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What is a Good Freight Rate

What is a good freight rate
? Getting the right deal is based on your point of view and the importance you place on your supply chain. It depends on the nature of your supply chain, what type of service you need and the focus and attention you place on supply chain optimisation. In short, it depends on you.

The saying “you get what you pay for” has never been more relevant than in the current market conditions. The costs and business consequences of something going wrong can far outweigh a minor saving in rates.

We expect freight rates to hold strong during 2018 based on the current trend. We also expect peak season will start earlier with higher import volumes putting pressure on space.  Importers need to be prepared.

Changes amongst shipping lines have had a big impact on the rate shifts we are seeing now. At present demand is high and in some parts of the world supply is scarce for various reasons. If the space stays the same, the pricing will stay strong.

As in other business contexts, relationships matter. Shipping lines will always prioritise the space requirements of long terms clients or regular shippers, especially in peak season when space is tight.  This can mean that those who shop around for rates throughout the year might find it difficult to get bookings at all when space is at a premium.”

If you pay a comparatively premium price, you will most likely get your goods faster, on a more reliable service and experience fewer space issues. In times of need you will experience better service from your close partners than someone you transact with only occasionally.

What is a good freight rate

What is a good freight rate

What is a good freight rate? A good freight rate is one that is competitive, fair, and economically viable for both the shipper (the party sending the goods) and the carrier (the party responsible for transporting the goods). The specific criteria for determining a good freight rate can vary depending on various factors, including the type of cargo, the shipping route, market conditions, and industry standards. Here are some key factors to consider when evaluating whether a freight rate is good:

Competitiveness: A good freight rate should be competitive within the market for the specific type of cargo and route. It should not significantly exceed the rates offered by other carriers for similar services.

Cost-Effectiveness: The rate should offer value for the services provided. It should align with the shipper’s budget and financial objectives, allowing them to maintain profitability.

Reliability and Service Quality: A good rate should reflect the carrier’s ability to provide reliable and high-quality transportation services. Shippers often consider a carrier’s track record for on-time deliveries, cargo safety, and customer service when evaluating rates.

Transparency: Transparency in pricing is essential. Shippers should clearly understand what is included in the rate, such as handling fees, fuel surcharges, and any additional charges. Hidden fees can negatively impact the perceived value of a rate.

Flexibility: A good freight rate should be flexible enough to accommodate the shipper’s specific needs. For example, it should allow for various shipping volumes, packaging requirements, and delivery schedules.

Market Conditions: Freight rates are influenced by supply and demand in the transportation market. Shippers and carriers should be aware of current market conditions and adjust their expectations accordingly. Rates can fluctuate based on factors like seasonal demand, fuel prices, and economic conditions.

Negotiation: Shippers and carriers often engage in rate negotiations. A good rate is one that both parties find mutually acceptable through negotiation. Effective communication and a willingness to compromise can lead to favorable rate agreements.

Long-Term Relationships: Building long-term relationships with carriers can lead to more favorable rates over time. Consistent and reliable business can result in discounts and other benefits.

Legal and Regulatory Compliance: Ensure that the freight rate complies with all applicable laws and regulations, including those related to tariffs, customs, and transportation safety.

Total Cost of Ownership: Consider the total cost of ownership, which includes not only the freight rate but also factors like insurance, customs duties, storage fees, and potential delays.

What is a good freight rate? As a China freight forwarder, Basenton Logistics provide professional one stop logistics services, If you have any problems, please do not hesitate to contact us.

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