Calculate your freight costs

When selling on a basis other than Ex Works (EXW), the cost of freight should always be included in your price quotation. You can do this in two ways:

1. Include the costs of freight in the price of every item - so that the buyer believes there is no extra charge for freight

2. Calculate the exact freight charge of each item and include the total separately on the invoice - this way the buyer sees the lowest possible prices for your products

Calculating costs

Freight costs are normally quoted on a port-to-port basis. When calculating your freight costs consider:

Actual weight or volume weight of your consignment (quoted in cubic metres or tonnes)
Mode of transport
Weight of the pallet used to transport your units
Loading and unloading costs involved in multimode transport
Port or terminal fees
Bill of lading (shipping documentation) fees

You may also incur additional charges relating to your terms of trade. These include:

Cost of moving the goods to and from the port
Handling the cargo
Port costs
Documentation
Finance

Airfreight

There are yet further charges and constraints to consider if transporting your goods by air. Airfreight costs will vary according to the following factors:

Tariff classification
Competition in routing
Space availability
The forwarder's willingness to share commissions

Cut freight costs

There are a number of ways you can save on your freight costs:

Use a multimode transport agreement - this will include the loading and unloading costs involved when changing modes of transport
Use a shipping association with others exporters to receive discounts
Find the lowest rates provided by carriers
Use the correct (smallest) containers
Check the minimum charge for freight (e.g. seafreight is usually 0.5-1.5 tonnes and airfreight usually 10-20kg)