How to determine freight costs?

When you are into import and export business you will need to acquire the services of a freight company at some point. The international trading market is massive, and many different freight companies offer their cargo services in Jeddah. But you must know that not all companies present a good choice. The safety of your shipments is at stake here, so you must choose your partner wisely. Most businessmen are looking for ways to cut costs so that they can offer their products at competitive prices. But the cheapest possible solution is not always the best solution, and you will often have to make some compromises. So is there a way to determine freight costs, so that you can make a good business strategy? We know a few tricks that could help you with this problem, so stay with us to learn more.

Choosing a reliable logistics partner will help you to determine freight cost more easily

It is easy to calculate your shipping costs when you are doing business with a company that offers transparent, understandable, and quality services. So, how to find such a logistics partner?

  • Customer service quality. Does the company answer their customers’ questions in a timely manner?
  • State of their equipment and vehicles. Their equipment must be of the highest quality if you don’t want any shipment delays.
  • How long do they exist? Tradition speaks volumes about experience, expertise, and knowledge in international trade.
  • Is the company stable financially? Check their financial reports to avoid future payment delays and to ensure your future partner can cope with emergencies and urgent needs.
  • The number of services they provide. Moving and transportation services, freight forwarding services, storage services, and customs clearance services are just some of the services that every reputable logistics company should have on their portfolio.

    Picture of traits of reliable shipping agencies. Doing business with reliable partners will make it easier for you to determine freight costs
    When you are shipping your products worldwide you must have reliable partners

What are freight rates and why are they important?

Freight rates are similar in concept to moving quotes that apply for residential moving and relocation services. First of all, freight costs depend on the type of transportation. The price is not the same when shipping goods by air, sea, and land. For example, Air cargo Bahrain doesn’t cost the same as shipping by land. Likewise, there are some other factors that you must be aware of:

  • Total weight of the shipment. Always determine the weight of your shipment, and don’t attempt to lie on the bill of landing because shipping companies have their own scales. Violation of rules may result in hefty fines.
  • Documentation costs. International shipping requires in-depth documentation, and these administrative services are not cheap.
  • Shipment destination. The total traveling length plays a key role in determining the final price for your shipment.
  • Type of products. Different products have different shipping costs. For example, shipping large machinery will cost you more than shipping pencils.

    Picture of a pile of papers
    If you wish to determine freight costs you must take administrative costs into consideration

Other factors that will help you to determine freight costs

  • Customs clearance. All international shipments must pass through customs. For this reason, it is important to choose a reliable partner that has all the right licenses and that will guarantee fast and safe clearance of goods, especially if customs rules are as strict as in Saudi Arabia.
  • Security costs. Do your shipments require special attention or additional security measures?
  • Currency adjusting factors. When shipping goods internationally your freight forwarder will have the option for edging of currency.
  • Storage costs. Shipping goods with an expiry date means that you will have to pay for climate-controlled storage units.
  • Terminal handling charges. When shipping goods by air or sea you will have to pay for container handling services at ports and warehouses.
  • Dimensional shipping factor. Some companies take the dimensions of crates into account. If this is the case, you must determine the dimensional weight. When the dimensional weight is greater than the actual weight, you must use the dimensional weight.

    Picture of approved stamp
    All international shipments must pass the customs clearance procedure

How to determine freight quotes for your products?

The definition of freight says that freight is one large item or a group of smaller items with a combined weight of 150 lbs. or greater that are being transported for personal or commercial purposes. There are a few simple ways to determine your freight costs:

  • Calculate the volume of your products. Measure the length, height, and width of your products to find their cubic feet. Multiply this result with the number of products to determine the total weight of the shipment.
  • Use a large scale like a forklift scale to determine the weight of products. Don’t forget to include the weight of the packaging.
  • Estimate the freight class.
  • See what additional shipping requirements you need. These include safety measures, climate controlled warehouses, insurance policies, delivery speed, and destination.

How to save money on shipping costs?

  • Pay attention to your paperwork. One of the most common shipping mistakes is the wrong shipping documentation. Pay attention and don’t put wrong dates and shipping addresses.
  • Use slower shipping. While your shipments will travel slowly, you will ship them in advance. Your customers don’t know about his, and you will even be able to advertise fast shipping. You will save some money, and your customers will get their goods on time.
  • Use electronic documentation when possible to save time
  • Optimize your packaging. The goal is to find lightweight packaging that does its job and protects your products.
  • Consider cargo insurance. Your shipments should be covered in the case of damage and theft if you wish to avoid unnecessary costs. On the other hand, if you don’t have many returns, cargo insurance might be a waste of money.

All things considered, you should always determine freight costs and see where you can make the cuts. This is essential as it will allow you to offer competitive prices and make your customers happy in the long run.

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