Navigating the waters of international shipping is tricky enough without surprises in your bill.
Unfortunately, due to a variety of issues baked into our industry, customers often experience post-shipping sticker shock when an order’s invoice doesn’t match up with an earlier quote.
While some disparities in your bill might be the result of natural disasters, late delivery of the shipment to the forwarder at origin, and other unforeseen events, occasionally an unspoken charge will appear on the bill from your freight forwarding partner.
Because we operate in an industry with so many moving parts across so many geographies, it’s not surprising that billing can be confusing. But sometimes it can be flatly inaccurate.
What Is Included In Your Quote?
You should always ask for a quote when you schedule a new shipment with a freight forwarder. The benefit to this is twofold: you’re able to see exactly what you’re paying for and, more importantly, what you aren’t paying for.
There are certain logistical aspects of freight forwarding that won’t just disappear if they aren’t on your quote. If you don’t see them, your final bill will probably be more expensive than you might think.
It’s not uncommon to receive an all-inclusive rate. Again, it’s important to determine what your freight forwarder means by all-inclusive. A resort might call itself all-inclusive but it’s not going to comp the turkey wrap you bought at the airport before your flight. What has to happen for your shipment to get from point A to point B, and who is responsible for the cost of each of those discrete links in the supply chain?
Signs of Inaccuracy to Look For
When you receive a bill, there are two things you should do immediately to determine whether there is an error.
- Compare Your Quote to the Invoice
The first step may sound obvious, but it’s worth saying. Take the time to compare the quote you received with the final invoice. It’s easy to quote a low price when you’re trying to win a client’s business, and just as easy to tack on charges that aren’t top-of-mind during the exploratory phase of working together.
- Weight And Dimensions Of Your Shipment
The second step is to compare the weight and dimensions you were quoted for against the ones that were shipped. Many factories will quote these specs based on pre-wrapped or palletized items. These two factors will be counted towards the weight and dimensions of your shipment, which will of course change your overall cost. This is easy to avoid by simply asking your factory to quote based on the post-wrap specs.
Many of us have become accustomed to a world of intangibles where it’s easy to leave room for a margin. Those costs are fixed for the most part. There’s some context switching that should occur when you consider what’s actually going to happen to your shipment on its way from the factory.
Certain conditions such as weather and strikes can’t be accounted for in your initial quote, but there are contingency plans that can be factored in. If your freight forwarder is transparent, they will communicate what these unexpected costs are and how much of them will be transferred to you, the customer.
Added Costs to Keep on Your Radar
Once you’ve noticed a possible discrepancy in your bill, here are some charges to look for that will help you quickly determine your next steps.
Chassis Charges
Some lines include the chassis charges in their quotes, some do not. These charges generally cover the amount of free time you had with a chassis, and any detention time for container use. Unfortunately, because containers are always in motion based on demand, many freight forwarders will quote you a price that only covers 24-48 hours.
If you happen to need more time for your shipment, you’ll begin to incur additional charges. If your shipment encountered bad weather or ran into delays, it’s possible your bill turned out higher due to chassis charges.
Volatile Shipping Rates
Volatile rates is a huge factor to consider when you evaluate a quote from a potential partner. It could cause a cold sweat when you receive the final bill. Rates are changing every two weeks, and supply is particularly tight when you’re shipping from Asia.
Here’s an example of volatility influencers in international shipping:
Right now, ocean carriers are restricting the number of vessels in operation at any given moment. This artificial constraint on supply has led to continual rate spikes because there’s more demand for space than is available.
Pretty simple economics. However, these price spikes are occurring at a rate of every 15-30 days. You’ll want to make sure you note how long a quote’s price is valid for, especially the shipping rates. Even if your chosen freight forwarder won’t adjust their quote, at least you can set expectations for the increase you’ll likely see in the bill.
LCL and Air Freight Palletization
In most cases, LCL (less than container load) shipments and air freight will arrive loose. It’ll just be a bunch of cartons. Many trucking companies won’t pick up loose freight, they want it all on pallets. In that case, the warehouse receiving the cargo will charge for the cost of the pallet and the cost of putting the cartons on it.
Ultimately, it’s up to you to scrutinize your quote and ask the hard questions of your freight forwarder. The more you know about the process of shipping from factory to destination, the better prepared you can be when evaluating a bill for errors. But it’ll also allow you to factor in these fluctuations to the price of your goods when possible.
