International freight shipping for the past couple of years has been challenging – especially for SMB importers and exporters.
At the beginning of the pandemic, freight prices shot up with consumer demand, causing congestion, delays, and inventory gaps.
Now two years into the supply chain crisis, rates are beginning to stabilize – although on some lanes’ prices are still significantly higher than they were pre-pandemic.
When booking international freight, it’s important to keep an eye on price fluctuations, transit time changes, and other factors, since these can dramatically affect your business. Here’s what you need to know about international freight right now.
Freight Market Update [October 2022]
Overall, freight rates are about 50% lower than they were last year. This is mainly because of inflation, which in turn has caused consumers to reduce spending.
In fact, 66% of SMBs surveyed by Freightos.com in June 2022 reported slowing in sales attributed to inflation.
Another reason for reduced consumer demand for imported goods is that in the post-pandemic economy, people are spending more on services, travel, and entertainment
But spending on goods is still strong despite recent slowing, and while things are smoother now, supply chains can break down. Labor disputes, inclement weather, COVID-19 outbreaks, and any number of other disruptions mean that shippers need to be savvy about freight.
Keeping costs down, avoiding unnecessary fees and penalties, and getting goods delivered on time is critical to any business’s bottom line.
Unpredictable freight rates, port congestion, and fluctuating demand have made freight rates less reliable.
This means that for any shipper, the flexibility to compare quotes and choose the right rate for each shipment can be a huge advantage. Here are 5 tips for getting better freight rates for your international shipments – even when the market is unpredictable:
1. Get multiple quotes
Getting rates from multiple freight forwarders lets you compare price, routing, and estimated transit time so that you can find the best quote for every shipment.
But make sure when you compare quotes that you are getting a detailed breakdown of what’s included in the price. Look out for these details when checking freight quotes from various freight forwarders to avoid surprises:
- Correct origin and destination details
- Main freight charges
- Custom clearance charges
- Warehouse and ground transportation charges
- Port charges and equipment fees
- Additional service fees
2. Try different shipping modes and lanes
Closures and congestion on the shipping lane you usually use can be costly and frustrating. One way to overcome volatility is to look at alternate routes and modes. Here are some examples of how flexibility can help you ship smoother:
- If you typically ship air, consider whether shipping a higher volume of goods by ocean might be more cost efficient.
- If you are shipping FCL but are struggling with long transit times, consider splitting shipments up. Switching to LCL or air cargo could help keep your inventory moving.
- If your regular shipping lane is bogged down by delays, consider shipping to alternate ports and use inland transport for delivery.
3. Double check your shipping details
International freight involves a lot of documentation and forms. Making sure these are accurate can prevent shipment delays and extra charges.
- Accurate measurements and labeling can make or break your profitability – about 20% of charges added after booking result from incorrect measurements.
- Proper licensing can prevent your shipments from being held up at customs, which costs both time and money in avoidable penalties.
- Communicate about requirements like special product handling, extra packaging, additional equipment support, or any non-standard service before shipping to avoid service disruptions, expensive accessorials, or extra charges.
4. Keep seasonality in mind
When you are getting freight quotes for your international shipments, keep in mind that freight costs fluctuate by season.
- Peak season for ocean shipping is usually August-October when businesses stock up on back-to-school and holiday inventory. During this time, prices can climb as capacity decreases.
- Lunar New Year in late January or early February shuts down most east Asian factories and manufacturers which can lead to a short period of congestion and elevated prices.
5. Use a freight marketplace
Getting multiple quotes from different forwarders can be time-consuming – and until fairly recently could only be done by reaching out to providers one by one. But freight is going digital, and now shippers can get quotes instantly from dozens of freight forwarders.
The power to compare multiple quotes can help save you time and money, plus by using an online freight marketplace, you also gain the flexibility to switch modes, lanes, or providers depending on specific shipping needs.
Marketplaces provide a number of additional benefits:
Marketplaces collect pricing and transit time data from lots of service providers so you can compare delivery times, prices, and service standards – and choose the best option for every shipment.
By using a freight marketplace, you’ll get full transparency into what each quote includes. Since quotes are standardized, you won’t have to guess what services are included.
Picking the right freight forwarder can be confusing, but hearing from other importers and exporters can make the decision easier. Marketplaces let you assess the performance of different logistics providers before committing.
Ship better on the Freightos.com marketplace
With ongoing supply chain disruptions, using a freight marketplace like Freightos.com can provide the flexibility you need to keep goods moving, on time, and within budget.
Compare dozens of quotes from vetted freight forwarders and choose the lane, service, and mode that is right for each shipment – and switch easily whenever you want.
Corinne Berzon leads acquisition marketing at Freightos.com, the world’s largest online freight booking platform. With deep industry knowledge and years of experience in content creation, Corinne shines a light into the dark corners of the supply chain, illuminating shipping for importers and exporters of every size.