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Shipping surcharges should be history by 2020 – Here’s why

By ussa-login on Monday, January 16, 2017 - Blog

Shipping surcharges have had freight owners in a frenzy for a while as international ocean carriers, often seemingly arbitrarily, adjust their surcharges. Shipping rates change almost weekly and that causes confusion among freight owners. Keep reading to learn more.

Many shippers have made their voices heard over the constant battle about surcharges. As more and complaints and violations surface, carriers are being strongly encouraged to rethink the surcharge issue and put an end to them. Negotiations are taking place in order to find solid ground for rate surcharges.

While negotiating, a few factors must be taken into consideration when eliminating surcharges, which include:

  • Pre-carriage / Oncarriage
  • Fuel prices
  • Out-of-gauge shipments
  • How to accommodate tight-space periods
  • Constantly evolving/increasing security requirements
  • Government intervention/requirements
  • Eco-friendly/environmental rules/restrictions
  • ISO global mandates

Surcharges can add more than 40% of the original cost to the container, making it difficult to identify the true cost of a shipment. While surcharges originally popped up as an attempt to make the cost of shipping more transparent, it is increasingly seen as no longer a measure of pass-through costs, but instead a revenue-generating scheme of its own, thus arousing push-back from shippers. As a result, more and more shippers are now asking for all-inclusive rates that avoid the long list of surcharges tacked onto the base ocean freight.

 

USSA – For freight services that keep both the company and cargo owner happy 

USSA has been negotiating ocean shipping contracts for its members for over 31 years and has seen various business cycles. They provide members with an electronic contract management platform that shows in-depth bottom line detail and freight spend.

For more information, contact us today.

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