For any manufacturing business, the cost of transporting raw materials, components, and finished goods to and from various destinations around the globe can be significant. Understandably, these businesses will want to optimize their logistics for speed, reliability, and cost. By understanding the dynamics of the supply chain and the need for visibility, they will be able to reduce the overall cost and become more competitive. Some highly-effective tips on reducing the cost of ocean freight:

Know the Market to Decide On the Best Shipping Option

When you don’t plan, you will be caught flatfooted and have to classify every shipment as urgent and pay through your nose to meet the delivery deadline. Rather, by scanning the market and understanding the trends, you can find the best options for transporting your cargo reliably, safely, and economically. If you anticipate a general rate increase, you can discuss it with your logistics partner on how to reduce its impact. Also, if you are planning to meet holiday demand, then you should start booking your cargo to avoid getting caught up in the rush. By being keenly aware of the market, you can manage your production schedule and plan your shipping to take advantage of low shipping container prices.

Maximize the Container Load

The more goods you can load in a sea container, the lesser is the cost of transport for each unit. The ocean carriers charge for transporting containers from one place to another and do not care if they are fully or partially loaded. If you have enough cargo, it will make more sense if you hire a 40-foot container instead of a 20-foot one as the difference in the cost is marginal. A 40HQ container that is extra tall represents the best value as its capacity is 76.2 m3, according to How to Export Import. It is significantly more compared to 66m3 of a standard 40-foot container. The capacity of a 20-foot container capacity is only 27m3.

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Buy FOB Instead of CIF

Although it may seem convenient to buy CIF because it is the supplier’s responsibility to arrange the freight and the insurance, it is typically more expensive than FOB as the freight forwarder appointed by the seller builds in its own profit into the quote. By buying FOB, you relieve the supplier of this responsibility and can take charge of it to get better rates.

Ship FCL instead of LCL

LCL shipping is practical when the cargo for shipping is not enough for a full container load. Even though LCL works out cheaper than taking on a full container and shipping it half-empty, there are additional costs on account of cargo splitting and consolidation at the container freight station. A more economical way of transporting is to accumulate your cargo to a point where you can use the entire container.

Conclusion 

As is evident, ocean freight transportation has multiple dimensions requiring a fair amount of understanding of the various factors that can influence the outcome. With intelligent route planning and using the right mix of sea, road, and rail transport, you can ensure that your cargo reaches safely, on time, and at the least possible cost.