What Makes Your Shipping Costs High?

According to SitePoint, one of the most common reasons why customers abandon their shopping carts is because of high ocean freight costs. At one point in your life, you might have already experienced this scenario, but did it ever occur to you what makes the fees this expensive?

Shipping rates don’t just appear on your shopping carts out of the blue, waiting to break the bank. Several factors play in the background, resulting to that ‘stiff’ fee. In the Philippines, a shipping agency considers the following to avoid incurring huge loss when transporting your package, thus, the high rates.

Container Size

Shipping rates follow the principle of economies of scale. In this principle, when there is increased output of products, a cost advantage occurs. In simpler terms, when goods are not enough to fill the container’s capacity, an increase in the shipping rate happens.

Currency Rates

The currency rates also play a part in shipping fees. Freight costs are highly dependent on the rise and fall of currencies, specifically dollar, which is used in global crude oil trades.

Customs and Taxes

Ocean freight costs are also affected by the country’s customs and tax regulations. These regulations differ in each country. For instance, when a shipping agency is sending goods in the Philippines, it should follow the country’s tax regulations which can be found here.

Fuel Rates

Fuel rates also affect shipping costs. Due to the increasing global fuel costs this year, the freight rates are also rising. Experts also forecast a hike in fuel and energy prices in 2017.

Land Transportation

Shipping your goods overseas also include land transportation costs. From picking up your package from your house to transporting it to your intended destination, the costs are added to your shipping fee.

Penalties

A fine may be imposed if there is a delay in your deliveries, therefore, shipping companies may charge more to make room for additional costs. This is then added to the freight rates.

Season

Sending your goods in a particular season also affects the shipping rates. For instance, if you are sending perishable goods such as fruits and vegetables, additional fees will be incurred to ensure your package arrives safely to its destination.

Service Charges

Additional charges such as brokerage services, security service charges, extended and remote surcharges, and more can also result to higher shipping costs.

Shipping Destination

Rates also vary depending on the goods’ intended destination. Generally speaking, the longer the distance of the shipment, the higher the shipping rate is.

Terminal Fees

Terminal fees are fees paid from the starting port to the destination port. These also contribute to the high ocean freight rates.

There you have it. Shipping agencies in the Philippines don’t really mean to do your wallet harm. They, too, have to put up with these high rates to continue providing you good service. Hence, remember these factors the next time you’re having second thoughts about abandoning your shopping cart.

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