June 23, 2022

Freight Forwarding Cost Structures and How Tech Keeps Them Balanced

Miles Varghese
Miles Varghese
Helping independent freight forwarders/brokers better stay in-sync, collaborate, and improve operations with their shippers/clients. Co-founder & CEO @ Cargologik.com
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Ocean freight forwarders offer an invaluable service for shipping companies and transportation providers. However, keeping up with the various freight forwarder costs and fees can become a bit of a challenge, especially for smaller companies and businesses. Like most things related to freight shipping and transportation, freight forwarding charges fluctuate, sometimes quite regularly and drastically. In addition, the rising popularity of e-commerce makes the need for reliable freight forwarding services all the more tangible. This ever-growing mountain of pressure to make shipments fast, affordable, and reliable makes a reasonably straightforward question like how much a freight forwarder costs much harder to answer.

Fundamental Influences of Freight Forwarder Fees

There are, of course, concerns about how much freight forwarders charge and how shipping companies can manage their freight forwarder cost output. Therefore, it is essential to understand what impacts freight forwarder prices at any given time is vital.

The five main factors that influence cost are:

  • mode of transport – air transport will cost more than road or ocean freight shipping
  • distance/destination – the farther goods go, the higher the fuel, and the higher the costs
  • weight and volume – charges often are based on how much the cargo weight or its size
  • value – sometimes the value of the goods impacts how much risk and cost are involved 
  • the type of contract- short or long-term agreements with forwarders can impact costs too

Understanding the influencing factors can help shippers and freight forwarders better plan for the rise and fall of ocean freight forwarding charges.

Additional Freight Forwarder Costs and Charges

Loads that require special freight handling and forwarding considerations during shipping will usually incur different freight forwarder costs. This covers specialized products and goods such as:

  • Dangerous, harmful, or hazardous goods- gases, corrosives, and flammable material
  • Perishable goods and live animals- fresh and frozen foods and living  livestock
  • Oversize and overweight goods- items that don’t fit in standard containers or trucks
  • Other specialized loads- things that need special cranes, machines, or packaging to ship

How much a freight forwarder costs for ocean freight transportation depends on what you are shipping, where it is going, and what is required to get it from Point A to Point B safely. It is important to remember that costs depend on the forwarder and contract arrangements. Freight forwarders and carriers sometimes pay additional fees for handling these products.

Freight Forwarding Charges in 2022

Freight forwarding services have not escaped the COVID pandemic’s impact on the industry. In 2022 and by all indications, freight forwarder costs will likely continue to rise and remain volatile in the years to come. According to National Review, fluctuating freight forward prices today have led to a staggering 64% of importers reporting that they have experienced price increases. The review highlighted changes with ocean cargo and related freight forwarding charges,  showing that “pre-pandemic, ocean shipping costs per unit for smaller items ranging from $0.30 to $0.40, or about half a percent of the sticker price… But elevated freight rates have pushed costs to $4-5 per unit” Freight forwarder costs will continue to rise and fall in response to market trends and consumer habits, which only intensifies the need for technology that helps freight forwarders manage loads and shipments.

Using Technology Helps Freight Management Parties Keep Costs in Check to Maximize Profitability

Keeping up with it all is the challenge facing shipping companies and transportation service providers who rely on the current ocean cargo freight forwarder price range to manage global freight visibility and innovation within the market today. It can be challenging to untangle the factors that impact freight forwarder cost and freight forwarder fees, especially in markets that already struggle with instability and volatility. However, working with industry experts and finding the right ocean freight transportation partner can help shippers and freight forwarding companies come together effectively. Contact Cargologik today to learn more about how much freight forwarders charge and how the right tools and insight can make this balancing act easier and less stressful. 

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