Converting shipping cost to a single unit

The reason to write this article was a discussion in LinkedIn initiated by young internship Umamaheshwaran Sundaram who is looking to ways to convert and start providing quotes to a customer per ton. I should admit that similar attempts I have been trying since I have started in the freight forwarding – regrettably so far without huge success.

Why?

Freight forwarding by itself is an activity of coordinating and managing transportation of goods from their origin to their destination, encompassing many activities provided by various suppliers.

Imagine simple 1 CBM movement of LCL cargo from India to Bulgaria. Firstly you need to pick-up the goods somewhere in India – which is pretty big country. SO you need to higher a haulier – how this haulier will quote – per ton, per shipment, per truck or per CBM. Then your freight arrives in a warehouse – which might be your warehouse or warehouse of your co-loader, ord partner or directly the NVOCC. ANother cost or set of costs accrues here – warehousing charges – how they will be charged per CBM, W/M, tone or per shipment. In the warehouse your shipment will be staffed in an LCL container and moved to the port of origin – another set of costs billed per various units is generated etc. etc.

So in order to convert to single measuring unit, the one should consider too many factors you need to consider:

– projected loading of the container
– ratio volume to gross weight
– average number of shipments per one container
– average gross weight per shpt
– average volume per shipment

In todays  unstable market situation this is only possible to already established NVOCC or air carriers (even they face problems with calculating their cost).

So it is better to provide customers with list of cost for certain services and when it is per particular shipment to quote them exactly for that same shipment. I would be upset if customer knocks on my door and requests from me a quotation in single unit. And if they insist on this then I would insist that this unit is per shipment.

Only then both me and my customer will be satisfied.

KG CARGO is a Bulgarian freight forwarder who provides transportation and logistics services to and from Bulgaria.

For more information on KG CARGO freight forwarding service please contact us.

4 thoughts on “Converting shipping cost to a single unit”

  1. Nick

    I have a question regarding the average shipment per one container, what is the healthy number for this criteria?
    thx in advance

    Sincerely,
    Nick

  2. Umamaheshwaran Sundaram

    Sir you are really a knowledged person. The information that you have given here will indeed help many young aspiring people like me to gain more knowledge and move forward.

    Thanks & Regards,
    Umamaheshwaran Sundaram

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