5 strategies to get the best sea freight quote and carrier
Sea Freight Quotations – I hear some freight estimators across the globe let out a collective sigh of exasperation when this topic is mentioned..
Is the importance of complexities of a sea freight quotation exaggerated..??
Sea freight quotation and negotiation could be easy as pie or it could be a highly complex process.. Why is it so..??
Say you are a freight forwarder and your client is asking you for a simple rate based on a Port to Port movement – say from Seattle to Hong Kong.. Both are major ports on the Trans Pacific route so it should be simple enough to find out the shipping lines operating between these two ports.. Easy as pie..
On the other hand imagine your same client requests for rate from ICD Delhi in India to Kitwe in Zambia for Out of Gauge cargo, say a Transformer.. It becomes a highly complex quote because
- The Place of Receipt and Place of Delivery both are inland locations
- Not all carriers offer this option so you may need to hunt a bit more
- The Place of Delivery spans a couple of countries between Port of Discharge and Place of Delivery – in this case POD would be Durban and the cargo will have to move by road inland from Durban, cross over Zimbabwe (another country) and then cross over to Zambia
This means that if you are issuing a through bill of lading from POL to POD, your freight quote should include border clearances, customs clearance, route clearances, out of gauge permits etc etc..
So what is the best strategy to get the best sea freight quote and Carrier..??
Here are 5 strategies that you can adopt..
- Whichever the route, always select the quickest routing (lesser transhipment ports) and transit time as that is one of the main items that your customer would be looking for and as their agent, expect you to take care of (unless otherwise they require a longer transit)..While getting the best possible freight rate is important, I am yet to come across many customers that would compromise getting their cargo to the destination on time and in good condition in favour of cheaper rates..
- Check and ensure that the freight rate that you receive from the carrier and the quote to your client is comprehensive and has all the required charges as per the terms of contract – Door to Door, Port to Port etc and covers all areas..Although every client may have a preferred Carrier that they would like to use, it is prudent to shop around with a couple of carriers in order to ascertain that you are being given the best rate by your preferred carrier..
- But for your own benefit do remember Shopping around ≠ Horse-trading.. There is a big difference between the two and if you start Horse-trading then better be ready to face the consequences such as shipping lines going out of business and taking your cargo with it..
- Be open and upfront with the carriers that you use and describe the full scope of services to them so that they can be upfront with you and advise all the applicable charges so there are no surprises later to you, your shipper or their consignee..
- Another incentive you can offer the carrier in exchange for the best rate is to sign something like a volume based service contract whereby you commit a certain volume within a fixed period of time to the carrier who in turn will be able to give you a better rate compared to your competition..
Depending on the country, destination, cargo, type of container, volume etc, there are several other strategies that you can follow in order to secure the best ocean freight rate from the best suited carrier, but above are the 5 key strategies that will eventually pay off for you..