Fluctuating Ocean Freight Rates and How to Manage Them

Large Container going into ship

The ocean freight rate is the fee payable to a shipping company for getting freight from A to B. It is usually paid in US dollars. If you import or export goods, understanding ocean freight rates is essential as they affect your final shipping costs, and by extension, your profitability..

How are freight rates calculated?

Ocean freight rates are determined by the freight charges set by a carrier (shipping company) and the costs of handling and clearing goods at the ports of loading and discharge.

The freight rate can also be affected by whether the goods require a full container load (FCL) shipment or can be loaded with goods from multiple sellers into the same container – known as a less than container load shipment (LCL).

  • Inland haulage
  • Terminal handling charge
  • Shipping documentation
  • Customs clearance
  • Security
  • Ocean freight base rate
  • Bunker adjustment factor (fuel surcharge)
  • Currency adjustment factor

Employing Flexible Solutions

Although the air optimiser sections and containers were more straightforward in terms of road transport, we needed flexible solutions, such as side loaders, to collect the high volume of containers from site and deliver them to port for their respective deadlines.

Upon arrival at Southampton Port in the UK, the oversize pieces were lifted from the trailers following our predetermined lifting instructions, which included using specific lifting points, set spreader beam widths, sling lengths and tandem lifts.

A Project Manager was on site throughout the process to ensure we were happy with the lifts and could implement changes. Later, this information would be fed back to our team in Melbourne to ensure the processes at both ends were consistent.

An End-to-End Approach

After being lifted, the pieces were lowered directly onto Mafi trailers and secured, ready for loading to the vessel. Project Managers were also in attendance to oversee the loading of the cargo.

Our end-to-end approach allows us to make observations and refine each element of the operation, while providing the customer with direct updates. As each phase was successfully shipped from the UK, concise updates were conveyed throughout the entire supply chain, ensuring our level of service was maintained through to the installation site.

17 vessels later, the project was finally completed, on schedule, on budget and to the satisfaction of our customer and consignee.

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