5 strategies to get the best sea freight quote and carrier
Sea Freight Quotations – I hear some freight estimators across the globe let out a collective sigh of exasperation when this topic is mentioned..
Is the importance of complexities of a sea freight quotation exaggerated..??
Sea freight quotation and negotiation could be easy as pie or it could be a highly complex process.. Why is it so..??
Say you are a freight forwarder and your client is asking you for a simple rate based on a Port to Port movement – say from Seattle to Hong Kong.. Both are major ports on the Trans Pacific route so it should be simple enough to find out the shipping lines operating between these two ports.. Easy as pie..
On the other hand imagine your same client requests for rate from ICD Delhi in India to Kitwe in Zambia for Out of Gauge cargo, say a Transformer.. It becomes a highly complex quote because
- The Place of Receipt and Place of Delivery both are inland locations
- Not all carriers offer this option so you may need to hunt a bit more
- The Place of Delivery spans a couple of countries between Port of Discharge and Place of Delivery – in this case POD would be Durban and the cargo will have to move by road inland from Durban, cross over Zimbabwe (another country) and then cross over to Zambia
This means that if you are issuing a through bill of lading from POL to POD, your freight quote should include border clearances, customs clearance, route clearances, out of gauge permits etc etc..
So what is the best strategy to get the best sea freight quote and Carrier..??
Here are 5 strategies that you can adopt..
- Whichever the route, always select the quickest routing (lesser transhipment ports) and transit time as that is one of the main items that your customer would be looking for and as their agent, expect you to take care of (unless otherwise they require a longer transit)..While getting the best possible freight rate is important, I am yet to come across many customers that would compromise getting their cargo to the destination on time and in good condition in favour of cheaper rates..
- Check and ensure that the freight rate that you receive from the carrier and the quote to your client is comprehensive and has all the required charges as per the terms of contract – Door to Door, Port to Port etc and covers all areas..Although every client may have a preferred Carrier that they would like to use, it is prudent to shop around with a couple of carriers in order to ascertain that you are being given the best rate by your preferred carrier..
- But for your own benefit do remember Shopping around ≠ Horse-trading.. There is a big difference between the two and if you start Horse-trading then better be ready to face the consequences such as shipping lines going out of business and taking your cargo with it..
- Be open and upfront with the carriers that you use and describe the full scope of services to them so that they can be upfront with you and advise all the applicable charges so there are no surprises later to you, your shipper or their consignee..
- Another incentive you can offer the carrier in exchange for the best rate is to sign something like a volume based service contract whereby you commit a certain volume within a fixed period of time to the carrier who in turn will be able to give you a better rate compared to your competition..
Depending on the country, destination, cargo, type of container, volume etc, there are several other strategies that you can follow in order to secure the best ocean freight rate from the best suited carrier, but above are the 5 key strategies that will eventually pay off for you..
very nice sea freight quote strategies
Thanks for share your knowledge
It’s quite informative Content. The strategies that need to be followed and what should be kept in mind is the weight and the distance that needs to be covered. Thanks for sharing.
Hai, i am asking all of u
please give me the answer , before giving a sea freight quotation what are the factors we need to calculate means insurnce charge , trpt charge etc …… what are the remaining charges we need to calculate
Dear Sir, I don’t see any help for getting logistics quite on this site
Hi Suresh, do you mean Logistics Quote..?? If so, this is not a commercial site, its an educational one.. You need to speak with a logistics service provider for same..
can u give me the hints before giving a quotation ? beacuse i am going to fin out a job in that field
Thanks for sharing the valuable information
Some great strategies there, thanks for posting!
Hi Hariesh , since reading this blog i thought this is another blah sharing knowledge. But, your blogs really says that you do know what you’re talking and not just a mere recycle knowledge from other contents.
I’ve been reading this blog to help our company find best deals for our crane shipping’s. Our latest shipping in general, the transportation from China to Chittagong port, Bangladesh is ocean transportation, it will be through Containers, or go bulk cargo. Rates vary according to the qty of the products, and the volume and the weight.
We’ve been in the crane industry business for 3 decades, and finding the best rates doesn’t entirely mean cheaper. It goes with the quality of handling your shipments.
I’m an electronics engineer and I would gladly help thru guest posting in this website about my knowledge in logistics.
Thanks for the offer Shenalyn.. Appreciate it.. 🙂
Choosing between air and sea shipments can also be a matter of taste, rather than price. Some perishable items are said to have a different taste if they are shipped by sea than by air. (We’ll let you be the judge of that one!)
Freight rates are indeed a contentious issue .
I am going to close up my strategy re OOG Transformer from ICD Delhi to Kitwe Zambia …TRIAL SHIPMENT
My focus was on the cargo 10 GWT / 24 CBM each and looked at future business prospects . If Client is successful in his endeavours and having already established friendly contact I may be offered some opportunity of being part of the service delivery but I must work towards that goal.
Working on a success model for the shipment of 500 units 5000 GWT / 12000 CBM …now we’re shipping. I had written to Client explaining why I could not quote on the single unit shipment and because of my being honest up front hopefully same will be appreciated and will be invited to participate in the tender for the big shipment.
No doubt it will be very competitive but I will go for the break bulk option of shipping and duly present a biz plan to Client. Pricing the shipment would be next . Client liaison is tantamount to success in securing bizness so without totally being in Client’s face will monitor the impending shipment and kindly request updates as delays will affect the pricing.
Easier said than done . Of course .
When you table your MPV Breakbulk / Projects report we will participate
I have crammed this rate enquiry and left out a lot of info / data intentionally .This is an educational blog and part of it is to provide food for thought. You have reached an appreciating lot of people which is very impressive.
The key points are focus on the idea of business development / upfront and honest communication and the way forward is to discuss with and learn from work colleagues / others in the industry . Ask questions on missing links and WORK.
Dear Hariesh and everybody,
I am very glad that I found this excellent blog and subscribed to it.
I am totally new to this so I would like to benefit from your experience.
I need to ship to Amman, Jordan. Transit time is higher if I go via Aqaba but it’s a straightforward shipment; on the other hand, if I ship via Haifa or Ashdod in Israel and then road haulage to Amman transit time is significantly lower but I need to go through a lot of red tape: Customs in Israel and customs in Israeli – Jordan border; additionally, I will also need to empty the containers in the border and reload shipment to a jordanian truck. As you can guess, things are more complicated with perishables.
Glad you found the site useful Mario.. 🙂
Dear Mr Hariesh
first of all , we thank you for all Ur effort in post to us Ur article with easy way . always u present anew interesting knowledge for us
thank u again , u know when you post the article with title ( what u like to want me to write ) , i thought that u finished ur articles or there is no update for in formations but now my thought is wrong , u always have anew informations , really i knew more informations during reading ur blog , my work not help me as Ur blog
my opinion in freight rates
really i am disappointed from many factories because there is high competition although the volume of trading is low , also when we negotiation with shipping line to get freight rate and quota the client with it plus our profit , maybe client ask the shipping line with the freight rate cost , the line quota the client with the original rate , really i dont know why the world economic is bad , and the international trading is down , most of lines achieve loss , maybe the conflicts in the middle east or the developed country give loan to the poor countries but the poor countries cant pay the settlement ,
i listen before the European country want to legislative that the shipper direct to freight forwarder not line inst right ?
most of case the best rates related to volume
Dear Hassan, thanks for your comments and your continued interaction on the site.. Don’t worry, am not about to stop writing anytime soon.. 🙂
My comments re having met Client are hypothetically speaking . A rate enquiry has been created and we’re going through processes
I should have mentioned that we must also educate Client/s of the need to table all relevant and required info for a proper and correct rate quotation and problem free shipment.
Full W / M incl dimensions L x W x H are a necessity for the Transformer as is cargo description and W for the containerised cargo. Gen / non has n/a must be specific.
There are always terms & conditions (prior to cargo acceptance)
The question here is what other strategies do you follow ? (in addition to what has been tabled and important notes by CAR and ASL)
The first will be to add value to the shipment that will benefit The Client , The Cargo and of course you yourself / the Company you represent and in what capacity.
Let us expand the SH / AG / FF / ANO role . Who else is out there in the competition ? Is the Client an Agent or the Owner ? What is the relationship to the Cargo and Who is the decision maker to secure business and get a firm booking ? ANO may include you yourself operating a small business / The Broker .
I have done my homework as a SBO and must use that info to what we set out for at first.
I have found that the chances of securing this biz is at best zero so I must be honest about it and communicate it to Client in the best way possible that will leave an impression on Client so I will be remembered and included in THEIR future cargo enquiries / shipments. Ditto major Shipping Lines and other Business Operators.
If possible visit the Client personally (after making an appointment) or send an email . Advise Client that you as a SBO are unable to table a competitive rate quotation for the package service delivery required as you cannot compete with them in either matching or beating rates on offer . Table some details of reliable competition (without too much info as you do not work for the competition) Point the direction to Client (without leading them there) . That will be for their own / direct Agents.
I told you I have done my homework and I have communicated with and met Client and have some interesting info / details . HOW ??? I will tell you later but first you must do your homework
Follow the 7 P principle NOT the 3P
I shall as best as I can
Good day Hariesh
I have thoroughly enjoyed your blog and although I have always recommended it to anybody even remotely connected with the shipping industry selffishly I have learned and always gained from it even in retirement.
With your permission I would like to table comments from the knowledge and experience I have gained looking at topics as I see them within the set contexts of education as your blog dictates but perhaps with commercial awareness as well .
Hi Clive, please feel free to do so.. Your experience and knowledge sharing will be a huge boost for this site.. Thank you.. 🙂
One strategy that has worked well for me is developing relationships with key people in the shipping lines. The day-to-day stuff it is handled by the ‘front desk’ but the unusual or challenging events we take up with our account manager (even if your volumes are small but you are a regular shipper, it behooves you to ask the line for an account rep/mgr). When that manager is promoted to another position, stay in touch because when the ‘bigger’ problem shows up, you’ll have a higher up resource to tap from. And, believe me, if you are a regular shipper, the ‘bigger’ problem will show up eventually.
Great advise Carlos..:)
Hi Hariesh Good points and advice . Thank you for your blogs they are informative . Rani Pachai
Spot on piece!!! Thanks Hariesh…
Glad you like it Michael.. Do you have any tips you would like to share..??
Very good subject.I like this site.
Thank you Bito..
I must admit this article was not what I was expecting; wise words indeed, but sadly only followed by a few. Too often, especially on spot business, it becomes a horse trading scenario and many forwarders would sell their grannies to save $25. Experience says that generally importers are more concerned with transit times than exporters because they are on the receiving end and waiting for their goods.