Market Trend or Bad Rate?

In late May, shipping a 40-foot container from Shanghai to Los Angeles cost about $3,500. By mid-September, it cost about $8,000.

When freight costs more than double in a few months, most importers ask the same question: Is this the market, or is it my freight forwarder?

The answer matters, because it decides what you do next.

WHERE FUEL SHOWS UP ON YOUR BILL

Longer routes around Africa, congestion in Asia and peak-season demand are all pushing rates up. Fuel is a big part of it.

On the ocean leg, fuel is built into the freight rate, so you can't see how much of the increase it accounts for.

On the delivery leg, from the U.S. port to the final destination, fuel is usually a separate surcharge based on a percentage of the trucking cost. The fine print often allows that percentage to change. In our experience, a surcharge quoted at 47% can show up on the invoice closer to 58 or 59%.

THE PROBLEM WITH ONE QUOTE

If you work with one freight forwarder, you see one price. When it doubles, it's hard to know whether the market moved or your provider did.

Many importers assume it's their provider and start shopping around, even when the whole market has gone up. Sometimes the opposite is true, and they have no way to know.

EVERY QUOTE IS A MARKET CHECK

At VentureSource Lead Logistics, up to five freight forwarders quote on every shipment. If all the quotes rise together, it's a market trend. If one is far above the others, that tells you something about that provider.

Our customers get the best available rate and a clear view of the market, while working with one partner.

WHAT IMPORTERS CAN DO

• Compare prices regularly. One price tells you what you're paying. Several tell you whether it's fair.

• Read the surcharge terms. Know which charges can change after you book.

• Budget for variability. Fuel-related charges may rise before the invoice arrives.

BOTTOM LINE

No one can control fuel prices. But when you can see the whole market, you can tell the difference between a market trend and a bad rate.

Learn how VentureSource helps importers the best price for the best options on every move: VentureSource Lead Logistics