Whether importing or exporting goods, or looking to arrange haulage for a domestic delivery, you want to be assured that you are receiving the best service at a competitive rate.
You also want to be sure that the quote you are receiving for the transportation of your goods is accurate from the outset. Doing so avoids any unexpected charges being added to your transportation costs due to important details having been omitted at the initial quotation stage. It also enables you to set your own charges to your customers at a level that ensures you are able to maintain a profitable business.
In this blog, we look at 7 key areas for which precise information is required in order to receive an accurate quotation:
Origin and destination
It may seem obvious, but be sure to provide exact collection and delivery addresses. If collection is required to transport your goods to a loading warehouse or port, your freight service provider will need to account for domestic haulage charges. Similarly, if delivery to door is required at the destination country, this needs to be accounted for in the quotation.
Shipment date
The volatility of rates for shipping, particularly air and ocean freight consignments, makes it difficult to pre-empt transportation charges. As such, you should not use previous quotes to estimate costs.
As demand increases, rates can dramatically increase too. Such fluctuations are especially noticeable around peak seasons such as Christmas and, for Asia shipments, Chinese New Year when everyone is scrambling to get their shipments away. Not so predictable are the times when carriers reduce sailings, or other effects such as major strikes and long periods of bad weather that could delay shipments, equalling an unprecedented demand and thus, equating to a hike in charges.
The validity of any quotation varies, but generally speaking, will be valid for a maximum of one month. Bear in mind that, if you decide to undertake a shipment after the quotation validity has expired, costs could differentiate somewhat.
Service required
How time critical is your shipment, and how large are the goods to be shipped? These are the two key questions that you should be asking yourself when deciding on what service you require.
For international shipments, you may wish to use air freight to transport urgent, smaller items. For larger, non-urgent items, it will be cheaper via sea.
Another option is to investigate the potential of rail freight. With recent investments, the Trans-Asian railway is developing as a viable alternative to air and sea, with rail being a faster option to sea and a cheaper option to air.
As well as advising of the transportation mode that you want to be quoted on, it’s important to consider whether you have any specialist requirements for your shipment. For example, whether you require a refrigerated container (reefer) for temperature sensitive food or pharma cargo, or if you require a low loader for your European or domestic haulage due to working with heavy, oversized shipments.
You will also need to advise if you require timed deliveries, or a timed specific collection.
Finally, will you need to consider and advise if you require any supplementary services such as Customs or insurance.
Weight / size of shipment
The provision of an accurate weight and size for your shipment is of paramount importance in calculating a cost for the transportation of your goods.
Maximum capacities apply for containers, lorries and planes, and are worked out based on weight (kilograms) and size (cubic metres). The information that you provide in order to receive a quotation will be used to work out if the chosen transport mode is suitable for your requirements, and will enable your freight service provider to advise if your goods need to be shipped as full load, or can be shipped as part load in a consolidated container, which can work out significantly cheaper if you have only a small shipment.
Product description
A precise description of the goods to be transported is necessary to assess whether the type of product you are shipping could affect the services required. For example, if your goods are perishables, will a reefer need to be accounted for within the quotation?
Provision of any applicable Commodity codes is also required. These codes, used for the classification of goods, establish details of any taxes or duties that will be payable to local Customs authorities. They also enable your freight service provider to ensure that the correct paperwork is in place, to avoid unwarranted delays, and as such, the incursion ofadditional costs.
Hazardous and dangerous goods
If your products are classified as dangerous goods, it’s imperative to let your freight service provider know as consignments of dangerous goods will affect freight rates and services. Whilst they will be able to find a carrier capable of offering a competitive quotation, additional documentation and more stringent shipping requirements apply for hazardous and dangerous goods shipments, and businesses involved in the transportation of such goods require extensive training and specific qualifications.
Incoterms
“Incoterms” are a set of pre-defined trade codes compiled by the International Chamber of Commerce (ICC). Although there are no legal obligations to use incoterms as a basis for sales contracts, doing so clearly establishes the ‘point of delivery’ within a contract, helping avoid any confusion or misunderstanding in regards to both buyer and seller financial and operational responsibilities. Advising of the incoterm that you have agreed to trade under enables the submission of a quotation that accounts for all the costs associated with the given incoterm.
Issuing your freight service provider with the details outlined in each of these key areas will enable them to draw you up a more precise quotation. Although there is still the potential that you may incur some additional charges outside of their control, such as demurrage costs when free time at port is exceeded for whatever reason, providing correct information from the outset avoids any additional excessive charges.
When in possession of your quotation, and evaluating options, remember, cheaper isn’t always better. If the charges that you have been quoted seem too good to be true, they probably are. If you’re provided with a really cheap quotation, can you guarantee that you will be receiving the same high level of service you would receive from other providers?
Asides from price, there are a number of other key considerations that you should be making when evaluating your options. For example, what connections does the freight service provider have? Are they members of freight networks, and do they have sufficient networks overseas to handle your worldwide shipments? Appointing a UK freight forwarder that is a BIFA or IATA member or holds an AEO accreditation provides assurance that they will offer best practice and quality in the delivery of freight and logistics operations.
It’s also worth considering whether your chosen provider is able to offer additional services to compliment your transportation requirements. The ability to provide a ‘one stop shop’ for all of your supply chain needs offers you complete visibility in every step of the supply chain process so it’s worth looking for a company who can offer these additional services such as an in-house Customs Compliance team or fulfilment capabilities.
If you would like a competitive quotation for any forthcoming shipments, please get in touch.