Understanding Different Shipping Costs and Surcharges

Posted on: 19 January 2016

Transport and freight charges used in determining quotes can prove to be a puzzle. You may find that you end up paying twice what you expected simply because you did not understand the costs. For you to compare quotes from different shipping and transport companies, you need to understand the surcharges and situations when additional costs may arise. Below are some of the common shipping rates.

All in rate: This means that the given quote or cost is inclusive of all the extra costs . This rate includes all additional fees and related costs under the currency adjustment factor and bunker adjustment factor.

Basic Service Rate Additional (BSRA): This is a charge applied by shipping companies towards cargo imports. This rate is inclusive of port charges, storage fees, sorting fees, loading fees and collection of cargo for delivery.

Bunker Adjustment Factor: This is usually an adjustment fee to the shipping charges so as to cater for fluctuations arising as a result of fuel oil (bunkers) for ships.

Currency Adjustment Factor (CAF): This is another cost adjustment to the freight rates so as to factor in currency exchange rate fluctuations.

Heavy Weight Charge: This surcharge applies to cargo exceeding a particular weight. Containers in transit exceeding 21.5 tonnes are subject to a heavy surcharge.

Port Congestion Surcharge: This charge is applied to cover for idle time and congestion for vessels serving a particular port. Port congestion is often as a result of labor disputes. Shipping lines have the right to levy a fee to cover for the revenue lost.

Winter Surcharge: This surcharge is imposed on all containers to help meet the extra costs incurred during ice conditions, harsh weather and convoy restrictions. This charge can only be levied during winter.

Additional Terms and Fees

Storage: A storage fee can be charged for excess storage of goods at the port. This fee begins to take effect from when the goods are unloaded until the point of export. These costs are charged at the port. Usually they are quoted as (TEU). The longer the carrier remains in the port, the higher the storage rate.

Inspection: Inspection charges include the work required to offload the container on the ground for customs, and health clearance. This cost is levied at the port rate. There are certain shipping companies that will charge for weighing, labeling, repacking and sealing of items.

These surcharges and additional costs are general, but every company will have its own policy when it comes to additional costs. If you have any questions, consider contacting a local transport company for more information.