Cost Comparison Between Bulk and FCL Shipments

There are many different options available, but the price is usually a determining factor for whether you should move your goods in bulk, full-container load, less-than-container load, or another method.

In this article, we'll look at how it costs differ from full-container load!

What Is Bulk Moving?

Bulk is a method where merchants simultaneously move large amounts of products. This saves the merchant money because they can purchase larger shipments from their companies at lower prices.

Merchants often use this method for items such as clothing, electronics, books, toys, food, and household goods.

In addition to saving money, bulk offers many benefits. For example, it allows purchasing multiple items at once without having to make separate purchases from different suppliers.

How Much Does It Charge?

In 2019, freight rates rose to an average of $34,000 daily for Capesize vessels. These vessels can hold around 180,000 tons and are frequently used as dry vessels.

However, fees tend to fluctuate quite significantly. For instance, near the end of 2019, Clarksons Platou Securities approximated Capsizes rates to be only about $18,000 per day.

Factors That Affect Rates

1) Shipping or freight class

The moving or freight class depends on the product's weight and size, among other things. For example, a large item like a refrigerator might ship via truck while a small item such as a laptop computer might go by air.

2) Size and weight

Carriers use the NMFC (Nominal Measurement Factor Code) system to calculate the price. This method considers the weight and size of the package.

A good way to reduce charges is to keep track of the NMFC codes. You can do this by monitoring the codes used by the movers you work with.

There are three main types of NMFC codes: Universal Product Code (UPC), Home Shopping Code (HS), and Dimensional Class Codes (DC).

Most retailers and companies use the UPC. This code contains information about the dimensions of the product and its weight. For example, a single DVD player box might have an NMFC code of 400000115. This number can mean the following:

• Size – 8 inches x 5 inches x 3 inches.
• Weight – 0.5 pounds.

3) Inventory distance

One of the most common methods of calculating expenditure is factoring its distance. Costs may be influenced by distance, but they typically don't change per mile. Therefore, sometimes per-mile rates get lower with distance. This is because line-haul, terminal expenses and different modes can play a role.

4) Dimensional weight

This standard calculation formula takes into account the item's dimensions (length, width, height) and density (mass per unit volume).

Charges may vary depending on whether they're calculated by dimensional or gross weights. For example, if an item weighs less than one pound but takes up a lot of space, it will be moved at a lower rate than something that weighs five pounds but doesn't require as much room.

What Is Full-Container Load?

The term "Full-Container Load" (FCL) describes filled containers.

Most ships charge between $2,000 and $3,000 for shipments.

The price has increased dramatically since the COVID-19 pandemic. While there are still some exceptions, most carriers charge much higher fees for FCL than historically.

Factors That Affect Rates

1) Customs bonds

A customs bond is required whenever someone moves something to the United States. There are three types of bonds: single-entry, annual, and lifetime.

Single-entry bonds cover cargo that occurs during one calendar year. They are valid for one cargo per person, address, and port of entry or destination port.

Annual bonds cover shipments that occur throughout the entire year.

Lifetime bonds cover cargoes that occur multiple times throughout the bond's life.

2) Duties and taxes

Customs duties vary based on where products originate.

For example, the average customs duty on imports coming into Canada is 7%, while it's 3% in Mexico. In addition, products originating in China are subject to a 10% tariff, while those from India face a 5% tax.

3) Demurrage and detention

Demurrage refers to the cost associated with storing cargo in transit. Detention refers to the price associated with transporting cargo while it sits idle. Finally, penalties refer to fines levied against carriers for violations of regulations.

A common misconception among movers is that demurrage and detention are the same. While both terms relate to storing, demurrage relates to the period during which the goods are stored, whereas detention refers to the amount of time spent storing them. For example, a carrier might charge $1 per day for demurrage but only $0.50 per day for detention.

Sometimes additional charges are imposed based on the time the container spends in transit or being detained. These taxes are called detention fees.

On the other hand, the carrier must pay a penalty if the container stays longer than expected. However, the carrier does not incur a penalty fee if the container departs early.

4) Port congestion surcharge

The port congestion surcharge is imposed on containers moved via rail, truck, ship, and air. This charge can apply to shipments over 500 kilograms (1,100 pounds), depending on the country's maritime regulations.

The fees also vary depending on the mode of transportation used. For example, if you use trucks, the fee is calculated based on the total length of the load. On the other hand, if you use ships, the charge is calculated according to the volume.

How Can I Get the Best Pricing?

Getting the lowest freight rates is easier than ever, thanks to technological advancements like computerized quoting systems and online marketplaces. However, you can still do some things to ensure you receive the best possible price.

1) Consider multiple carriers

The most important thing you can do to save money on shipments is to pick one out of various carriers. Reviewing multiple carriers increases your chances of receiving competitive quotes from different movers.

2) Ask for volume discounts

If you're planning on moving a large cargo, ask your supplier if they offer volume discounts. In addition, many suppliers offer special promotions for repeat customers.

Conclusion

To sum up, it can be cheaper to move using FCL; however, many factors affect the cost of FCL and hauling bulk cargo. Therefore, it is best to check out the quotations that various haulers offer so you can determine the best option for you.

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