inland in the US, you may | | | | completeness of your vendors' documents, as well as |
| pay: | | | | the efficiency of the selected broker. |
| DDC - Destination Delivery Charges | | | | Plan for success! Poor planning can result in much |
| IPI - Inland Point Intermodal or MLB - MiniLandBridge | | | | headache and unnecessary expense. Great success |
| IFC - Inland Fuel Surcharge | | | | will follow your good planning. |