How to move goods by sea

Costs of ocean shipping


There are two main elements to the cost of transporting goods by sea - the ocean freight charged by the carrier, and costs associated with handling and clearing the goods at the ports of loading and discharge.

A number of factors can influence how these charges are calculated:

  • for liner traffic, freight is usually charged according to the shipping company's standard tariff, although larger or frequent shippers and freight forwarders may be able to negotiate preferential shipping rates
  • charter rates for other vessels depend on supply and demand conditions prevailing at the time when the charter is negotiated

However, there are many other factors that can impact on the final price, including:

  • different rates for specific goods and general cargo
  • congestion charges at busy ports
  • currency adjustment factor, to take account of exchange rate changes during the journey - shipping costs are usually calculated and quoted in US dollars
  • bunker adjustment factor, to take account of fuel price fluctuation
  • surcharges (like a security surcharge) levied by ports and/or by the shipping company to cover the costs of particular regulatory regimes

Another factor that affects the cost of shipping containerised cargo is whether or not you have a full container load to transport. Shipping companies' tariffs are based on flat per-container rates, so it is clearly most economical to ship your goods in containers that are full. If you have a less-than-container-load consignment, it may be worth consolidating your cargo with that of other traders, so you'll only pay for the weight or volume (whichever is greater) of your own goods.

Working out the most cost-effective way to ship your goods around the world can be a complicated task. As with most services, you can research the options yourself or pay a third party (such as a freight forwarder) to handle these issues for you, finding transport modes and routes that suit your needs - see using brokers and forwarders.