What Does It Really Cost to Move a Product Around the World?

Bob announced himself for a visit and said he now knows how I like my coffee. This is fun!

“I got an ocean freight quote of $4,500 for a container from Taiwan to the US West Coast. Is that really what it costs us to get the product here?”

This question is worth pursuing. Besides comparing the modes of transportation (air vs. ocean)

there are many factors to look at that may influence the cost of a shipment.

Bob determined that they want to ship ocean freight because his company has enough time to allow for the transit time of a container ship from Taiwan to the US.

“Well, I am arranging the move. And the shipper told me the cargo will be ready for loading and pickup next month. I feel like I need someone to help arrange because this is a new product from a new shipper and we will only ship a few containers.”

What steps need to be considered when evaluating the cost of an international shipment?

The ocean freight determines the mode of transportation for Bob’s import from Taiwan port to US port. But what else needs to be arranged?

“The container needs to be loaded and moved from the shipper’s dock door to Taiwan port. And I want it in my warehouse, so there needs to be a delivery from the US port to me. This makes it more complex.”

Bob needs to think about who will arrange the pickup of the cargo from the shipper and who will transport the loaded container to a seaport in Taiwan. Is export customs clearance required before the shipment can leave the country? Are there charges for these services that need to be considered?

And once the shipment comes closer to the US…

Who will arrange the customs clearance? Who are the carriers that go into the port?

What does all of this cost?

Bob listened attentively and concluded: “So the freight rate tells me what I'm paying for international transportation, but not necessarily what it costs my company to get the product into our operation.”