For several reasons, the cost of carrying freight varies across trade lines
Shipping a product weighing 100 cbm from Shenzhen to Rotterdam will probably cost less money than shipping identical goods weighing 100 cbm from Shenzhen to Los Angeles.
These cost differences are the result of:
Demand and Supply
The availability and demand for services in a given trade lane affect its freight rates. On high-traffic trade lanes, where numerous carriers are providing service and must maintain their rates competitive to attract market share, rates tend to be lower.
On trade corridors where there is little demand for service and possibly few carriers offering service, freight rates are more likely to be higher.
GRI (General Rate Increase) (General Rate Increase)
On trade lanes where a GRI has been put in place, freight rates will be higher. GRIs are typically used in trade lanes where carrier competition has resulted in excessively cheap rates.
Market and Seasonal Conditions
During times of strong demand, carriers may add a PSS (Peak Season Surcharge) to trade lanes. Even while a PSS can be used at any time of year, it is most frequently used before the fall and winter holidays and the Chinese New Year.
On trade routes where there is a high demand due to peak season, Chinese New Year, and Golden Week, freight charges may also increase.
The conditions at the port, which may be brought on by the weather, strikes, etc., could potentially affect trade lane freight rates.
If you want to know when a GRI or PSS has been adopted, when port conditions are resulting in delays or rate rises, or whether you should anticipate an increase or decrease in rates on your trade routes, sign up for Beeontrade's market updates.