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“how to save on amazon fba shipping costs

It can really lower your Amazon FBA fees. You won’t let Amazon give you a discount, but you can change the way you use the service so you don’t incur unnecessary charges. You should also make sure all your data is accurate and claim back fees for any undiscovered mistakes Amazon makes.
Small changes can save you a little on every product you store in Amazon’s warehouses and more on every order Amazon fulfills for you. Multiply that by the thousands of units stored and thousands of orders fulfilled, and these small changes can save a lot of money.
Here are six key strategies to help you lower your FBA fees and add those savings directly back to your bottom line.

1. Ensure product dimensions are accurately recorded
Some different FBA fees are based on size and weight, including shipping and storage fees. Your product dimensions are already on Amazon’s system, but they are not always accurate. If Amazon thinks your product is bigger than it actually is, it will charge you more.
Why is your data inaccurate? To understand this, it’s useful to first understand how Amazon sets your product size. When you set up a new ASIN and send your product to an FBA warehouse for the first time, Amazon will scan the product using their Cubiscan system. They may then rescan your product from time to time to check if the dimensions have changed.

Despite using a high-tech measurement system, it’s not uncommon for Amazon’s measurements to vary significantly between scans. It’s not clear why this happened, but it could be air entrapment in the bag, sticky tape sticking out and confusing the scanner, or just operator error. Remember, Amazon won’t tell you if they’ve changed your product size, they’ll just update them and start charging you differently.
So what should you do? First, run the Expense Preview report. In addition to the FBA fee estimate, this also shows the full size and size class of all your products. Check them against your own data and determine if any measurements are inconsistent with your own data, especially if it pushes them to a higher level.
Then submit a case to Seller Support to rescan your product. Amazon will put your product back in the Cubiscan and (hopefully) correct the size. This should ensure you get the correct fee in the future, and you can also request a refund for overcharges on past orders – more on that later.
Check your product sizes regularly, as Amazon can update them at any time, or sign up for a listing monitoring tool to stay informed of any unexpected changes.

2. Improve items of various sizes and weights.
FBA fulfillment fees first depend on the size of the product, as specified by Amazon’s product size class. Products under 3 lbs that are classified as “”regular size”” are only paid according to the weight range they fall into. Products weighing more than 3 lbs are also subject to variable weight charges. There will be a $2.50 delivery fee for small standard size products up to 10 ounces in weight. Due to the size and weight classes used, additional charges may apply for products that are slightly larger or heavier than the top – sometimes considerably more. Let’s look at another scenario. A large, standard-size product weighing 16 ounces will be charged a $3.48 delivery fee, while the same size product weighing 17 ounces will be charged $4.90. That’s $1.42 above the bottom line, a 41% increase. If you sell 10,000 products per year, you’ll save $14,200, which may be adjusted slightly to fall into the lower end of these ranges. Therefore, one of the first actions all sellers should take to reduce fees is to determine which size and weight range their products fall into. Current product size tiers and FBA fulfillment fees can be viewed here. Below are excerpts from the book. The first item to search for is something at the very bottom of the size or weight range, such as those in the example above. How do you reduce the size of such items? Since selling items online is different from selling in a typical brick-and-mortar store, it is crucial to choose elegant product packaging that is as small and light as possible. However, if you want to save FBA costs quickly, try to modify the critical product in one of the following ways: The empty space in the box should be reduced or eliminated. Replace larger cushioning material with thinner cushioning material. Instead of keeping accessories in their own area, place them in the product. Some user assembly is required to get the product to fit in the box better. Making these adjustments can take some effort and effort, but as long as you sell the product, the investment will pay off. Remember, entire industries have been transformed by transforming packaging and merchandise to reduce size and weight – look at IKEA furniture.

3. Do all the necessary preparations in advance
FBA has many, many requirements on how sellers use the service. These cover inbound shipping, product packaging, barcode labels, and more. To give you an idea of ​​how wide these requirements are, there are 15 pages on Seller Central for product packaging alone, covering general requirements for all products, as well as general requirements for liquids, powders, glass, batteries, plush toys, sharps, clothing, jewelry, baby products, etc.
Many sellers will take the simple option of paying Amazon for all the necessary packaging and getting it ready for them. This has some big drawbacks:

Amazon charges a fee for every item they have to prepare for you.
It will take longer for your inventory to be available for purchase.
If you choose to use manufacturer barcodes instead of Amazon FNSKU barcodes, your inventory can be “”blended”” with other sellers’ inventory.

4. Get unfinishable inventory from FBA
When a customer returns a product, Amazon will inspect it and decide if it can be resold. Products that are in such poor condition that they cannot be resold are called “”unfulfillable””. They will stay in the fulfillment center and incur storage fees unless you take action.

To find out if you have any unsellable inventory, run the Availability Report in Seller Central and check the “”Total Unsellable”” column. If you have any unsellable inventory, you can choose to either destroy it or return it to you.

Alternatively, you can choose to use the new FBA Grading and Resale or FBA Liquidation programs. All of these options have associated fees, but they will certainly be cheaper than charging for FBA storage indefinitely.

5. Review and file claims for your FBA invoices.
Many FBA sellers are unaware that there may be inconsistencies in Amazon’s fees and that they are eligible for repayment under the FBA inventory reimbursement policy. The following are the most important details to be aware of.

The average annual charge discrepancy, in our experience, varies between 1% and 3% of yearly FBA sales. In other words, claiming all of the FBA reimbursements you’re eligible for could boost your net profit margin dramatically. Another way to look at it is that out of every 100 units shipped to FBA, one to three will have a discrepancy along the route.

Keep in mind that Amazon pays the retail value of the affected inventory, not only the cost of the inventory, when providing an FBA reimbursement. As a result, you receive both the profit you would have made on that inventory and the money you spent to purchase it.

You only have a certain amount of time to file claims. In the United States, Amazon allows 9 months to reconcile Amazon FBA inbound shipments, and 6 months in the European Union. For lost, damaged, discarded, or removed units, as well as improper customer refunds, you have 18 months to file a claim. You only have 90 days to file a claim for overpriced fulfillment fees.

It is your responsibility to review your inventory, transaction, and fee data for irregularities and make claims before the deadlines pass. What evidence do you have to back up your claims? You’ll need to file cases with Seller Support to alert them to the discrepancies and supply any extra information they need. Documentation such as bills of lading, proof of delivery, invoices, packing slips, and more may be requested.

Seller Support may dispute your claims or pay a lower compensation than you requested. To establish the case for a full refund, you’ll need a clear understanding of the charge and reimbursement regulations, as well as how to effectively reconcile your data.

Auditing your data for FBA charge recovery chances and filing claims with Amazon is a time-consuming and difficult procedure, but it’s typically well worth it. If you don’t want to do it yourself, there are companies who specialize in recovering FBA costs on on behalf of sellers.

6. Manage your inventory to minimize storage fees
Amazon’s use of storage fees, storage limits, and the Inventory Performance Index (IPI) provides a clear picture of how they want sellers to use FBA. All of these factors encourage sellers to keep inventory levels low so Amazon can fully utilize its warehouse capacity. If you treat Amazon’s fulfillment centers as personal storage units, you’re going to be heavily penalized.

Amazon’s storage fees are divided into three main levels:

From January through September, the monthly inventory storage fee for standard-size products is $0.75 per cubic foot.
The monthly inventory storage fee for standard size products from October to December is $2.40 per cubic foot.
In addition to the above fees, the long-term storage fee for inventory that has been in the fulfillment center for more than a year is $6.90 per cubic foot per month.
Please note that the monthly storage fee for oversized items varies, with a long-term storage fee of $0.15 per item, which applies if it is calculated higher than the quantity-based fee.

You can see that the total cost for 1 cubic foot of storage varies between $0.75 in January (products stored less than a year) and $9.30 in October (products stored more than a year). This is the same space but will cost you 12 times more.

Some sellers want to make inventory management as simple as possible and send bulk stock orders to FBA directly from the factory. This can be very expensive, especially if sales are slower than you’d like. The good news is that reducing your FBA storage fees is easy.”

“International Shipping Process Guide

Many newcomers to foreign trade, or those who want to contact foreign trade, do not know much about the process of shipping. This article will give you a brief overview.
There are various reasons for the movement of goods between countries, most of course for the reasons of increasing the value of the goods. With the rapid development of e-commerce, a large number of small businesses now require international shipping, here is an attempt to explain the different steps in the shipping of goods.
There are many players involved in international shipping, shipping companies, booking agents, freight forwarders, customs brokers; introduce the four main players of LCL shipping: shippers, consignees, freight forwarders and shipping companies.
A shipping company is a company that transports your cargo at sea. You may never talk to them or even see their documents or letters.
However, the freight forwarder is the logistics provider you will be dealing with. They can arrange shipping from shipper to consignee – you are one of them.
The shipper is the shipper at the origin; it can be you or the factory or seller from which you purchased the product.
The consignee is the recipient of the goods; this could be you or the person you are selling to.

Step 1: Export Shipping

After the shipping company confirms the booking, the goods need to be transported to the port. This process is called export shipping. The freight forwarder will need to obtain an empty container from the shipping company or container yard. Quality inspection and capacity assessment of containers are important as failure to do so may affect the quality of the cargo being transported.
When picking up an empty container from a shipping company or container yard, the consignee needs to provide three documents, which must be presented by the freight forwarder.
power of attorney
ID card
Compensation letter
After obtaining the empty container, the cargo is now loaded into the container, ready to be transported to the terminal for onward loading onto the ship. Transportation can be done by road (via container trucks), rail, barge or intermodal, depending on the terrain or geographic location. Export shipments are usually arranged by local transporters with local expertise or local operations. However, it is highly recommended that an experienced freight forwarder understand the requirements, document processes and be able to determine the best shipping method at a competitive cost within the required time frame.

Step 2: Export customs clearance

Export customs clearance is a basic requirement for international shipping and must be completed before the goods arrive at the terminal for loading. The process varies from country to country and includes important steps and principles that all customs authorities follow. Below are the basic steps and required documents for export clearance.

Basic requirements for export customs clearance
Make sure the business is registered with the government with a certificate of incorporation and a certificate of approval from the TIN NO
Confirm that the goods are not prohibited and can be exported.
Make sure the same goods are not restricted in the importing country
Confirm the export classification code (HS CODE) of the material or product you are exporting.
Obtain an export license or license (if required)
Obtain a cleaning inspection certificate from an inspection agency
Register an export declaration electronically or manually for each shipment.
Required customs clearance documents (export):

Exporter Registration Documents: This includes the Exporter’s Certificate issued by the NEPC
Quality Assurance Documents: This includes documents such as Certificates of Analysis and Test Certificates.
Financial documents: including but not limited to
Nigerian Export Earnings Form (NXP)
commercial invoice
proforma invoice
cargo movement document
Certificate of Cleaning Inspection (CCI)
waybill
packing list

Booking confirmation notice.

Step 3: Terminal Processing

The next step after export clearance is terminal processing, also known as origin processing. At this point, the freight forwarder determines the vessel required for transportation and begins terminal processing, which requires the following.
After customs and shipping company documents are confirmed, the cargo is unloaded from the truck and transferred to the terminal staging area for counting and inspection.
Terminal authorities use customs clearance documents to verify booking details to ensure and verify that the cargo is confirmed for international shipment. A dock handling invoice is issued to certify that the goods have been received at the dock.
Containers are stored in terminal ports, waiting for ships to be ready for loading and shipping.

Step 4: Sea Shipping

The freight forwarder decides to choose a shipping company to perform the ocean freight from origin to destination to meet the schedule required for the shipment. A freight forwarder has a contract for the carriage of containers with a shipping company, in which case the shipper or consignee does not have any direct interaction with the shipping company.

Shipping costs are ultimately borne by the shipper or consignee. However, ocean shipping is never the full cost of shipping from port to port. There are various surcharges imposed in the industry, such as fuel adjustment factors and currency adjustment factors, which are passed on to the shipper or consignee.

5. Import customs clearance

Import clearance can usually begin before the goods reach the destination country. As for export clearance, it is a procedure for making a declaration and submitting it along with the relevant documents so that the authorities can register the goods and collect any duties. Import customs clearance shall be handled by the forwarder or the agent of the forwarder, or the customs broker designated by the consignee.

Import customs clearance procedures must be completed before the goods leave the bonded area of ​​the destination country. Usually, this means before the goods leave the freight forwarder or the freight forwarder’s destination warehouse.

6. Destination processing

As for the origin, the goods also need to be loaded and unloaded at the destination before they can be released to the consignee. Simply put, destination handling involves the transfer of containers from ship to shore and from port to the freight forwarder’s destination warehouse. It also includes unloading the container and preparing the cargo for pickup by the consignee.

Trucks for transporting LCL cargo
Destination processing includes multiple destination charges and is always performed by the freight forwarder or the agent designated by the freight forwarder. A fee can be charged to the shipper or the consignee, but payment in full is always required before the goods are handed over to the consignee. Likewise, if the agreement is that the shipper pays the ocean freight and the consignee pays the destination fee, it is actually the shipper who decides who the consignee has to buy destination processing from. As discussed for origin fees, this can create some friction or surprises for unplanned recipients.

Step 7: Import Shipping

The transfer of goods from the import warehouse to the consignee’s address and the final destination of the goods is called import haulage. Transportation can be done by road (via container trucks), rail, barge or intermodal, depending on the terrain or geographic location.

Import shipments can be handled by forwarders who handle international ocean freight or by local freight companies specializing in import shipping services. If a freight forwarder is responsible for import shipments, they will use their trucks or contract with a third-party freight company to do the job. Alternatively, the consignee can choose to collect the goods at the destination warehouse to save on import shipping costs.”

“How to Print Amazon Product Labels

Amazon FBA is growing in popularity, and it’s not hard to find out why. A service that saves you time and reduces operational stress; take your shipping stress and put it in the hands of the world’s largest online retailer where on-time delivery is second nature…for This is a no-brainer for growing businesses with limited internal resources.
Millions of products can be purchased with the click of a button, so it’s no surprise that Amazon’s automated fulfillment process relies heavily on accurate barcodes and labels. So if you want to be part of the FBA action, you will need to know what Amazon wants and give it to them the way they want.
Any product you want to send to Amazon for their fba service needs to be clearly marked and contain the specific information they need. Amazon can actually fine you if you get it wrong, but don’t worry, we’re here to help you learn how to get Amazon barcode labels right the first time, everything you need to know every time.

What is an Amazon FBA label?
Amazon FBA labels are specific labels that help Amazon collect, store, distribute, and ship your products in fulfillment centers.
Since FBA is a very large-scale business, Amazon relies heavily on these specific barcodes and labels. These FBA labels ensure that the right customer is getting the right product from a valid seller.
Additionally, these special labels make tedious sorting, management and shipping a breeze, enabling fast shipping and faster delivery.
Failure to follow these shipping rules can result in unnecessary fines, delays, and sometimes even the return of your product from a fulfillment center.

What are the most common types of labels?
It would be ideal if you knew about the different types of tags. In short, tracking your shipment or individual product requires only two main barcodes:
Manufacturer Barcode – UPC, JAN, EAN or ISBN
Amazon Barcode – FNSKU

What should the label contain?
Some sellers make the mistake of labeling too much or too little. Fewer details can make it difficult for fulfillment teams to assign your products to the correct storage.
The same applies to labels that contain unnecessary information, as it can sometimes confuse bar readers. To avoid all this, every label on your shipment should contain three basic elements:
Valid FNKSU barcode
Product name, such as dog bars, toys, etc.
Product condition, such as used, new, etc.

What are the barcode label printing options?

As an Amazon seller, you have four printing options at your disposal. They are as follows:
1. Print it yourself
You can print your labels with all the necessary tools available on the Amazon Seller Central page. However, this method requires you to have a printer and printer rolls for creating, printing, and pasting.
2. Amazon Label Service
Amazon Label Service gives you an easy option to have Amazon add your stickers in fulfillment centers. However, you should change the “”Who Prints”” setting to “”Amazon”” to activate the service. Amazon US charges a flat fee of $0.30 per item for Standard FBA and $0.10 per item for FBA Small and Light. In contrast, Amazon Europe charges £0.15, £0.25 and £0.35 per item, depending on the size.
3. Use an existing barcode
If your product is eligible for a manufacturer’s barcode, you can use your existing barcode and avoid the hassle of printing.
4. Customize the printing barcode
Ordering custom printed barcodes is an easy way to streamline the labeling process without taking too much time. You can let third-party companies create custom printed barcodes with shape, size, and design elements.

How to Print Amazon FBA Labels
Amazon Seller Central knows how frustrating it can be to print all these product labels, so they try to make the process as painless as possible. To print your Amazon FBA label, follow these steps:

Login to Seller Central

Go to Inventory > Manage FBA Inventory from the menu bar
Scan your product listing and find the product for which you want to print a label.
Click Edit to the right of the selected product
In the drop-down menu, click the Print Items tab
Select the number of labels to print on the right
Click on the paper/sticker type and choose your preference
When done, click the Print Projects tab
Amazon generates the labels for you, so you don’t have to worry too much about the details.

some label paper requirements
For Amazon FBA, you need to follow three basic label stock requirements:
The paper should be completely white and 100% non-reflective.
You should strictly use black ink to print barcodes. Color inks do not perform well in a variety of climates and shipping conditions.
Make sure to use a removable adhesive so customers can easily remove the label after delivery.”

“7 Ways to Improve Amazon Profit Margins
While Amazon has become an important sales channel for many brands, increasing sales and fulfillment fees are shrinking profit margins, making Amazon more and more expensive as a sales channel. Fortunately, many brands have found ways to increase profit margins when selling in this massive retail market. Here are 7 ways brands can reduce fees and other costs to improve profit margins.
1. Create a product package
One of the easiest and fastest ways to increase profit margins is to use product bundles.
If you’re new to bundling, you can offer multiple products in one Amazon listing.
The main benefit of bundling is increased profit margins and less competition in the Buy Box.
In most cases, creating a new listing means you’ll be a solo seller for quite some time (until other people notice that your bundle is popular and can use the same products).
If set up correctly, you can become a solo seller of the bundle and it’s still profitable as long as you keep selling it.

In a way, bundles are similar to private label sales – just easier and faster to create. If certain bundles don’t sell, you can always split them up and sell them as a single unit to get your money back (as you’ll be bundling popular products).

2. Use repricing software
This should always be your first strategy when it comes to improving Amazon’s profit margins, as it’s an easy-to-achieve way to achieve your goals.
Prices on Amazon change all the time, and you have to keep up with them. But instead of doing it manually, see why you should use the Amazon repricer.

3. Switch to a credit card for your inventory purchases
Maybe you pay the supplier via PayPal or your bank account. While that’s fine — especially if you’re just starting out and don’t have much income to do — you should reconsider this as you scale.
Replenishing your inventory with a credit card means putting more money back into your wallet with cash back, points or other rewards. Just make sure you pay your balance every month, otherwise, your increased profits may be forfeited.

4. Take advantage of out-of-stock products
Taking some time to find out-of-stock products can pay dividends, and as you might expect, speed is of the essence.

You need to find products that are out of stock but have good sales rankings on Amazon.
If you’re the quickest responder and ship your product to Amazon the next time it’s in stock, you’ll be able to enjoy some solo selling time during which you’ll be able to make a decent profit.

5. Purchase all remaining units from the supplier
Another great way to gain an edge over your competitors and make good profits is to keep an eye on the remaining numbers of popular products your suppliers have.
Some suppliers will display the remaining stock of a product on their website, if you notice a limited number of sellers for that particular product, consider purchasing all that is left over.
You should ask for a discount to take the remaining stock from them, but as long as it’s a popular product, consider buying it anyway.
It may take some time for your suppliers to restock, which means that when the remaining sellers are out of stock, you will be the sole seller and be able to enjoy the many benefits of that status.

6. Sell items that are often out of stock
This is a very high-risk strategy when it comes to improving Amazon’s profit margins, so definitely don’t rely on it as your primary method.
What it takes: Search for frequently out-of-stock products (with good sales rankings), buy from suppliers, and wait for other listings to be out of stock. When this happens, activate your listing, but the price is much higher.
Buyers will suddenly see your listing as the only one available and will buy from you, leaving you with a very high profit margin.
However, doing so has many risks:
There’s no guarantee that buyers will pay the higher price, as some may be content to wait for a lower-priced alternative to emerge. It might take some tinkering to find the fine line between high profit margins and ridiculous prices.
If the gap between product out-of-stocks is too great, your long-term storage fees (if you store them that long) may offset or exceed your profit margins. Using this method on fashion items may leave you with products that are trending in the past, rather than products that are in high demand.

7. Allow Dynamic Listings to Drive Profits

Slow-selling products on Amazon reduce profits, making inventory another critical area to check.
How much inventory does Amazon store and how long will it be there?
A surprising number of national brands do not know the answers to these questions.
Experienced brand managers know that storage costs can be high if product turnaround times are too long. In fact, Amazon recently changed the way they set inventory storage fees, making 2018 even more expensive.
Now, they’re preventing inactive product inventory by raising storage fees and changing the long-term storage fee structure from billing every 6 months to billing monthly. By moving from semi-annual to monthly assessments, fees have increased by an average of 6%.
The bottom line is that Amazon has fulfillment centers, not warehouses.
Amazon doesn’t want to store your products longer than they have to, so they use fines to incentivize brands to move inventory quickly. As a result, brands that take up valuable real estate in their packaging centers face a higher risk of loss of profit margins.
National brand managers need to identify sluggish products that will seep into profits and then stop selling them on Amazon.
A better strategy is to promote a diverse SKU catalog on the brand’s company website and keep only the most effective SKUs on Amazon.
If a brand already has hundreds of products on Amazon to maximize reach and exposure, optimize the top-performing products first with ads and quality reviews. Increased visibility into profitable items can offset the extra cost of slower-moving listings.

Stay Profitable by Considering Context When Selling on Amazon
The cost of selling on Amazon often makes national brands question the ROI of directing more resources to this marketplace. What brands need to realize is that ignoring Amazon is not a viable option unless they want to risk losing the bulk of their e-commerce sales.
A better solution is for brand owners to approach each sales channel in a unique way and appropriately shift their perspective on marketing, customer acquisition, sales and profitability for each market.
For example, traditional e-commerce sales utilize email campaigns as part of their marketing strategy. However, this approach doesn’t translate well to Amazon, as brands are not allowed to remarket to consumers.
Once brand owners have adjusted their thinking, they can develop tailored strategies to maximize profits appropriately for each market.
Part of a brand’s strategy to improve Amazon’s profit margins is to validate all listing descriptions and check for inaccuracies. Brands should only keep items in their Amazon catalog with fast turnaround times and remove slow-moving inventory.
In addition to maximizing profits, it is also important for brands to expand their understanding of profitability to get the full value of selling on Amazon. In the overall picture of a brand’s success, immeasurable factors such as influence and exposure can far outweigh profits alone.”

“Amazon FBA Fee Calculation
With the rapid development of e-commerce, more and more people turn their attention to overseas markets. And Amazon is the world’s largest e-commerce platform, so many merchants choose to settle in Amazon.
Amazon’s operations include two major modes, namely the Amazon (FBM) self-shipping model and the Amazon (FBA) Amazon delivery model.

1. Advantages and disadvantages of self-shipping model (FBM)
These two modes have their own advantages and disadvantages. Self-delivery means that Amazon only acts as a sales platform, the seller’s own source channel. After a customer places an order in the store, it will be delivered to foreign customers through international express parcels.
Advantages: low investment, you can wait until the order is issued before purchasing, packaging and distribution are also operated by yourself, directly facing customers, and it is easier to build a good brand. The categories are more extensive. Some categories, including product characteristics, do not support FBA logistics (large-scale goods), and only self-delivery can be done.
Disadvantages: slow aging, slightly less orders than FBA mode. In fact, FBM is similar to the domestic Taobao store. The seller opens a store on it, and when someone places an order, it can be shipped according to the address.

2. Pros and cons of the Fulfillment by Amazon (FBA) model
Amazon (FBA) Fulfillment by Amazon means that the goods are delivered to Amazon’s FBA warehouse in advance, and then someone places an order and then the Amazon warehouse delivers it to the buyer.
Advantages: fast with aging. And Amazon will also have traffic support, which is much higher than FBM’s exposure. Returns and exchanges do not require the seller’s consent and are handled directly by Amazon customer service, so most people prefer FBA products.
Disadvantages: The operating cost is much higher than that of FBM, and storage fees need to be paid every month (calculated according to the product volume). If the product does not sell, you need to pay the storage fee on an ongoing basis.

What are common Amazon FBA fees?
Amazon charges all sellers 15% of the sale price of each item, regardless of the e-commerce fulfillment method.
In addition to seller fees, Amazon FBA charges two main fees: fulfillment fees and inventory storage fees.
FBA fulfillment fees include the entire picking, packing, and shipping process for each shipped order.
FBA inventory storage fees include storing your products in Amazon fulfillment centers.
Here’s exactly what each fee is and why the price of each fee varies so much.

FBA fulfillment fees
Unlike many fulfillment service pricing models that charge for picking, packing, and shipping as separate line items, FBA fulfillment fees cover every step of the fulfillment process.
Fulfillment charges depend on the product size and shipping weight of the item being shipped. There are two main categories of product sizes: standard and oversized.
Standard-sized products are those that weigh less than 20 pounds or measure less than 18x14x8 inches.
Oversized shipping includes items that are larger or heavier than those listed above.

Within these categories, there are several additional subcategories.
Both size and weight of shipping items are important because Amazon uses dimensional weight to calculate shipping costs, which takes into account the density of the shipment.
Fulfillment fees for standard-sized items range from $2.41 (under 1 lb) to over $4.71 (over 2 lbs), with an additional $0.38/lb for items over 2 lbs.
For oversized items (over 18x14x8 inches), the fee for small oversized items (over 70 lbs or 60 inches on the longest side) starts at $8.13, plus an additional $0.38/lb for the first two pounds.

On the other hand, delivery fees for special oversized items (over 150 pounds or 108 inches on the longest side) start at $137.32, with an additional $0.91 per pound for the first 90 pounds.
FBA also charges an additional $0.40 per garment delivery fee.
At the end of the day, your FBA fulfillment fees will mostly depend on what exactly you’re selling—there’s no one-size-fits-all fee here.

It’s also worth noting that while packaging is included in the FBA fulfillment fee, Amazon will pack your product in an Amazon-branded box. This means that Amazon’s branding is paramount, and it can overshadow any branded experience you intend to create with shipping. While this may not be a deal breaker, it’s worth keeping in mind.

Other FBA Fees Explained
Depending on your business needs, there may be additional charges for fulfilling Amazon orders using FBA.
Product return fee
For example, if your product is eligible for free returns through Amazon Prime, you will incur additional fees for FBA returns. (Return processing is included in the fulfillment fee for products that do not have free returns.)
Inventory clearance fee
Also, if you decide to no longer use FBA, removing your inventory from their fulfillment centers can be costly. If you choose to have Amazon remove your inventory and return it to you, they will charge a fee of $0.50 to $0.60 per item based on the item size. Amazon handles the inventory for you at a cost of $0.15 to $0.30 per item.
fine
Amazon has very strict requirements for sellers, and they also use fees to punish sellers who don’t follow the rules (here’s an article on avoiding mistakes when selling on Amazon). For example, Amazon will charge a labeling fee for sellers who do not adhere to its strict FBA inventory barcode labeling specifications. Sellers who do not prepare products in accordance with strict packaging and preparation guidelines are subject to unplanned FBA preparation fees.
Package preparation fee
Of course, you can always choose to have Amazon prepare and package your products for you—for an additional fee. Depending on your profit and order volume, this can save your business from hassle or unnecessary extra costs.
Note: This is intended as a high-level overview and is by no means comprehensive – Amazon FBA comes with some additional potential fees. See their Seller Central documentation for more information.
Long-term storage fee
Inventory stored in an Amazon fulfillment center for more than 365 days will be charged a monthly long-term storage fee of $6.90 per cubic foot or $0.15 per item, whichever is greater. Long-term storage fees are calculated using an inventory snapshot on the 15th of each month. FBA calculates inventory age based on FIFO.

Is Amazon FBA right for your business?
That’s up to you to decide. Once you’ve done the math and determined the cost, it’s up to you to figure it out.
Nor is there necessarily a right or wrong answer. For some startups, Amazon FBA can be a no-brainer, while others prefer to control the entire shipping and delivery process.
You also need to remember that the decision to use Amazon FBA is not just about numbers. You should consider other factors such as customer service, branding, and return frequency.
For example, when you ship with Amazon FBA, you lose your creativity with packaging materials. If this is an important factor for your brand and product experience, then FBA may not be the right choice for you.

Ready to master Amazon FBA?
The world of Amazon FBA is vast, exciting, and full of potential. However, this is far from simple.”

“What you need to know about FCL by sea
FCL Definition
FCL describes the ocean freight of a cargo large enough to fill a 20′ or 40′ container.
Unlike LCL – Less than Container Loads – where cargo shares container space with other cargo, FCL cargo uses the entire container. This means that the containers are loaded and sealed at the factory and unloaded when they arrive at the destination warehouse.
What does FCL stand for?
FCL stands for Full Container Load.

Advantages and Disadvantages of Shipping a FCL

has many benefits:
FCL shipments do not need to be loaded and unloaded with other shipments, saving shipping time.
Sealing containers at the factory means less handling and less chance of damage.
The unit price of LCL is high, so for larger shipments, paying the FCL flat fee can save money.
Air freight is the fastest shipping method. But if you have the time, you will save a lot by choosing FCL.

Here are some of the disadvantages of shipping a full case:
Bulk shipping means finding and paying for more inventory space.
For small loads (about 13 CBM or less), FCL can be more expensive.
Delivering a full container means you need equipment and people who can handle the job, and not every factory has it.
When you ship FCL, delivery can get more complicated because you will be dealing with large quantities in a very short period of time.

How much does it cost to ship a container?
When you ship a full container, you pay a flat fee for the entire container, no matter how many are inside.
But once your shipment gets big enough – usually around 13 CBM, depending on your shipment – it becomes well worth paying the flat fee as the cost per unit of LCL is much higher.
Here are some other factors that affect FCL prices:
a) GRI (General Rate Increase): Carriers can introduce price changes for containers at the beginning and middle of each month, usually in response to demand, Pro Tip: If a freight forwarder charges you, GRI requires consultation with the carrier to share the notice to Ensure the authenticity of charges.
b) Peak season price surcharge: When the peak season comes, companies ship in large quantities to ensure their supply is ready for the holiday shopping season. For FCL, peak season is usually between August and November.
c) Holiday delays: Shippers from China need to consider the Spring Festival (usually in February) and the Autumn Golden Week, which are week-long holidays that affect demand and prices. Wherever your origin and destination are, be sure to check your local calendar for important holidays.

Factors Affecting FCL Rates

Availability: As with all businesses operating on a supply and demand model, ocean freight rates rise and fall with the availability of container and carrier space.
Peak season prices soar: India’s seaborne demand peaks in February-March, when annual agricultural exports are on the rise. This is called peak season or peak season. Internationally, the peak shipping season is August to November before the peak holiday shopping season (Thanksgiving, Christmas).
Holiday Delays: Sea freight demand and prices tend to rise before major holidays such as Chinese New Year, Golden Week (China), Eid al-Fitr, etc.
GRI (General Rate Increase): Container rates are regularly adopted by carriers based on supply and demand. This is called GRI. It can be announced at the beginning of the month or in the middle of the month. GRIs typically occur annually in stable markets, but GRIs can occur multiple times a year or none at all.

Additional charges you must know about FCL shipping:
a) Requirements for Custom Bonds:
A customs bond is required whenever you ship to the US, so if you ship regularly, then you should opt for an annual bond. If you ship infrequently, then you might consider a single entry letter of guarantee.
b) Taxes and duties:
If businesses don’t want to be caught off guard by tariffs and taxes, they should plan ahead for them. Tariffs have changed a lot over the past few years, so you can use the import tariff calculator available online to estimate the cost of your customization.
c) Demurrage and Demurrage:
When your container arrives in the US, it can wait at the port for free, but after that, you will be charged demurrage until the container is picked up. These fees vary by country and can add up quickly. So be sure to clear customs and receive the goods in time. Empty containers also need to be returned to the port within a given time frame.
d) Port Congestion Surcharge:
If you’re sending your cargo to a popular port, you may be charged a congestion surcharge, so choose your destination port carefully.

Methods of filling and delivering FCL containers

CFS Stuffing: Popular among Indian shippers, cargo is delivered to a Container Freight Station (CFS) near the port and stuffed into empty containers. Customs inspection and cargo clearance are completed by customs agents before packing.
Live Load: The shipper has a freight company deliver an empty container to his warehouse, where he loads and seals it, while the driver waits to drive it back to the container yard. Live loads are free if completed within a specified time (usually a few hours), with an hourly surcharge thereafter.
Drop and Pack: An empty container is dropped at the shipper for a few days, after which the driver returns to bring it back to the container yard. It costs more than live loading.
Likewise, when the container arrives at the destination warehouse, on-site unloading can take place while the driver waits on site, or the driver can leave the container for a few days and return.
For FCL shipments, you can choose from door-to-door, door-to-port, port-to-door, and port-to-port services.

FCL delivery process:
There are two types of FCL shipping procedures, one is Dock stuffing, Shippers Transporter collects the goods on their trucks and hand them over to the determined container freight station, the goods are unloaded at CFS, after all formalities are completed, the goods are stuffed into the designated containers and handed over to The carrier loads the ship, in this case the potential for damage is high because there are multiple touchpoints to handle the shipper’s cargo and the shipper does not have physical access to his cargo while loading, whereas in the second case The following method, known as factory loading, cargo is loaded and sealed at the shipper’s factory or loading location. To this end, exporters should obtain the necessary permits to move empty containers from CFS and cargo to their factories and seal them under the supervision of customs officials.

Final FCL List
You can now book the complete container. But before that, a few final tips:
Book early to get the best price
Weigh your cargo accurately so you know the containers and equipment you need for ocean and inland transportation
Consider the possibility of your cargo tipping over. This can happen due to negligence on the part of the carrier (overbooking, skipping ports) or the shipper (paperwork, non-compliance issues). You can’t control the former, but you can avoid mistakes by booking ahead, skipping peak seasons whenever possible, working with a trusted freight forwarder, avoiding forwarding, and most importantly, delivering your shipments on time. Rollovers may incur additional charges.
Pack your goods safely. Think of all the jostling it will endure in transit. Learn the proper way to pack products into containers.”

“What you need to know about air waybills
What is an air waybill?
An air waybill is a receipt document issued by an airline or its authorised agent. It indicates that there is a contract of carriage between the airline and the sender of the goods for the transport of the goods from the place of origin (the sender’s airport) to the consignee’s airport or designated place. An air waybill is a straightforward, non-negotiable document containing 11 digits with a detailed description of the goods. Other important information included on the waybill is the sender’s name and address, the location and address of the goods, the type, quantity and weight of the goods, the place of loading, the date of loading, the cost of transportation, the date of payment at the place and the declared value of the goods.

The function of the air waybill

Air waybill has many functions, including:
Evidence that the airline received the cargo
Contact information of all parties
contract of carriage between shipper and carrier
freight bill
customs declaration
product description
Guidelines for Handling and Delivering Goods
cargo tracking

Second, the classification of air waybill

Air waybill is mainly divided into two categories:

(1) Master Air Waybill (MAWB, Master Air Waybill) Any air waybill issued by an air transport company is called a master waybill.

It is the basis for the air transport company to handle the transportation and delivery of goods, and it is the transportation contract concluded between the airline and the shipper. Each batch of air transported goods has its own corresponding air waybill.

(2) Air waybill (HAWB, House Air Waybill) The air waybill issued by the centralized shipper when handling the centralized consignment business is called the air waybill.

In the case of centralized consignment, in addition to the main air waybill issued by the air transport company, the centralized shipper should also issue an air waybill. The relationship between the parties at this time is shown in the figure.

In the middle, the air waybill is used as the cargo transportation contract between the centralized shipper and the shipper, and the two parties to the contract are cargo A, B and the centralized shipper respectively; and the air master waybill is used as the cargo between the air transport company and the centralized shipper. In the contract of carriage, the parties are the centralized shipper and the air transport company. The cargo owner has no direct contractual relationship with the air carrier.

Not only that, because the goods are delivered by the centralized shipper to the air transportation company at the place of departure, and the goods are picked up by the centralized shipper or its agent from the air transportation company at the destination, and then handed over to the consignee, so the owner and the air transportation company There is also no direct cargo handover relationship.

3. Contents of Air Waybill Similar to ocean bill of lading, air waybill also has front and back clauses. Different airlines will also have their own unique air waybill format.

The difference is that the ocean bills of lading of shipping companies may be very different, but most of the air waybills used by airlines are based on the standard format recommended by IATA, and the difference is not big. So we only introduce this standard format here, also known as the neutral waybill. The fields to be filled in are described below:

1. Departure station airport: You need to fill in the three-character code of the departure station airport or city uniformly formulated by IATA. This column should be consistent with column 11.

1A: The airline code uniformly compiled by IATA, such as my country’s international airline code is 999; 1B: waybill number.

2. Shipper|s Name and Address: Fill in the shipper’s name, address, country and contact information.

3. Shipper account number: fill in only when necessary.

4. Consignee|s Name and Address: The name, address, country and contact information of the consignee should be filled in. Unlike ocean bills of lading, because air waybills are not negotiable, words such as “”by instructions”” must not appear.

5. Consignee account number: same as column 3, fill in only when necessary.

6. The name and city of the carrier’s agent (Issuing Carrier|s AgentName and City).

7. The IATA code of the agent.

8. Agent account number.

9. Departure station Airport and requested route (Airport of Departure and Requested routing): The departure station here should be the same as that filled in column 1.

10. Payment Information (Accounting Information): This column is only filled in when a special payment method is used.

11A (C, E). To (To): Fill in the IATA code of the first (second, third) transfer station airport respectively.

11B (D, F). Carrier (By): fill in the carrier of the first (two, three) paragraphs respectively.

12. Currency: Fill in the ISO currency code.

13. Charge code: indicate the payment method.

14. Freight and declared value charge (WT/VAL, weight charge/valuation charge): There are two cases at this time: prepaid (PPD, Prepaid) or collect (COLL collect). If prepaid, fill in “”*”” in 14A, otherwise fill in 14 days. It should be noted that the payment method of freight and declared value fee in air cargo transportation must be consistent and cannot be paid separately.

15. Other: There are also two payment methods: prepayment and cash on delivery.

16. Declared Value for Carriage: Fill in the declared value for shipping required by the shipper in this column. If the shipper does not require a declared value, fill in “”NVD(No value declared)””.

17. Declared Value for Customs: The consignor fills in the declared value for customs here, or fills in “”NCV (No customs valuation)””, indicating that there is no declared value.

18. Airport of Destination: Fill in the full name of the final destination airport.

19. Flight/Date: Fill in the flight and date of the cargo.

20. Amount of Insurance: Fill in only when the airline provides insurance services and the customer also needs it.

21. Handling Information: generally fill in the notices about the handling of the goods by the carrier, such as “”Shipper|s certification for live animals”” and so on.

22A–22L freight price, freight details.

22A. No. of Pieces RCP, Rate Combination Point: Fill in the number of packages of goods. Such as 10 packs, fill in “”10″”. When it is necessary to form the proportion of the freight rate or add the freight rate in stages, fill in the IATA code of the airport of the freight rate composition point in this column.

22B. Gross Weight: Enter the total gross weight of the goods.

22C. Weight unit: choose kilograms (kg) or pounds (lb).

22D. Rate Class: There are 6 codes for different air freight rates, they are M (Minimum, minimum freight), C (Specific Commodity Rates, special freight rate), S (Surcharge, higher than ordinary goods) The freight rate is the freight rate of grade goods), R (Reduced, the freight rate of grade goods lower than the freight rate of ordinary goods), N (Normal, the freight rate of ordinary goods applicable to goods under 45 kg), Q (Quantity, the freight of goods over 45 kg) applicable general cargo rates).

22E. Commodity Item No.: When using special tariffs, you need to fill in the commodity code in this column.

22F. Chargeable Weight: In this column, fill in the chargeable weight based on which the airline calculates the freight. The weight can be the same or different from the gross weight of the goods.

Electronic Air Waybill
The electronic air waybill (e-air waybill or e-AWB) was introduced in 2010 and became the default contract of carriage for all air cargo on January 1, 2019. Paper air waybill documents are still accepted. The electronic version requires and conveys the same information as the paper version.
Freight shipments require a fair amount of paper for each shipment, which means that paper has to be tracked and dispatched. Storing documents electronically keeps things safe and organized and reduces the need for paper.”

“What you need to know about shipping dangerous goods

On August 4, 2021, a series of explosions occurred in the port of Beirut, Lebanon, killing 200 people, injuring 5,000, and destroying much of the city. The explosion was traced to 2,750 tonnes of ammonium nitrate stored unsafely in a warehouse. The UN Recommendations on the Transport of Dangerous Goods classify ammonium nitrate as an oxidizing agent and therefore dangerous. In India, it is classified as an explosive under the Explosives Act 1884.

This disaster, and others like it, are a stark reminder of the importance of safety in the transportation and storage of dangerous goods. This is why the transport of dangerous goods is highly specialized and regulated. In this blog, we take a deep dive into dangerous goods and what it’s all about transporting it.
what is dangerous goods
It is very important to know what dangerous goods are before shipping, Dangerous goods are also called hazardous material, hazmat and hazardous cargo. Dangerous goods can exist in solid, liquid and gaseous forms. They can be colorless or colored, hot or cold, odorless or pungent. They can be caustic chemicals, explosives, batteries, and even everyday items like hairspray, perfume, aftershave, alcohol and lighters.

What is a dangerous goods category
The UN Committee of Experts has issued recommendations on the transport of dangerous goods. These recommendations are adopted by regulators responsible for different modes of transport.
In order to ensure safe transportation, it is essential to fully understand the characteristics of dangerous goods. Commodities classified as Dangerous Goods contain hazardous substances that may harm humans, living organisms and the environment in various ways. All hazardous materials are marked with a unique UN number. The regulation is based on a classification system that classifies substances or articles into one of nine categories based on the nature of the hazard. Category 1 is the most dangerous and Category 9 is the least dangerous. Dangerous goods categories are as follows:

Class 1 – Explosives
Class 2 – Gases
Class 3 – Flammable Liquids
Class 4 – Flammable solids; substances liable to spontaneous combustion; substances which, in contact with water, emit flammable gases
Class 5 – Oxidizing Substances and Organic Peroxides
Class 6 – Toxic and Infectious Substances
CLASS 7 – RADIOACTIVE MATERIALS
Class 8 – Corrosives
Class 9 – Miscellaneous Hazardous Substances and Articles, Including Environmentally Hazardous Substances

In addition to the category, dangerous goods are assigned a UN number, a proper shipping name (PSN) and a packing group used as an identifier.
UN Number: This is a four-digit code starting with the letters UN. UN numbers can be assigned to a single substance (acetone, UN 1090) or to a group of substances (adhesive, UN 1133; alcohol, UN 1987).
PSN: This is the name that most accurately describes the item, capitalized. For example, the PSN for a lighter or lighter refill is LIGHTERS or LIGHTER REFILLS.

Packing Groups: The United Nations has three packing groups for dangerous goods – I (high risk), II (moderate risk) and III (low risk). This identifier helps determine the level of protective packaging required. Packing groups are denoted by the letters X, Y and Z, where X stands for packing groups I, II and III, Y for packing groups II and III, and Z for packing group III only. For example, dangerous goods of class 1 (explosives) are assigned to packing group II.

Dangerous Goods Shipping Requirements
1. Correctly classify the goods.
It is important to prevent incompatible classes of hazardous materials from coming into contact with each other, as they may have a highly dangerous reaction, such as an explosion or release of toxic vapors. Many categories of goods need to be stored in separate containers, and some chemicals or hazardous substances need to be transported in completely separate vehicles. Transport dividers can be used to separate dangerous goods in transit.

More information can be found in our hazmat isolation guide, which includes a simple hazmat isolation diagram. We recommend printing it out, so isolation is a top priority for the entire Hazmat team.
2. Pay attention to the storage temperature.
Certain items, such as peroxides, need to be kept below a certain temperature to prevent any reaction from occurring.
Always know the temperature at which your materials need to be stored and control shipping conditions accordingly. Learn more about temperature control in Safe Work Australia’s Hazardous Materials Safety Data Sheets.
3. Know your flash point.
Likewise, it’s important to store flammable items below their flash point – to prevent explosions and fires. Flash point is the lowest temperature at which a flammable liquid vapor ignites.
Different liquids have different flash points, some below 0 degrees Celsius. Make sure everyone on the team understands the flashpoints of dangerous goods before shipping them.
4. Have the correct shipping documents.
In the case of dangerous goods shipments, regulatory agencies can request documentation at any time. It is crucial to have shipping documents on hand, providing all required information about the cargo carried in the vehicle.
Shipping documents must have the name and phone number of the shipper and a description of the dangerous goods that need to meet specific guidelines. These vary by state, so please contact your local authority for the latest information.
Also, some states have embargoed areas where hazardous goods cannot be shipped, so keep this in mind when planning your shipping routes.
5. Properly label items.
In most states in Australia, all hazardous chemicals must be labelled in accordance with the Global Harmonisation System (GHS) requirements outlined by the United Nations. These include primary and secondary containers used in shipping, so all of your storage units must meet GHS labeling requirements.
6. Uninstall carefully.
When unloading dangerous goods, please strictly follow the safety regulations. Make sure to clear any obstructions and minimize traffic (vehicles and people) in the area. If you are carrying hazardous materials up and down stairs, check that you have installed adequate stair safety products, such as concrete stair treads.

Some of the important and common documents used in the transport of dangerous goods include:
Material Safety Data Sheet: In addition to basic information, it contains physical and chemical properties of the cargo (melting/boiling point), reactivity, toxicity, effects on human health, first aid and fire fighting guidelines, protective equipment requirements. It is provided by the manufacturer/supplier of the goods to the shipper, who submits it to the carrier.
Dangerous Goods (DG) Request: When a shipper approaches a carrier with a dangerous goods cargo, they submit a Dangerous Goods Request or Dangerous Goods Request.
Dangerous Goods (DG) Declaration: Also prepared by the shipper, similar to a DG request, but more detailed. Carriers accept dangerous goods shipments based on a dangerous goods request and a dangerous goods declaration, both of which must have matching information. Dangerous goods declarations are called shipper declarations in air transport. In multimodal transport, a multimodal transport declaration can be used to expedite the movement of goods between modes of transport.
Dangerous Goods Manifest: Prepared by the Master to contain all relevant cargo-related information in one document. It is kept on the bridge and a copy is kept in the cargo control room for easy access. The Hazardous Goods List is also a stowage plan as it identifies the location of the cargo on board to ensure a prompt emergency response.
Transport Emergency (TREM) Card: A document carried by the driver of a vehicle transporting dangerous goods that contains relevant cargo information and instructions to the driver and emergency responders.
Container Packing Certificate: When shipping dangerous goods by sea in containers, the loading company must provide the carrier with a signed and dated certificate confirming compliance with the IMDG Code and other relevant regulations.

Special handling required to minimize risk and damage
Dangerous goods have special shipping requirements to eliminate or minimize risk. All dangerous goods need to be properly packaged and labelled, they need to be properly stored, loaded and stored, and they need special handling throughout the transport chain. Additionally, everyone who handles hazardous materials requires special training. Everyone in the hazardous material transport chain must fully understand the risks and actions required to minimize potential damage and accidents. They need to know how to handle such shipments, how to react and what to do if something goes wrong.
These types of cargo have different requirements, such as chemicals that become dangerous when wet need to be transported in dry conditions, and cargo that needs to be kept cold should not be heated. Some shipments are not allowed to be stored together in the same container and must therefore be properly segregated. In the event of an accident, these cargoes could interact with serious consequences. Container locations on ships must also be regulated and must be kept at an appropriate distance from other dangerous goods. These measures are as important on ships as they are in warehouses, loading docks and ports.

The Importance of Training When Handling Hazardous Materials
From stevedores, packers and equipment operators to transporters and workers responsible for documentation, dangerous goods pose a threat to countless lives. Awareness and training are key to their safety.
All of these people must be properly trained, not just for their specific function
They must be aware of regulations related to cargo, ports, destination countries, documentation and reporting
Training provisions are contained in the IATA DGR, IMDG Rules, ADRs, RIDs and ADNs. Training can take place in-house or through online courses and workshops
There are five types of training – general awareness, specific functions, safety, security and driver training

Liability of different carriers
The safe transportation of dangerous goods requires the full attention of every worker in the logistics chain. However, the greatest responsibility lies with the shipper and the carrier.

Shipper’s Liability
Assign correct class, PSN, hazard data to cargo
Pack the goods properly, secure them in pallets (if required) and load them into containers
Make sure others (packers, container stuffers) follow the rules and regulations
Prepare and submit accurate and complete paperwork
Inform the carrier about stowage precautions, especially for cargoes that would react with other cargoes if put together
Carrier Liability
Check if the goods are allowed to be transported according to the rules
Make sure that the documents, certificates submitted by the shipper are in order
Physical inspection of labels, signs, markings for accuracy
Check the packaging for leaks and other damage
Prepare a list of dangerous goods and ensure that the goods are kept as far away from the accommodation area as possible
Ensure all crew are instructed on emergency procedures
Notify the port of discharge authority
If required, report the shipment to the appropriate reporting agency”

“Understand the importance of ocean surcharges
When bidding for transportation, what you want to do is to move the goods from A to B at the best possible speed and to a satisfactory level of service. Simple, right?
Although in theory, you’re just buying transportation from A to B – that transportation can be billed very differently.

Ocean carriers, experts at eroding freight in a never-ending race to the abyss, are banking on getting some dollars back with a slew of surcharges and surcharges, some more justified than others. In the end, it may be nearly impossible to decipher the total cost, let alone check the invoice.
So, to help you understand how much you’ll pay, here’s a list of some of the most common add-ons and surcharges you’re likely to encounter. But beware – these are just examples. There are many other, more obscure questions that can appear on your freight bid forms and invoices.

(1) Fuel surcharge (BUNKER SURCHARGE OR BUNKER ADJUSTMENT FACTOR–B.A.F.): It is charged when the fuel price suddenly rises.

(2) Currency depreciation surcharge (DEVALUATION SURCHARGE OR CURRENCY ADJUSTMENT FACTOR–C.A.F.): In the event of currency devaluation, the ship party will not reduce the actual income, and will add a surcharge based on a certain percentage of the basic freight rate.

(3) TRANSHIPMENT SURCHARGE: Any goods that are transported to non-basic ports need to be transshipped to the destination port. The surcharge charged by the ship includes the transshipment fee and the second-way freight.

(4) DIRECT ADDITIONAL: When the cargo to a non-basic port reaches a certain amount, the shipping company can arrange for a direct voyage to the port without transshipment.

(5) HEAVY LIFT ADDITIONAL, LONG LENGTH ADDITIONAL and SURCHARGE OF BULKY CARGO. A surcharge imposed when the gross weight or length or volume of a shipment exceeds or reaches the value specified in this tariff.

(6) Port surcharge (PORT ADDITIONAL OR PORT SUECHARGE): In some ports, due to poor equipment conditions or low loading and unloading efficiency, as well as other reasons, the shipping company imposes surcharges.

(7) Port congestion surcharge (PORT CONGESTION SURCHARGE): a surcharge imposed by some ports due to congestion and increased berthing time of ships.

(8) OPTIONAL SURCHARGE: The cargo party cannot determine the specific port of unloading at the time of consignment, and it is required to choose one port to unload the cargo in the two or more ports proposed in advance, and the ship party will charge an additional surcharge.

(9) ALTERNATIONAL OF DESTINATION CHARGE: A surcharge charged when the owner requests to change the port originally specified for the goods, with the permission of the relevant authorities (such as customs) and the ship’s consent.

(10) DEVIATION SURCHARGE: A surcharge imposed by the ship when the ship must make a detour to transport the goods to the destination port due to the obstruction of the normal waterway.

(11) Piracy Surcharge – Fees that apply to certain routes where precautions must be taken to avoid piracy.
Other different types of charges

Origin document fee
This is what the carrier charges when you ship your cargo to or from Singapore to balance the cost of various factors in terms of documentation (i.e. staffing, equipment and system databases). If shipping instructions are not given to the ocean carrier on time, a document of origin fee will appear on the bill of lading.
Even if an SI has been sent, ODF fees apply when a request to cancel a booking is made after the stated period, making timely transmission of data to the carrier crucial in this regard.

security fee
The International Ship and Port Facility Safety Specification (ISPS) is essentially a set of policies and protocols designed to enhance maritime security and the safety of ships, terminals and ports. This is a measure implemented and closely monitored by the Maritime and Port Authority of Singapore.
Carriers that comply with ISPS typically charge customers this fee for handling the shipment and the personnel and equipment required to keep the shipment safe. This fee applies to all cargo per cargo container.

Departure station fee

Shipping lines charge this fee to cover the handling of the container, which will then be handled through any and all port terminals as defined by established policies and agreements.
Shipping lines then proceed to pay this surcharge to terminal operators. Just as charges for arrival at ports vary, these charges may vary by country.
This is why it is important that when cargo is delivered or picked up at a container terminal, the parties involved in the transaction and shipment determine who will pay all or part of the terminal charges.

Manifest surcharge
Each shipping company must provide the correct destination customs authority with carrier-based shipment information in advance to verify the size and type of the relevant cargo.
This cost is then added to comply with existing regulations. More shipping companies will then continue to increase this fee based on these different requirements in different countries.

Chassis charging
Many ocean liners may no longer offer dedicated undercarriage services for cargo containers, either for import or export. This is a trailer company (companies responsible for transporting bulk cargo over short distances by land, either by sea or by air) chartered by logistics services.

in conclusion
While many customers, shipping lines and even freight forwarding services are aware of base rates and shipping costs, many are often unaware of surcharge increases.
The same can be said for air freight. The only difference with air freight is that the goods involved tend to be smaller, lighter, more fragile types, and even certain types or have a relatively short shelf life, which makes bookings more expensive for logistics companies.
When booking shipments through a freight forwarder, be sure to consult your chosen representative about possible surcharges and your given budget. This way, you’ll have the expertise you need about shipping prices and fees, which you can then use to your advantage.”

“The gap between sea and air freight rates is narrowing, and the market environment is more cautious
The cost of shipping goods around the world by air is about 2.5 times higher than it was before the pandemic. On major trade routes with particularly high demand, such as China and Southeast Asia to the United States, freight rates are five or six times the normal level during peak shipping seasons.
So how did air freight become relatively cheap when ocean freight was cheaper?
According to the Freightos Air Index, air freight from China to the U.S. West Coast was about $14 a kilogram in the first week of November, double what it was a year ago. Air freight to the East Coast costs about $13, double what it was in 2020.

We all know why now. Passenger planes, which are the source of more than half of the world’s air cargo capacity, stopped flying when COVID began to spread and restrict travel. The reduction in border restrictions this year has boosted demand and helped airlines begin to recover, but international air capacity remains around 70% below pre-crisis levels.
Meanwhile, demand, especially in North America, is at record levels as federal benefits and higher savings rates give people more disposable income, who disproportionately spend on goods rather than services , while manufacturing is experiencing chaos and labor shortages. Inventory has not kept up.
Airfreight is usually a last resort, limited to perishable and high-value goods, the profits of which can pay for extra. Incredibly, for many companies, air freight has become a bargain relative to ocean freight, especially when measuring the cost of out-of-stocks and lost sales.
This happens when supply chains are turned upside down by ongoing chaos.

At present, all-cargo aircraft are the main cargo force in the aviation market. On December 15 last year, the Civil Aviation Administration of China revised and re-issued the Operational Safety Circular “”Cargo Transport in Passenger Cabin (Second Edition)””, prohibiting “”passenger-to-cargo”” on January 1, 2022. The cargo compartment can carry cargo, but the passenger compartment has The new restrictions will limit the expansion of air capacity in Asia. According to data from the Civil Aviation Administration, as of the end of 2020, domestic airlines had 186 cargo aircraft, accounting for 4.8% of the transport fleet.
Although most of the air freight orders of most freight forwarding companies are transported by all-cargo aircraft, there have been few cargo flights recently and the space is tight. Passenger-to-cargo aircraft are not allowed to change the cabin structure, and many cardboard boxes that can be placed in the passenger compartment of the removed seat need to find another cabin.
It is worth noting that the high freight rates of shipping containers and the situation of port congestion have weakened the low-cost advantage of shipping, which is also the reason for the large increase in the volume of this wave of sea-to-empty cargo. According to the estimates of the International Air Transport Association (IATA) and industry experts, the air freight rate before the epidemic was about 13 to 15 times that of sea freight. Now air freight is only about 3 to 5 times higher than that of sea freight. within the acceptable range.

Freight costs to remain at 2021 levels
DHL recently released an air cargo report, which predicts that 2022 will be a higher year for freight costs. Demand remains strong, with GDP expected to grow by 4% in 2022.
On the other hand, as vaccinations increase, belly space will increase, but it will still be 28% lower than pre-coronavirus levels.
With the advent of the Omicron variant and the cancellation of flights, belly recovery has been affected, the report said. Air freight rates rose 126% in November 2021 compared to the 2019 baseline. The rate is expected to remain high in 2022 compared to the previous year.

High shipping costs make the market more cautious
Released by the Hong Kong Productivity Council (HKPC), the Hong Kong Airline Trade Leading Index (DTI) has declined slightly recently after reaching a high of 3.5 in the fourth quarter of 2021.
The latest survey marks the first time since the pandemic that the proportion of Hong Kong air traders has reached the same level, with the fourth quarter of 2021 seeing the largest percentage increase in Hong Kong air trader earnings.

This decline in the first quarter of 2022 is reflected in the outlook for air traders, with the impact of the new wave of the virus on their business as their top concern, followed by high transport costs.
All indices declined slightly in the first quarter of 2022 as the pandemic recovers globally, high fuel costs and supply chain disruptions to transport networks continue, suggesting aviation traders are becoming more cautious about the business environment this year.
The impact on the Hong Kong market and business is greater due to recent signs of re-emergence of Covid-19 variants. Hong Kong companies have experienced business disruptions related to the lingering epidemic, and most of them are now maintaining their business through e-commerce and digital technology.

In the first quarter of 2022, the top issue affecting the business of Hong Kong air traders was the new wave of Covid-19 outbreak (39%), followed by high freight rates (26%) and consumer demand (16%).
Freight costs are not expected to decline in 2022, with short-term rates for air and ocean freight rising slightly and long-term rates likely to remain at 2021 levels.
The new crown epidemic has severely disrupted global supply chains, slowing the flow of raw materials, components and consumer goods, coupled with labor shortages and port congestion, sea and air transport capacity shortages have caused global shipping costs to rise slightly.”