Freight Quotes: How to Interpret and Compare Them

Freight Quotes: How to Interpret and Compare Them

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Freight quotes from different companies may be as different in format and content as chalk and cheese. It is normal for the new South African importer / exporter to get freight quotes from a number of companies and compare them.

Related: 4 Ways to Source Quality Products for Imports

When doing so it is important to ensure that the freight quotes include all applicable costs. So how do you know that you are comparing apples with apples?

Origin Charges

These are the costs that occur in the country of the seller in order to get the cargo from the factory to the international transporter.

Origin charges are dependent on the incoterm stated in the quote. The incoterm ex works includes all costs from the factory until the cargo is loaded on the transport vessel, FCA may only include loading and/or security costs and FOB may not include any costs.

International Transport Charges

This is the cost of the plane, ship, truck or train that will be transporting your cargo between countries. These costs are normally similar, however some freight companies may negotiate better rates with the international transporters than others and some freight companies may add a small mark-up.

One way to lower these costs for containerised cargo is to ensure clever packing of your container. This short video explains how.

Destination Landside Charges

These are all the costs to collect the cargo from the transport vessel and deliver it to the buyer. It may include offloading fees, handover fees, degrouping fees for LCL cargo and storage or inspection fees. These costs are also dependent on the incoterm used, however it is common for the buyer to pay for these costs.

Customs Duty and VAT

For dutiable goods this is often the largest portion of a freight quote. This total is paid directly over to customs and the total should be identical on all freight quotes. If the total is not identical ensure that the freight companies quoting you used the same tariff code for your cargo.

Freight Agent Charges

This is the service fee that a freight company charges. On a freight quote these service fees may be included as an agency fee, a documentation fee, a communication fee, clearing and release fee or a customs documentation fee.

Related: 5 Simple Steps to Importing into South Africa for Small Business Owners

In addition to freight agent service fees the freight company may add a small mark-up to some of the transport charges mentioned above.

Additional Costs

Other fees to look out for may be insurance, packing materials or pre-shipment inspection costs. Also check that the freight quotes use the same exchange rate as this could make a significant difference to international costs that are often quoted in dollars.

By going through the above checklist you can be confident that you have all your bases covered and will not be caught by any surprise additional costs before your cargo is delivered.

Although cost is just one factor to look at when selecting a freight company, you can now accurately compare freight quotes to assist you in making an educated decision when making your choice.

Tracy Venter
Tracy Venter started Trade Logistics after being frustrated by the difficulty of trying to find accurate, up-to-date information on how to import and export goods. Trade Logistics, is an online platform offering all the information, basic services and personal assistance needed to start or grow an international trade business. Having strategic partnerships with established experts in the industry including an internationally recognised training provider gives Trade Logistics the edge to be able to serve both emerging businesses and large multi-national companies.
  • Ken Klaver

    For the so called one-off or #spot #shipments an online booking tool is a perfect alternative to a phone call or e-mail as it allows you to capture crucial shipment data in a structured way instead of having to look for data once the invoice comes in. https://www.controlpay.com/services/shipment-booking

  • Ken Klaver

    For the so called one-off or #spot #shipments an online booking tool is a perfect alternative to a phone call or e-mail as it allows you to capture crucial shipment data in a structured way instead of having to look for data once the invoice comes in. https://www.controlpay.com/services/shipment-booking