Eight Main Factors that Affect Ocean Freight Rates

The following are the factors affecting ocean freight rates: 

1.Intended destination: The intended destination is an important factor when it comes to calculating ocean freight rates. In simple terms, the longer the journey, the exorbitant the ocean shipping rates andvice-versa

2.Service Charges: Any extra charge levied by port authorities like the security service charges also tends to affect the ocean freight rate

3.Season: For certain goods, the season becomes a very important factor. Grains and fruits transported during a particular freight season will have higher cargo rates and vice versa

4.Currency: In today’s times, the common denomination used for international transaction purposes is the dollar. Ocean freight rate depends on the fluctuating rate of exchanges and therefore is likely to belevied on the latest prevailing exchange rate

5.Fines and Fees: If there is any delay in ship reaching the port because of over-crowding, then there might  be a fine imposed which affects the ocean shipping rates

6.Terminal Fees: The ocean freight also depends on the fees to be paid while embarking the journey from a port and after reaching the intended destination. These fees known as terminal fees also affect ocean freight rate

7.Bunker Capacity:bunker are containers to store the fuel. Rising fuel prices and the latest prevailing fuel rates will affect the freight charges

8.Container Capacity: The containers used to store the goods functionon the simple economic principle of economies of scale. If the shipper does not have enough goods to fill the containers to their optimum capacity, it will affect the freight charges by way of the shipper having to pay more in spite of lesser quantity