HOW TO: Read and compare freight quotes

When you are getting a freight quote, do you know what to look for?

A freight quote can be quite complex, and what you see is not always what you get. All freight costs are not always included in the final quote you receive. Therefore it is important to know what services are included, what services require additional fees, what costs are undetermined, and what other factors may increase your final bill.

The goal is to get a freight quote that is as close as possible to the actual total that you’ll be paying. Here are a few tips to help you make sure you get a freight quote that is as thorough and detailed as possible, as well as what to look out for when comparing quotes:

Ensure all segments of the logistical chain are quoted for.

The transport part of a freight quote consists of the below mentioned charges. Ensure all the charges required by the Incoterm are quoted for. These costs may include:

Transport and freight costs in the country of origin. This includes collection at the seller’s premises, all freight handling costs, loading cargo onto the boat/plane, port fees etc.
Transport from the country of origin to the country of destination.
Transport and freight costs in the country of destination. This includes delivery at the buyer’s premises, all freight handling costs, offloading charges, depot storage fees, port fees etc.

Check that the VAT and import duty tax is included in the quote.

A major portion of import costs are the VAT and duty tax that is paid to Customs. If the freight provider is clearing your goods, this amount should be included in a freight quote, however it is often not. The percentage duty tax and a portion of the VAT is dependent on the HS code used. Ensure that your freight agent has the correct code to predetermine the taxes payable.

Are Freight Agency Service fees listed separately?

The freight company is responsible for booking, managing, tracking and clearing your shipment. The majority of the costs in a freight quote are not for the freight company, but are rather payable to the shipping lines, port authorities, trucking companies and Customs on your behalf. A reputable freight company will list their service fees separately. The freight agent’s service fee is normally listed as an agency fee on the quotation. In addition, the freight company may add a fee for clearing the shipment and processing documentation.

If the freight agent is handling clearing for you it means they will be paying Customs duty and VAT on your behalf. In this case they will likely charge a disbursement fee.

Other costs that may be included in a freight quote.

International Shipping Insurance (the only way to ensure your right to claim damages is by buying insurance. The cost of insurance is usually based on the amount it will cost to replace your entire shipment)
Packing materials
Pre-shipment inspections

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