Container shipping costs can be highly volatile, based on geopolitical and economic conditions globally. Costs can easily and unexpectedly creep upwards, eroding your profit. Shippers, especially small to mid-sized businesses (SMBs), need to use every tool at their disposal to cut ocean shipping expenses. These sea freight costs are a logical place to start when you consider that 90% of the world’s goods move via container shipping. This article reviews some practical ways to cut costs and avoid overpaying for ocean freight.

Leverage a Forwarder’s Volume Discounts for Better Rates

Major companies ship thousands and thousands of containers annually and enjoy significant volume discounts from carriers. As an SMB, your shipping rates will never approach those of the mass retailers. But by partnering with the right NVOCC partner, you can take advantage of their negotiating power with carriers to save as much as 10%-15% on container shipping costs. They negotiate based on their aggregate freight spend across all their customers. If you’re one of those customers, you can benefit. Look for a forwarder that manages a large volume of freight in your key lanes. For instance, I.C.E. Transport manages large volumes of freight movements to and from Poland and Eastern and Western Europe.

Use LCL vs. FCL Container Loads

Depending on the volume of your cargo, it might be cost-effective to use less-than-container load shipping (LCL) vs. full container load shipping. This switch can take as much as 60% off the cost. That’s because, with LCL, you’re sharing the cost of a full container with many other shippers and only paying for the space in the container that your lower-volume shipment requires.

In FCL, you pay for the entire container, regardless of whether you fill it partially or completely. LCL rates are higher on a cost per cubic meter or kilogram basis. A rough rule of thumb: if your cargo takes up more than half of a container, it’s generally more advantageous to go with FCL; but if it’s less, LCL can be the more cost-efficient option. Added bonus with LCL: You ship smaller amounts of cargo more often, creating a more efficient supply chain with less inventory.

Maximize the Weight of Container Loads

Steamship lines often recommend that you keep container weights to a max of 44,000 pounds to stay within the 80,000-pound US DOT weight limit for big rig plus cargo. The actual limit on ocean container weight is the maximum gross cargo weight listed on the container door – typically 10,000 pounds or more beyond 44,000 pounds. 

So, if you’re shipping heavyweight items, going with more weight per container lets you ship 20%–25% fewer containers, and avoid those costs. You will pay more for the specialized trucking services required for these non-standard, drayage hauls. But that added cost is more than offset by reductions in your ocean freight spend. A freight forwarder with these types of carriers in its network can prove invaluable here. These truckers have specialized equipment and the required permits in place with transportation authorities to haul the heavier loads.

Remember, steamship lines are not incentivized to have you optimize your container load weight. Don’t let their recommendation deter you from economizing by creating greater cargo density and shipping fewer containers.

Benchmark Container Shipping Costs

Benchmarking is a valuable way to gauge performance and costs against a comparable set of peers or competitors. In ocean container shipping, benchmarking involves evaluating rates across carriers and providers, based on service levels offered, trade lanes and other criteria. This information can give you valuable leverage in carrier contract negotiations. 

Collect industry data from trade publications, publicly available indices, market reports and carriers on both 20-foot and 40-foot containers. Next, compare rates for the same trade lanes and routes and types of service. Weigh other factors such as fuel surcharges, transit times, vessel capacity, service reliability, and carrier or service provider reputation.

While a benchmarking exercise can help you book smarter, it can prove difficult and time-consuming. This is where a trusted freight forwarder with experience in benchmarking and carrier relations can give you a needed assist, saving you on container shipping costs in the process.

Optimize Container Loading

Learn to maximize the cube of your container. The last thing you want to do is be charged for shipping air. Consider using load planning software, or partner with a freight forwarder that has it. Such software helps to optimize loading and weight distribution based on the dimensions and weight entered.

Know when it makes sense to use a 20-foot vs. a 40-foot container. Another option is using a high-cube container that allows higher pallet stacking. This can make sense with lower-weight, denser items that quickly cube out well before reaching the weight limit.

If you’re shipping large pieces of equipment or machinery, it could make economic sense to disassemble them for container shipping since a standard closed container will always be less expensive than open top or flat rack shipping containers or a roll on/roll off (RoRo) service. For example, paying the labor to remove the wheels on a backhoe and re-assemble the equipment at destination will typically cost less than the money saved by shipping in a standard closed container. A knowledgeable freight forwarder/NVOCC can provide expert advice on these types of decisions. 

Be Flexible on Scheduling

Another way to reduce container shipping costs is to be flexible on your ship time requirements, as slower shipping often comes with lower rates. As you know from air travel, prices can vary greatly based on the day, week or season. The same is true of shipping lines.

Shipping when demand is lower results in cost savings as carriers offer more competitive rates in order to fill their vessels and better utilize capacity to avoid empty or partial sailings. Shippers with flexible sailing times will also benefit from shorter wait times at port and faster overall transit, reducing costs related to delays.

Choose a Single-Source Provider 

Consider working with a single-source logistics provider for your ocean container shipping, such as a freight forwarder that is a licensed NVOCC. A single-source approach offers the benefit of streamlined communication and simplified logistics management.

For instance, a forwarder can handle freight booking, drayage at both departure and arrival ports, customs clearance, and ground transportation out of port. This highly efficient, turnkey process saves you hours and gives you peace of mind, knowing every contingency is taken care of. 

The Right Relationship Is Everything

When looking at all the available options for reducing container shipping costs, one thing becomes abundantly clear: it’s a lot for you to manage on top of all the responsibilities of running your business.

Headquartered near the Port of New York and New Jersey (with offices in Poland and Lithuania, as well), I.C.E. Transport is a licensed NVOCC that provides small and mid-sized businesses the right blend of expertise, global capabilities and the highly personalized service of a family-owned operation. A specialist in ocean freight logistics between the U.S. and Europe, I.C.E. has successfully handled thousands of container shipments, and earned the trust and loyalty of shippers just like you. Contact I.C.E. Transport today to learn more.