Difreight Blog What is freight and how does it affect the price of sea freight from China

What is freight and how does it affect the price of sea freight from China

What is freight and how does it affect the price of sea freight from China

The price of the product for the final consumer and the profitability of the business for the entrepreneur depend on the cost of shipping from China. But do you know exactly how this value is formed? We explain what freight is and talk about the main factors that affect the cost of transportation.

What is freight and how it is formed

Freight is the fee for the carriage of cargo paid by the shipper or consignee to the shipping line. The basic cost of sea freight is formed on the basis of information about the type, dimensions of the cargo and the ports of departure and destination.

The main cost of freight consists of direct costs for the delivery of a container or groupage by ship, which depend on the type and size of the container. In addition, the basic rate includes THC (Terminal Handling Charges) — costs for unloading and loading at the port.

Additional surcharges to the basic cost of freight

Additional surcharges are not included in the basic freight rate. They compensate the costs of the ship owner and depend on the specific conditions of transportation.

Additional payments are possible:

  • CAF (Currency Adjustment Factor) – a fee to compensate for losses due to currency exchange rate fluctuations;
  • BUC (Bunker Adjustment Factor) – additional payment in case of rising fuel prices for the ship;
  • DOCS (Documentation Fee) – payment for issuing additional documentation at the port;
  • some transport and forwarding companies include payment for documentation processing, cargo packaging, interest deductions for disassembling the collapsible container, etc. in the fees

It is necessary to analyze in detail the final cost of sea freight and clarify which specific additional costs are included in the selected rate.

Importantly. Unfortunately, ports are currently blocked in Ukraine. Therefore, cargo from China can be brought to Ukraine only if it is first delivered by sea to the ports of neighboring countries.

Sea carriers transport large consignments of goods whole and intact thanks to the technical equipment of ports and ships difreight

Sea carriers transport large consignments of goods whole and intact thanks to the technical equipment of ports and ships

On what factors does the freight depend?

Length and direction of the route

The further the cargo needs to be transported, the more expensive the delivery costs. Shipping costs may vary depending on the port of loading or unloading. For example, the port of Shenzhen has a larger capacity than Shanghai, so the freight may be lower here.

Availability of return cargo

In the case that there is no cargo in the reverse direction, the sea line reduces the cost of transportation, so the freight will be very low.

Length and direction of the route

The further the cargo needs to be transported, the more expensive the delivery costs. Shipping costs may vary depending on the port of loading or unloading. For example, the port of Shenzhen has a larger capacity than Shanghai, so the freight may be lower here.

Availability of return cargo

In the case that there is no cargo in the reverse direction, the sea line reduces the cost of transportation, so the freight will be very low.

Universal containers are used for sea transportation, which can then be transshipped onto the railway or road transport difreight

Universal containers are used for sea transportation, which can then be transshipped onto the railway or road transport

Season

Unfavorable weather conditions (wind, precipitation, fog) and increased demand for transportation of seasonal goods cause an increase in the cost of transportation. Therefore, it is worth adjusting the strategy of shipping containers from China depending on the season, taking into account demand and market conditions to optimize your transportation costs.

Safety of the route

If the ship's route passes through a dangerous area, such as a war zone, the cost of transportation from China increases.

Additional costs

Payment for passage through certain straits, necessary internal and external customs duties, rising fuel costs also increase the final amount of freight.

Development of the industry

The introduction of new routes, the purchase of additional equipment for shipping lines, and the modernization of factories lead to a decrease in the cost of sea transportation.

In order to find the best conditions for shipping from China to Ukraine, you need to analyze all factors affecting freight and compare different shipping options. If you want to avoid nerves and unnecessary efforts, contact the DiFreight company, we have deep expertise in international transportation, we will help you optimize logistics and ensure smooth delivery of goods.

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