Understanding International Freight Quotes: A Complete Breakdown of Charges & Fees

Eli DolganskyFreight Forwarding, Shipping Guide, Shipping Rates41 Comments

Do you know the right questions to ask to ensure you receive an all-inclusive international freight quote? Do you know to breakdown the charges once you receive the proposal to make sure there are no hidden line items? Are you aware of the potential fees that might show up on your final invoice? Be in control of your international freight shipping costs by knowing how to analyze your proposal with the following breakdown.

The importance of your “Cargo Ready Date”

A cargo ready date is when a shipper/manufacturer is ready to give cargo to a transportation business or service for delivery to the buyer. Unfortunately, if cargo isn’t ready until after the agreed-upon cargo ready date (CRD), a delay in delivery will occur. And this could also mean an additional fee.

While it seems like a few days’ difference in your CRD isn’t a big deal, it is to carriers. In general, carriers issue shipping proposals that are valid for approximately two-week time periods, after which the proposal’s rates may be invalid. If your proposal includes the wrong CRD or a changed CRD, you could end up having to pay hundreds of dollars more than your original quoted price.

Common fees and potential hidden charges

Imagine opening up your final invoice for your cargo shipment and seeing a total higher than you expected. For some reason, a couple of fees have been tacked on to your order. You either get that typical sinking feeling in the pit of your stomach, or you take the alternative route and get angry.

The truth is that there are a number of fees shippers may not know about when they’re booking cargo. In the long run, these fees can add up, inherently causing higher total costs and inevitably resulting in unhappy customers. However, if you’re aware of these possible fees when you’re setting up your logistics needs, you’ll have far less of a chance of seeing surprise expenses included in your final freight shipping costs.

Customs Examination Fees

Normally, customs will conduct exams targeted at specific issues or particular shipment types (especially dangerous cargo). However, even if you aren’t doing anything wrong or your goods aren’t subject to these kinds of examinations, you could still be affected by random exams. At this point, you’d have to pay a fee, and possibly even deal with more charges incurred from delayed cargo if the examination goes longer than expected.

On the less-intensive end of the spectrum, customs may only ask to review your official shipping documents, but you also need to be prepared for the reality of more comprehensive examinations. For example, your cargo may have to be put through x-ray scanners, or even physically unloaded and inspected to make sure it meets specific requirements. Of course, you can do your best to stay out of trouble with customs, but you never know when a random exam (and resulting fee) will happen.

General Rate Increase (GRI)

A general rate increase is a surcharge which carriers add on top of their regular base rates. A GRI can occur across all or only a few trade routes during a specific time frame. Usually, carriers announce the updated costs at the beginning of the month and will adjust rates based on the current volume situation.

If you aren’t aware of a carrier’s GRI, and your cargo ready date falls within a surcharge period, you could be looking at extra costs added to your final shipment invoice. Some freight forwarders don’t inform customers of GRIs until cargo is booked, so it’s important to make sure you ask, or do your own research about surcharge periods and ensure any GRI surcharges are shown up front on your freight proposal.

Note: Some carriers refer to these surcharges as General Rate Restoration (GRR), but they are no different than a GRI.

Inland Delivery Charges

If you do not specifically ask to be quoted door-to-door (with origin and destination zip codes), the forwarder might be charging you a port to port rate.

Not all cargo can be shipped directly from one port to another. Sometimes, goods need to be transported over land to a port (or vice versa) before they can be delivered to the buyer. As such, you need to pay attention to whether or not your shipping quote includes the inland delivery fees, and doesn’t just cover port-to-port transportation.

Often times, if you don’t ask (or your freight forwarder doesn’t ask you) about inland delivery, your international shipping proposal won’t include delivery across land — that’s just how some carriers work. You’ll then be looking at adding on more expenses to your overall shipping costs.

Customs Duties

It seems like common sense, but not all buyers factor the expense of duty rates into their overall shipping costs. Don’t make the same mistake; do your homework and talk to your freight forwarder or carrier about duties you can expect to pay for your goods. It’s best to plan for higher fees and end up keeping some of your budgeted money once you pay your final total.

Additionally, if your products are changed or altered in any way before they arrive at customs, they could incur different duty rates than you were originally quoted. The same is true with goods which were improperly classified (intentionally or not). In this case, you could end up paying thousands of dollars to sort out the seemingly minor problem with customs. Essentially, customs has the right to charge you as much as the domestic value of your goods (in fraud situations) and up to two to four times the amount of duty you actually owe (in negligence situations).

Demurrage

Demurrage is a fee applied to cargo which stays too long at a destination port. In general, you won’t have to worry about incurring demurrage if you’re aware of how much time you’re allowed to keep your cargo at port (usually 4-7 days), both in import and export situations. A problem arises, however, when you don’t educate yourself about your free time at port, or assume that time is the same length at all ports where your cargo arrives.

For example, if the country you’re shipping your goods to has higher hold times at port than another country, you’ll be dealing with detention and demurrage fees you could have avoided if you’d done some more research. And unfortunately, demurrage can be a costly mistake, adding up to hundreds of dollars for each day your goods sit at port.

China VAT

Since 2013, Chinese authorities have been charging transportation companies within the country a value added tax (VAT). If freight forwarders are charged this directly from the carrier, the charge will be added as an extra line item. Verify with your freight forwarder if you do not see China VAT on your proposal for freight that touches China or risk being charged an extra 6% when you are invoiced.

Cargo Insurance

Be sure that cargo insurance is included as a separate line item. Most times if cargo insurance is not included on a transportation proposal, it is not included in the quotation. When reviewing international freight shipping proposals, also be sure to verify that the insurance covers freight from origin door to destination door. Often times, insurance offered by the forwarder only covers the goods from port to port, making all drayage (trucking) claims ineligible. Often times, damage and pilferage happen between the origin door and origin port or destination port and destination door. In our opinion, this is when the cargo is most susceptible to claims. Read more about cargo insurance: Are your goods actually covered?

Courier & Documentation Fees

When looking at your freight quote, see if any courier or documentation fees are included or offered as a separate line item. Many freight forwarders will add this fee onto the invoice, despite it never being included as a line item in your original transportation proposal.

Paying unexpected fees is not a fun surprise to deal with. But a little education and preparation can go a long way towards avoiding undue fees placed on your cargo. If you do your best to plan for all possible expenses and scenarios, you won’t have to worry about owing more money in the long run on your international shipping orders.

Pallet Fee

When shipping loose cargo, it is important to provide your own pallets or risk being charged a fee to have the cargo packaged on forwarder-owned pallet. If you will not be providing your own pallets, it is imperative to know all charges up front.

Overweight Containers

When shipping a full container load (FCL) of a heavy commodity, it is necessary to verify the max load amount with your carrier of choice. Overweight cargo is subject to additional fees.

Container Management Fee

Some carriers in some select routes have begun implementing a container management fee (CMS) to cover the operational cost in managing container turn time.

How to get the best freight quote

Ask your freight forwarder to supply multiple carrier options based on your preferences. Are you hoping to reduce costs? Let your forwarder know you are interested in the cheapest options and provide a target rate if possible. Are you hoping to reduce transportation time? Ask for the most reliable carriers with the fastest transit times. Is there a transshipment with a certain carrier? Keep in mind that transshipments may hold up your shipment for weeks on end. Each transshipment port increases the uncertainty that the freight will arrive on time.

A cheap freight forwarder may have hidden costs. It’s tempting to go with the cheapest freight forwarder you can find, and it might save you money upfront, but you’re likely to end up with hefty fees resulting from improper management. For instance, with imports into the United States, if the forwarder and Customs Brokerage do not fill out proper Customs documentation ahead of time, the shipper is liable for hefty fees. Noncompliance with the importer security filing (ISF) will cause CBP to levy fines of $5,000 USD to the importer of record.

Will the freight proposal be honored? Although it seems elementary, the shipper should always verify with the freight forwarder that their proposal will be honored. What you see might not always be what you pay with some less-than-ethical forwarders. Ask the company for testimonials from other customers that ship in the same trade lanes or the same commodity that you do. If the company is proud of their service, they should be happy to comply.

What’s your “final invoice” story? Have you ever faced additional fees you didn’t know about up front? Share with us in the comments below.

Eli Dolgansky
Eli is a member of the Business Development team here at LILLY + Associates with almost 10 years in the logistics industry. Fluent in Hebrew, Russian & English, Eli handles numerous international and domestic clients helping them find the best shipping solutions worldwide while providing top level customer service.

41 Comments on “Understanding International Freight Quotes: A Complete Breakdown of Charges & Fees”

  1. Luis Orta

    Greetings, I’m looking for new markets so I’m interested about to know all cost that I have to handle to export my products. In what way can you offer me your service?.

    Thanks,I will aprreciate your answer.

    1. LILLY + Associates
      LILLY + Associates

      Hi Luis, thanks for reaching out! I have forwarded your request to a member of our Business Development team. They will be contacting you shortly.

  2. Adam

    This is very interesting. Thanks for publishing. I am interested in hearing about how most people request quotes/proposals from freight forwarders and what the quotes/proposals back look like.

    1. LILLY + Associates
      LILLY + Associates

      Hi Adam, glad you enjoyed the article! There are a few ways to request a quote – call or email a member of our team, or simply fill out a form on our website. In each scenario a representative will walk you through the entire process and send a proposal based on your specific needs.

  3. Josefina Munoz

    I need assistance re my import from Rockton, Illinois 61072 to Singapore. Can your team send me a proposal for a 20 ft container that ships out every quarter? How do I achieve or maximize savings if I give a contract order to the freight forwarder for all my shipping on an annual basis.

    1. LILLY + Associates
      LILLY + Associates

      Hi Josefina – I have forwarded your information to a member of our team and they will contact you shortly. Thanks for reaching out!

  4. Virgil Ratliff

    Hi Eli!

    appreciate everything you posted on this blog. Thanks a lot for this very educational article.

  5. Tehgah

    Please advise, are the following charges not included in freight rates;
    1. BAF
    2.CAF
    3.ISPS
    4.CTN
    5.Congestion fees etc
    Am l expected to pay separately for all these charges or they are already part of the freight

    1. LILLY + Associates
      LILLY + Associates

      Hi Tehgah – thank you for reaching out! Freight quotes are typically subject to these additional charges as they may fluctuate.

  6. Kalpesh Patel

    Thanks for kind information.
    As I m looking forward for more details from yr team.
    Reply awaited
    Thanks.

    1. LILLY + Associates
      LILLY + Associates

      Hi Kalpesh – thank you for taking the time to read our article. We are glad you enjoyed it!

  7. Abdul Rajak

    Hi sir.. could you pls quote to me the freight charges ( CIF) frm port banddar Abbas, IRAN to Lumut port. Malaysia.

    Product: – Gypsum Rock
    Qty :- 50,000.00 Metric tons

    Thank you.

    Razak

    1. LILLY + Associates
      LILLY + Associates

      Hi Abdul – we are more than happy to help! I have shared your information with a member of our team and they will be in contact shortly.

  8. Najma Qureshi

    Its a very useful and very informative article. Thank you so much sir for uploading this information. I got to know so many interesting things about freight forwarding.

  9. Maxwell

    Hi, thanks for the insightful article. Hoping you may enlighten me further on riddle I have been trying to solve without apparent possible success. out company import goods from china. We pay goods at source on fob+cif c basis. However our clearing agents still charge shipping freight as a separate item, and inland transport as well. Is this right. We are in south Africa.

    Regards

    1. LILLY + Associates
      LILLY + Associates

      Hi Maxwell – when purchasing goods on FOB or CIF terms, you are still responsible for the freight charges. DDP or DDU are freight prepaid terms. Thanks!

  10. Jaime

    I’m having a “final invoice moment” right now. I originally expected around $900-$1000 and it’s over $1600 with all the add-one. I’m still trying to sort out what they’re charging me for. It’s not the duties catching me off guard, by a lot of other things seem to have been tacked on. How do I know what’s right? I’m going to have to study it carefully. Thanks for the info.

    1. LILLY + Associates
      LILLY + Associates

      Hi Jaime – are you able to revert back to your original quotation? Please ensure that you are looking at all of the items at the bottom that may say “subject too.” Hope this helps!

    1. LILLY + Associates
      LILLY + Associates

      Hi Ali – we would suggest reverting to the shipper or party you paid in full, they should have more information on this specific case. Hope this helps!

  11. Maria

    Hi Lilly + Assoc.

    I have 2 diff shipping companies (Bidvest panalpina +Aeromarine)

    Bidvest does not charge vat on cartage for imported goods but the other is?

    please help me understand.

    thank you

    Maria Fortein

    1. LILLY + Associates
      LILLY + Associates

      Hi Maria – I would assume that Aeromarine has already included their VAT in their charges and that is why you do not see it broken out. Hope this helps!

  12. Miroslav

    Thanks for very helpful article! We have just imported some goods from Peru to Canada with DHL. One of our shipments was on FCA terms of shipping and prorate was approximately $400 CAD. Unfortunately, the final bill we received today from DHL was almost $1,500 CAD! One of items on this invoice was “”Taxes on origin colo” – $500 USD. We scrutinized the bill and realized this charge is not tax, but rather a bill paid to some trucking company in Peru. Also we are charged $395 CAD for inspection done in New York even though we had no any influence on the routing of this shipment. For our second shipment from the same origin, inspection charge in USA was over $1100 USD? Could you please tell me are this charges legitimate and do we have any way to place complain?

    1. LILLY + Associates
      LILLY + Associates

      Hi Miroslav – unfortunately when inspections occur, the receiver is responsible for these charges. I would suggest looking for direct routing to your location that does not go through the United States.

  13. Hannah

    Hey,
    I need help. Am from Kenya and I need to send a cargo to USA. Through air or sea. How much should I expect to be charged the minimum charges that can there be for 50kg package.
    Thank you.

  14. Mel

    Hi our freight forwarder just gave me the billing and I am shocked with the amount. I don’t mind paying it knowing that’s what they exactly or thats what I exactly need to pay. My question is are they required to give me official receipts like for the air freight, storage, trucking or even customs? Cab I ask them to give me official receipt before I pay them? Hope you can help me with this. Thank you very much

    1. LILLY + Associates
      LILLY + Associates

      Hello Mel! if your forwarder gave you a quote and now the invoice shows an increase in the prices you may be entitled to ask exactly why the prices have changed so they can provide you with a breakdown report of the costs, otherwise the freight forwarder is not in the obligation of revealing its final client with their operation costs. We hope you find this answer helpful.

    1. LILLY + Associates
      LILLY + Associates

      Hello Mirubiu! We guess you are referring to the cross border charges, Typically this charges are applied only when shipments to or from Canada and Mexico are transported by road.

  15. article

    article Hi all. I discovered your own weblog using yahoo. That may be an extremely well written post. I will be sure to take note of the idea and are available returning to get more information of this useful facts. Thanks for the article. Let me unquestionably recovery.

    1. LILLY + Associates
      LILLY + Associates

      Hi Brian – thanks so much for reaching out! we’d be more than happy to help. I have forwarded your information to our support team so they should be contacting you soon.

  16. Michael

    Can you please explain the situation, I’m confused. I have FOB Shipping terms but my factory asked for “Could you quote FOB fee before booking shipment with your Freight Forwarder?” Does my Freight Forwarder charge my factory or how does that work? I was confused by what they were saying. Thanks!

    1. LILLY + Associates
      LILLY + Associates

      Hello Michael – When purchasing on FOB terms the supplier can make the arrangements themselves to deliver the cargo or they can do it through the client’s freight forwarder. At which time, all FOB charges would be billed back to the supplier. Thank you for reading us!

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