Requesting a Freight Quote? Here's What You Should Know

Eli DolganskyFreight Forwarding, Shipping Guide2 Comments

Ocean shipping port

Getting a proper and affordable freight quote is an important step when you’re shipping goods internationally. Every business works on a budget and to remain profitable, you have to keep your shipping costs as low as possible. To get an accurate, all-inclusive quote, you’ll need to give as much information as you can to your freight forwarder.

Desired Service Type

The first decision you’ll need to make is the type of transportation your shipment requires. Ocean, air, and truck (for domestic transport) all have their own advantages and disadvantages. For example, air is the fastest form of transportation, but usually the most expensive, followed by ocean, and then truck.

Incoterms or Mode of Shipment

The International Commercial Terms (Incoterms) rules are a set of pre-defined commercial terms that are published by the International Chamber of commerce (ICC). These rules are are used widely in international procurement or commercial transactions. They clearly communicate risks, costs, and tasks that are associated with the delivery and transportation of goods.

For example, the code EXW (Ex Works (named place of delivery) means that the seller makes the freight available at their premises, or at another agreed upon location. The buyer incurs the risks for bringing the goods to their final destination. This puts minimal obligation on the seller and maximum on the buyer.

Some more familiar terms would be FOB (Free On Board), Cost and Freight (CFR), and Cost Insurance and Freight (CIF).

Delivery Options

You have a few different options when choosing how your freight is delivered. The option you choose depends on your budget, inland logistic network, and business preferences.

Door-to-Door This is the most convenient way of shipping for the customer and the most common option. In this method, the customer is not involved with the sea freight container shipment. The shipper handles everything.

Port-to-Port The shipper handles the shipment from the port of origin to the port at the destination. You can save money with this type of delivery and  you’re free to interact with this shipment at any time.

Port-to-Door This method is a good form of delivery for customers who have their own logistic networks, and can move shipments from their warehouses to the port of origin.

Live Load vs Drop and Pick

There are two different methods for loading your ocean container.

Live load During a live load, an oceanfreight container is loaded at your location. The trucker waits during this process and removes the container as soon as it is loaded.

Drop and Pick With a drop and pick, the driver delivers a container to your location and leaves while while the loading process is taking place (best for loads that will take a few days), then the loaded trailer is picked up.

Commercial vs ResidentiaOn some occasions, a surcharge is added to your quote when shipping to a residence. This is an important detail that should always be discussed with your freight forwarder.

Cargo Details

Certain aspects of your cargo can change the amount that you are quoted. There are several factors that you should consider about your freight. You may be able to get a lower quote by packaging your freight differently.

Dimensions The dimensions of your freight can affect your overall rate quote. Containers usually come in 40 ft. and 20 ft. sizes. The larger your cargo dimensions, the more container space you will need, increasing overall price.

Weight Due to the amendment of the Safety of Life at Sea (SOLAS) convention by the International Maritime Organization (IMO), all ocean freight containers are prohibited from loading unless the shipper has given the carrier a verified gross mass (VGM) of the container that is signed or written on the bill. If your supplier cannot verify the weight, a weight verification charge will be added.

Hazardous or dangerous goods If you’re shipping hazardous cargo, you’ll need a Material Safety Data Sheet to prevent any issues while the container is being loaded. An MSDS provides extensive data about all aspects of the cargo such as the nature of toxicity, its chemical and physical properties, methods of storage and disposal, and more.

Are your goods palletized? Choosing the correct pallet for your goods will maximize the space that you have in your container and reduce your transportation costs.

Are your goods stackable? Stackable goods allow you to maximize the space in your container which can reduce your shipping costs.

Cargo Ready Date

A freight quote is only available for a predetermined amount of time, and is not indefinite. A quote will change if your cargo is not ready within the quoting period. If it’s not ready until months from now, an estimated cost will be given instead of a proposal.

Duty Rate

A duy is a tax that the government imposes on shipments and they are most often determined by calculating a percentage of the value of the commodity.

HTS number An HTS number, or Harmonized Tariff Schedule, is a 10 digit number used to identify the origin and composition of goods, including their duty information.

If an HTS number is not known, a commodity description can be given. This information will then allow a customs broker to find the appropriate code.

Value of your goods Freight value will have an affect on your overall price. Typically, the more expensive your goods are, the more they will cost to ship.

Insurance

If you decide not to insure your goods, the goods are covered under the standard of legal liability to the transportation industry. For domestic shipments, coverage is equivalent to $.50/lb. for partial loss or damage, only the missing or damaged freight is subject to a $.50/lb claim settlement. For international shipments, it is $20/kg. It’s very important that you get the proper amount of insurance so that you’re covered for the full value of your cargo.

Special Services

Does your freight require any other special services? There are several services that will result in extra fees being levied, including warehousing, consolidation, and inspections.

As you can see, there are many factors that can affect a quote. The best thing you can do is give as much information as possible to your freight forwarder so that you can get the most accurate, affordable quote possible. Inflated rate quotes can add up when you’re shipping at high volumes. Keeping transportation costs low is an important factor in improving your bottom line.

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.

2 Comments on “Requesting a Freight Quote? Here's What You Should Know”

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    Tyler Meredith

    It’s interesting that the type of freight can vary the quote greatly. It makes sense that an oversize load could be much more expensive than a standard cargo trailer, even if it’s a shorter distance. It’s something to remember when looking to have things shipped because making sure the company is experienced with the type of load would be helpful.

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