Every freight forwarder and shipper tries to negotiate the best container rates when it comes to total shipment costs. Ocean freight costs UAE are a major component of total shipment costs. Preparation is the key to a successful carrier rate negotiation – understanding your own shipping requirements, monitoring market conditions, and leveraging this knowledge when negotiating rates with carriers.
Understanding freight costs, reducing ocean freight spend, and realizing better margins are three significant challenges for shippers and freight forwarders. Dynamics and trends in the market play an important role in determining transportation costs, your business can also use visibility data to forecast fluctuations and trends in the market.
The visibility of ocean freight is of the highest significance in the current scenario. Having accurate information about ocean freight allows shippers to determine where they are spending too much and how they can reduce those expenses. In times of disruption, supply chain visibility is crucial to maintaining clarity and agility. Risk management in the supply chain must be transparent in order to handle risks.
Visibility of ocean freight means knowing exactly where your freight is at any given point in time in the supply chain. With marine logistics execution visibility, businesses have the ability to make better decisions, cut costs, reduce freight expenditures, and respond more effectively to disruptions. In addition to improving delivery production efficiency, accurate visibility enhances customer service and the customer experience. If you required any IOR service, then SAG Logistic is a one-stop solution for all your IOR needs.
Here Know The Few Tips For Lowering Ocean Freight Costs UAE:
1. Know The Market, Your Business, and Sale Terms
Be aware of the market you play in and avoid paying vendors more than the market rate. Make use of freight cost benchmarking techniques, such as asking different forwarders for quotes so you can see what they are charging and then decide what you can afford. You can manage your business’s production time more effectively before the peak season if you know the freight rates and trends. It can also be used to optimize shipping rates when they are lower, thereby reducing shipping costs.
2. Plan Carefully Not Everything Is Urgent
Ensure that you know exactly what is required. Know the scope of the business, the frequency of shipments, and the quantities that have been agreed upon. Take this information into consideration when planning your approach. Carriers often give the best quotes to customers who have a clear understanding of what they want and can forecast this clearly through careful planning. Customers appreciate this because it demonstrates competency and credibility.
3. Opt Right Mode Of Cargo
Is it a full container FCL, LCL, or groupage? Make sure you are using the right mode of shipping for your cargo. A LCL or groupage shipment involves multiple charges compared to a full container shipment, so determine if it’s necessary. Similarly, determine whether FCL can be optimized to save costs. You lower overall costs by matching the right cargo to the right container.
4. Select Best Route And Packing For Your Cargo
Reduce your freight costs by optimizing your routes. In terms of cost savings, the cheapest quote isn’t always the best. Be sure to compare the routes each carrier takes and choose the carrier that will deliver your cargo for the best price.
Similarly, pack your cargo into containers with care. Consider using the right size packaging materials. Reduce the amount of empty/wasted space by using the right size packing materials.
5. Be prepared
Taking the time to plan, prepare, and implement your tender management process can dramatically impact your freight costs if your procurement is based on a tender. It is important to keep in mind that effective preparation happens both on land and at sea, and both can pay off in cost management.
Triangulation is another option that carriers favor, and they may offer special deals to customers who can do so. When triangulation is used, a container is used for export and import purposes at the same time, meaning you export from A to B, and then import from B to A using the same container and the same carrier.
7. Better Communicate With Your Carriers
Communication is key to any business arrangement. Having open, clear communication with your carriers can go a long way in avoiding any mishaps that may arise as a result of miscommunication, which could prove to be expensive later on. Be sure to keep everyone updated.
8. Audit Your Quotations And Invoices
Ensure you audit your quotations and invoices thoroughly. Ocean invoices contain more than 25% errors, and these are costly! Carriers often fail to add shipping surcharges and ask for payment at a later stage. Cost planning and negotiation may be affected, and the customer may not agree to pay for additional charges, so you’ll have to cover them.If you required any IOR service, then SAG Logistic is a one-stop solution for all your IOR needs.
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