How are ocean rates determined?

July 19, 2020

Written By: Translogistics

Ocean shipments can move via two main methods – FCL (full container load) and LCL (less than container load) – their pricing is calculated very differently FCL
  • FCL shipments are much like domestic truckload shipments – the requestor purchases the right to utilize the entire container – they are also priced much like domestic truckload with a rate per container
  • There are 3 separate movements which comprise an FCL ocean shipment – origin inland drayage, ocean transportation from port to port, and destination inland drayage – the IncoTerm will determine who is responsible for which portions between the seller and the buyer
  • There are lots of line item charges to be aware of when quoting an FCL container, which is why you want to ensure you are always getting all-in costs and to verify you are comparing apples to apples when getting quotes.  Many times, companies do not include all the fees in their original quote
  • For smaller shipments that will not fill the capacity of even a 20’ full container, LCL (less than container load) service is available – this is priced much like a domestic LTL shipment – by weight and cubic volume
  • As with FCL shipments, LCL shipments consist of 3 separate transportation charges – LTL portion from origin to port, LCL ocean transportation from port to port, and LTL portion from port to destination
  • The LTL portions are priced via standard LTL pricing
  • The ocean transportation portion is billed by the greater of the rate as determined by weight or the rate determined by cubic volume – the cubic volume rate is used for the same reason that freight class is used in standard domestic LTL service – it helps avoid using too much of the container for the low weight of a low density product without the carrier being properly compensated for the space used
  • LCL transportation also requires additional transit time – it is of vital importance to communicate any delivery or due date requirements up front prior to booking an LCL shipment

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