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Selasa, 02 Maret 2010

Planning and preparation 8 - Calculate your freight costs

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


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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