Nine out of ten of the world’s freight are carried by maritime freight. It is therefore an essential element for the import and export activity of any container shipping company.
This activity is characterized by a range of freight rates which, in addition to variations in supply and demand, are strongly influenced by changes in relations between the different sectors.
Besides these structural factors, there are other variables depending on the route, weight of the cargo, port charges and shipping line surcharges as well as others over which shippers have no control, such as GRI, EBS, WRS and other surcharges that have a decisive influence on the price of maritime freight. But which are all these factors? We will tell you about them below!
Main Factors that Affect Ocean Freight Rates
1. GRI
GRI (General Rate Increase) refers to the adjustment applied by shipping companies to the price of ocean freight on all or certain trade lanes.
It occurs when shipping companies find that the level of sea freight is very low. Although it can affect any fee of sea freight, recently the routes most penalised by the GRI are those originating in China and other ports in its vicinity.
Once the shipping companies have agreed on which routes will be altered by GRIs, how much they will increase and when they will take place, this is officially communicated and gets underway within a week.
2. High season
As in all other industries, maritime freight also has seasons with a higher occupancy of services.
These influence port availability, the agility of logistics chains and, of course, shipping costs.
The peak shipping season runs from July to November. This is the time when companies around the world import products to stock up for the Christmas season.
👉 Find out: How can you save extra on Shipping Charges during the peak season?
Each time it arrives, shipping companies increase their rates due to high demand, sometimes even charging a special surcharge to compensate for the logistical costs of such unusual demand.
Shipping routes from China are also affected by two other peak seasons coinciding with the Chinese New Year and Golden Week.
High seasons not only mean higher freight rates, but also congestion at the logistical level, making it difficult to secure freight and increasing the chances of delays and extra surcharges or container shortages.
Regarding this last point, with BOXXPORT you can rest assured since we have a large number of containers in which you can check their availability in real time. Buying shipping containers with total transparency has never been so easy!
3. EBS and WRS
The EBS (Emergency Bunker Surcharge) is another factor that influences freight costs
It is a surcharge to compensate for unusual increases in fuel prices.
Unlike other surcharges, such as those intended to cover unforeseeable factors like piracy or the risks associated with sailing through war zones (WRS), the EBS can be applied at short notice, causing budget shortfalls and logistical disruptions in various parts of the world.
4. Occupancy, demurrage and inspections
Occupancy, demurrage and inspections of goods are excess costs that are usually not taken into account in planning, but have a major impact on the final freight rates of international freight.
- Occupancies: each port charges a fee for the occupation of space by each container. The carrier allows a five-day grace period.
- Demurrage: these are the costs for the use of containers. The free days are usually seven, although they can be negotiated.
- Inspection: the port authorities reserve the right to carry out inspections of documentation and goods, which entail costs.
Although these are beyond the control of the shippers, there are mechanisms to help to mitigate them. For example, by leaving the country of origin with all documentation filled in correctly, updated and properly ordered, which can significantly reduce customs delays.
Proper planning, carried out in advance and taking into account all possible scenarios, may be crucial to reduce delays and additional costs as much as possible.
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