When selling on a basis other than Ex Works (EXW), the cost of freight should always be included in your price quotation. You can do this in two ways:
1. Include the costs of freight in the price of every item - so that the buyer believes there is no extra charge for freight
2. Calculate the exact freight charge of each item and include the total separately on the invoice - this way the buyer sees the lowest possible prices for your products
Calculating costs
Freight costs are normally quoted on a port-to-port basis. When calculating your freight costs consider:- Actual weight or volume weight of your consignment (quoted in cubic metres or tonnes)
- Mode of transport
- Weight of the pallet used to transport your units
- Loading and unloading costs involved in multimode transport
- Port or terminal fees
- Bill of lading (shipping documentation) fees
You may also incur additional charges relating to your terms of trade. These include:
- Cost of moving the goods to and from the port
- Handling the cargo
- Port costs
- Documentation
- Finance
Airfreight
There are yet further charges and constraints to consider if transporting your goods by air. Airfreight costs will vary according to the following factors:- Tariff classification
- Competition in routing
- Space availability
- The forwarder's willingness to share commissions
Cut freight costs
There are a number of ways you can save on your freight costs:- Use a multimode transport agreement - this will include the loading and unloading costs involved when changing modes of transport
- Use a shipping association with others exporters to receive discounts
- Find the lowest rates provided by carriers
- Use the correct (smallest) containers
- Check the minimum charge for freight (e.g. seafreight is usually 0.5-1.5 tonnes and airfreight usually 10-20kg)
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