Understanding the actual cost of freight is a vital consideration when shipping internationally. The actual cost is the total amount the shipper pays to ship goods from one location to another. CBP describes it as the amount that goes to the international carrier, freight forwarder, insurance company, and other service providers. Failure to find the correct total can impact the supply chain in numerous ways. For example, underpaying an import that must go through customs can result in a cargo hold at customs. This article will describe what goes into determining the cost and the documents shippers can use as evidence.
What Determines The Actual Cost of Freight?
Due to the numerous factors involved with shipping cargo internationally, many components can determine freight costs. These include outside considerations along with the shipment itself. The type of goods that a carrier is moving is a primary basis for the shipment. For example, freight can be fragile, hazardous, or perishable and require special handling, which may lead to higher pricing. Valuable goods like jewelry are expensive to ship due to their high monetary value. Weight and volume are other determinants of freight costs. Heavier shipments typically cost more than lighter ones. Oversized cargo, like large machinery, may also have higher costs due to the handling.
Along with the freight that the shipper is moving, outside factors like the method of conveyance can determine the costs. Despite the benefits of transportation by air or sea, airfreight tends to be more expensive. The distance of cargo transport also influences costs, with longer distances costing more. Other determinates include fuel costs and additional services like handling, domestic shipping, and tracking. Shipments can also have insurance, which goes to the total freight cost. When goods enter the designated port, they must pay other charges like duties or taxes before customs releases them.
Where To Find The Actual Freight Cost?
Some of the documents that the shipper can use to find evidence of actual freight costs include:
Commercial Invoice – A commercial invoice is a document that acts as a transaction record between the exporter (seller) and importer (buyer). Customs officials use it to assess import duties and taxes; it is also evidence of sale for the shipper.
Bill of Lading – The bill of lading is a legal document between the shipper and carrier that describes what the shipper is shipping. It acts as a receipt for the cargo and provides vital information such as freight charges.
Proof of Payment – This document confirms a transaction between two parties. Examples include checks, bank statements, and letters of credit.
Freight Contracts and Agreements – These agreements between shippers and carriers outline the agreed-upon terms and conditions. They establish the parties’ responsibilities and can provide evidence of the actual cost.
It is essential to note that customs officials have the discretion to accept a document as evidence.
Although the documents described in the article can help find the actual freight cost, they may still confuse shippers. Due to the different fees involved in shipping internationally, inexperienced shippers can have difficulty determining the price. A way to find the total cost is by using the help of a freight forwarder. Forwarders are third-party companies that act as the middlemen between the shipper and the carrier transporting the goods. They determine the total transport cost, provide the paperwork, coordinate the cargo movement, and provide other solutions. Contact A1 Worldwide Logistics at 305-425-9752 or info@a1wwl.com to speak to a forwarder regarding the success of your shipment.
