Robert Keen, Director General of the British International Freight Association takes a look at the main factors influencing cost when agreeing a freight forwarder deal…
The five main factors that influence cost are:
- mode of transport, for instance airfreight can be significantly more expensive than transit by road, rail or ship
- distance/destination – the farther your goods have to travel, or the more unusual the destination, the higher costs are likely to be
- weight and volume – charges are usually based on the weight of goods, but calculation switches to volume above a certain threshold (one cubic metre per tonne for shipping, three for road, and six for air)
- value – in some instances, such as with earthenware and woollen textiles, charges are calculated on the basis of the goods' value per tonne
- the type of contract you have with the freight forwarder – while most forwarders usually charge per shipment, some will agree an annual service contract, so you should weigh up the costs and benefits of each type
Loads that require special handling of any sort will usually attract an extra charge. This covers items such as dangerous goods, perishable goods and live animals, outsize goods that don't fit in standard containers, other irregular goods, such as a load that must not have anything stacked on top of it, or goods that require a special crane for loading.
Extra charges depend on your contract. Freight forwarders and carriers sometimes add an additional fee for handling these types of products. Always ensure that you get a full quotation from your freight forwarder and understand exactly what you are and what you are not paying for.
Some dangerous goods travelling by road, normally moving in large quantities, may be subject to legislation. Exporters should read the guidance for businesses on transport security for dangerous goods available on the Department for Transport’s website.
Bear in mind that asking your freight forwarder to provide secondary services, such as arranging customs clearance or insurance cover, will obviously lead to higher charges.
Find out more about the work of the association and the services it offers at www.bifa.org