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