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For Shippers, FBA

6 ways to optimize ocean freight cost

For business owners, searching for ways to cut costs is second nature – and optimize freight costs is an excellent place to bring down operational expenses. Navigating the world of international shipping rates may seem like a tough objective, but the reduction in price is worth giving some of these strategies a try. We’ve compiled some methods that you might be able to use in order to optimize ocean freight cost, mainly when shipping Less than Container Load (LCL).  Let’s take a look at them:

  1. Minimize the LCL shipments and consolidate into a container

If you have multiple products that you need to ship, and they are all coming from the same part of the world, you may be able to consolidate your cargo into one container (either 20” or 40”).  It is likely that a full 20” container will be more expensive than multiple LCL (Less than Container Load) shipments.  It’s a good idea to check on this, as you could be saving on shipping. Make sure you compare rates of both LCL and FCL (Full Container Load). The fact remains that you will have to plan way ahead for a consolidation so that your different suppliers deliver your goods at the same time. You’ll also need to make sure your inventories can wait for the arrival of the consolidated goods. If you’re unable to consolidate your LCLs, consider sending fewer, larger shipments, which can also help reduce costs.

  1. Ship in bulk

A good way to make your shipment smaller, and pay less, is to pack everything in bulk to take up less space – get rid of small internal packages. You can take care of re-packing after your shipment arrives. If you ship FCL, you can also make an analysis of the different layouts to load a container, to guarantee that you occupy as much space as possible – though you will still need to be mindful of the weight!

  1. Check parcel services for small LCL shipments

When the shipments are too small –i.e.: 150 kg or less- the freight cost might be higher than a parcel service. It doesn’t hurt to check prices with parcel companies and compare them to your freight cost.

  1. Ensure you provide correct data

This may sound irrelevant, but one important step to optimize ocean freight cost is to double check all your important delivery data – you will lose money if your freight forwarder has the wrong information. For example, your office address is probably not your delivery address (your warehouse), and it can happen that the latter is ignored in a BL. In a case like this, the delivery could very well happen at your office. Besides the address, some small details such as the PO number can mean significant costs if papers need to be matched and the forwarder has to spend time asking you for confirmation. Extra time can mean extra storage fees. And even if it’s not translated into direct costs, time wasted with fixing those details is time for which you wait to have your goods delivered.

  1. Provide accurate weights and sizes

If the weight and size provided for your shipment turn out to be incorrect, the shipping rate can change. It can increase or decrease depending on how close your volume and weight is to the next level of rates.  For example, shipping 4.5 CBM might be more expensive than shipping 5.5 CBM when the rate level limit is 5CBM. Since the shipper is the expert in packing the goods, he should be able to provide accurate dimensions for an accurate quoting.

  1. Audit the invoices

LCL freight invoices are calculated based on dimensions and weight, which varies from shipment to shipment. Because these invoices can vary so much and the calculations are complex, there is always a risk of a mistake on your invoice. To make sure you are optimizing the ocean freight cost, ask your forwarder to send your invoices in a timely manner, and set aside some time to compare them with the original quotes. The cost of not auditing the invoices can be high. It is hard to rectify a faulty invoice with a reimbursement from your forwarder once you have already paid for the shipment.

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