Shipping charges are an important factor for businesses that participate in foreign trade. Whether one is dealing with imports or exports, shipping charges will always cut into profits, and knowing such costs can contribute towards cost effectiveness in business activities. For Australian businesses, the issue of competition in international shipping is more difficult owing to the country’s geographical remoteness.
Thus, the purpose of this article is to explain the elements that influence shipping prices and suggest ways to help cope with such expenses. Destination charges explained are arguably one of factors that make up shipping costs which differ based on the delivery address and aid the process of delivery.
Key Factors Influencing Shipping Charges
Shipping charges are not standard rates as such. One can expect to pay different shipping charges owing to several factors which can include but are not limited to the types of goods being shipped, the location of the shipment, the means of shipment, additional charges and others.
1. Distance and Destination
The shipping costs are greatly affected by the distance or the origin and the intended location. One of the major reasons why Australia tends to have a slightly more expensive shipping cost is due to its developed geography.
It is quite clear that as the distance increases the cost also increases especially when considering long distance routes. This means that there is a need for Australian traders to select their carriers with great care and bargain for good rates with the selected carriers.
2. Weight and Volume
The other characteristics of your shipment that will be of concern are the weight and the volume of your shipment. Most freight companies use the volumetric weight metric when calculating their shipping charges which takes into account both the size, amount of the cargo and the weight.
In cases where there are heavier or larger items, they are usually more expensive to ship and therefore it is wise to weigh and measure the size of your shipment so as not to incur unexpected costs.
3. Means of Transport
The mode of transport had also been taken into consideration as a factor influencing shipping charges as air, sea, or land. Air freight is mostly the quickest mode of transport and also most costly. Sea freight on the gun but it is more reliable for huge shipments but sea freight has its drawbacks as it takes a considerable amount of time.
Australian enterprises ought to assess the trade-off between time and cost and their expectations in terms of speed for the Australian market. Worldwide Customs & Forwarding can help find the optimal shipping method that meets the objectives.
4. Customs and Offsetting Duties
Customs duties and taxes are also aspects which can increase shipping charges. Every country has rules pertaining to imports and export regulations including Australia.
It is important to have knowledge of both Australian customs as well as the destination country to circumvent inconveniences and additional expenses or delays. Careful to operate with a proper shipping company such as Worldwide Customs & Forwarding and be able to observe international customs regulations and avoid penalties or delays otherwise.
5. Fuel Surcharges
Prices for fuel are constantly changing and shipping companies commonly add these costs to the charges given to customers as fuel surcharges. Depending on the mode of transport and various factors, these surcharges vary. It would be advisable for customers to keep an eye on the fuel surcharges included in their shipping costs and the current fuel prices to be able to estimate their budgets more efficiently.
Ways To Lower The Cost Of Shipping
We have already explained the level of factors that determine shipping costs. Below is a guide Australian businesses can follow to cut down on the shipping costs.
1. Package Appropriately
By properly packing your shipment, its volume and weight can be decreased thus lowering shipping costs. Do not use a lot of packaging materials when enough will do. There are even companies that specialize in packaging optimization and ensure maximum volumetric efficiency for your shipments.
2. Combine Packages
If you are in the business of shipping goods permanently, it may be cost effective to combine orders and ship them once. The flow of traffic for bulk commodities is known to reduce prices in companies. Several orders can be combined and make use of these tariffs. However, do not forget the limitation of space and time so that it is for the good of the business.
3. Negotiate with the Shipping Carriers
Some businesses assume that negotiating shipping rates is unnecessary, but this should not be the case especially if the business is shipping frequently or in bulk quantity. When it comes to shipping carriers, do not hesitate to ask about better deals. This is especially the case if working together with a logistics company since they have a number of carriers and may help try to get better deals for you.
4. Preparing Yourself in Advance
You can further reduce your shipping costs by designing your shipments in advance. Delays can be avoided and more cost effective alternatives such as sea freight can be employed instead of costly express shipments. In addition, planning allows you to utilize special offers provided by some shipping companies during certain seasons or promotional periods.
5. Making Use of Technology Tools
A number of modern shipping companies today provide tracking and analytics data into their systems which can be used to manage shipping costs and improve other areas of their operations. You can also use these tools to keep an eye on your shipments and understand your shipping cost trends. With this knowledge, you can make better decisions about your shipping methods and discover ways to save money.
Conclusion
For Australian exporters, the knowledge of and the ability to manage freight charges is very essential. Different costs may apply depending on distance, weight, method of transportation, and duties. Nonetheless, through proper planning such as effective packaging, shipment consolidation, carrier negotiation, and shipment planning, companies can tackle these costs and enhance their margins.
If you are an Australian firm wishing to avoid hassle in your shipping processes, you need to work closely with such a partner as Worldwide Customs and Forwarding. They will give you a peace of mind with their know-how about international logistics and custom processes so that you do not miss deadlines and overshoot budgets.
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