Overweight Charges
Overweight charges frequently arise in international shipping and can cause frustration for shippers. These charges can accumulate rapidly and are often preventable through thoughtful planning. This article will examine overweight charges, their calculation, and offer tips for avoiding them.
What are overweight charges?
Overweight charges occur when a shipment surpasses the maximum weight limit for a specific shipping method. These charges can fluctuate based on the carrier, typically falling between $50 to $100 per additional pound exceeding the limit.
How are overweight charges calculated?
Overweight charges in transit are determined by multiplying the weight of the shipment by the overweight rate. This rate is usually a percentage of the base shipping charge and may vary depending on the carrier and destination.
What is the reason for the high freight rate?
Several crucial factors contribute to the persistently high import shipping rates, with carriers playing a prominent role. One key factor is carriers charging higher rates per unit of weight. Additionally, their standard operating procedure (SOP) involves prioritizing low-volume shipments to economize on fuel and operating expenses. These combined elements have led to the lack of significant rate reductions in recent months.
Carriers are charging more per weight
In recent years, freight carriers have been progressively charging higher rates per unit of weight for their services, posing challenges for businesses relying on these carriers for shipping goods. There are several factors contributing to this increase in rates.
One factor is the significant rise in fuel costs, leading to increased operating expenses for freight carriers, which they have passed on to customers in the form of higher rates.
Furthermore, freight carriers are facing intensified competition from alternative transportation modes, such as rail and trucking. This competition has resulted in lower rates for these services, prompting freight carriers to raise their rates to remain competitive.
The adoption of technology has also impacted freight carriers’ rates. With improved tracking capabilities and faster service, carriers have experienced higher demand for their services, resulting in elevated rates.
Despite the reasons behind the rate increase, businesses are grappling with higher shipping costs. This, in turn, may lead to increased prices for goods and services shipped by freight carriers. It’s crucial for businesses to be aware of the potential impact of these higher rates when budgeting for their shipping needs.
Carriers prioritize low volume/light shipments
Carriers started prioritizing low volume/light shipments to cut costs, leading to higher charges for these types of shipments but fewer trips with their boats and planes.
As a result, carriers earned the same amount of money while reducing boat movement and fuel expenses. This trend has persisted and is evident in the pricing structures of many carriers today.
Who is affected by high freight rates?
High shipping freight rates can have a considerable impact on both businesses and consumers. For businesses, the costliness of transporting goods can hamper their ability to compete effectively. On the consumer side, higher freight rates may result in elevated prices for imported products. In certain situations, these high rates can even lead to shortages of essential goods.
When will shipping prices go down?
There is no definitive answer to this question as shipping prices are influenced by various factors, including global demand and fuel costs. Nonetheless, some experts speculate that shipping prices might decrease in the coming years as the global economy rebounds.
Furthermore, the implementation of new technologies and initiatives, such as the advancement of electric vehicles, holds the potential to contribute to long-term reductions in shipping costs.
How to address competitive freight rates
There are several approaches to tackle competitive freight rates. One method is to directly negotiate with the carrier. This involves requesting a quote from the carrier and engaging in negotiations based on that initial quote.
Another effective way is to utilize the services of a third-party logistics provider (3PL). 3PLs can leverage their expertise and volume discounts to secure the best rates on your behalf through skillful negotiation.
Additionally, technology can be utilized to find optimal rates. Various freight rate comparison tools are available, enabling you to identify the most favorable rates for your shipments. You can also try requesting a quote on our website to discover the best prices for your shipping needs.
