International transportation: shipping strategy & prices
After you made the sales, the delivery process starts. Getting your products across swiftly is essential for customer satisfaction, and getting them across inexpensively is essential for your financial results. So choosing the right mode of transportation is key to an efficient and cost-effective international arrangement.
This article looks at the various shipping options that you have and their related costs. We also look into customs clearance and import duties.
Types of goods and the impact on the mode of transportation
Your choice of transport is heavily dependent on your type of goods and the business requirements needed for the venture. You should match the transport mode with your goods to balance service, quality, cost, organization and time.
Transporting fresh goods (e.g. fruits, vegetable, fresh meat) will require speed and time. Refrigeration should also be considered in transporting these products.
If your business involves transporting of animals, you must adhere to specific rules and regulations. There are guidelines and clearances to follow safe and successful animal transport. If your goods are considered dangerous, then you must follow the rigid procedures that entail when moving them.
Four modes of international transport and their costs
The four main modes of international transport are road, sea, rail and air. Each mode has its perks, drawbacks and conditions pertaining to the type of goods being exported or imported. Sometimes, there’s a need to use more than one mode of transport, here you may contact freight forwarders to deal with logistics.
Costs of road transport
Road transport is more flexible than the other three modes. It is relatively easier to track your goods, secure consignments, schedule the transport and pay the relevant fees. On the other hand, long distances are not time-efficient especially if traffic is involved. Some countries may have high toll fee charges and the possibility of getting your goods damaged is high as well.
Where it comes to large quantities, road transportation costs around 3 to 7 US dollarcents per ton per kilometer. You may add to accounting the ecological cost of road transport. If you want to own your own trucks, the costs of having such a truck may be around 1300 to 1900 USD per day, excluding driver. If you just want to send a package of 50 kg over a distance of 300 km then in the US that may cost around 200 USD.
Costs of rail transport
This mode of transport is environmental friendly and is often used in prosperous continents like Europe. However, rail transport has inflexible schedules and may be delayed due to mechanical malfunctions. Not all regions all over the globe have a respectable rail system, which is a huge setback for remote regions.
The costs for rail transportation vary from 2 to 6 US dollarcents per ton per kilometer. This makes rail the cheaper alternative for road transportation, if a railway is available.
Costs of Sea container transport
Transport by sea allows you to ship large volumes with lesser cost than the other three modes. Boats are one of the most ecological way to transport, with smaller carbon emission than truck or plane. Shipping containers could also be used when transporting goods by land.
In general freight prices have gone down after the Covid-19 period, but are now rising again with the increased economic activity in the world.
For freight from Europe to Asia the main risk factor is the passage along the Middle East with the Suez canal and the Gulf of Aden.
Costs of air transport
Using air transport for international trade is the quickest way to ensure product delivery and distribution. It is also the safest methods of transport, and you could export or import a variety of goods through this mode.
Costs for air transportation are mainly determined by the weight and partly by the distance. Single packages of 1 kg will cost around 30 to 50 USD to ship, 10 kg may be 70 to 90 USD and 100 kg may be over 400 USD, if you take the rates of carriers like Fedex and UPS.
If volumes grow and especially if you can guarantee a daily stream of packages to keep the aircraft of these carriers occupied, then prices may drop drastically. This can be seen for recent bulk prices for the Asia Pacific region.
Customs regulations and import duties
You must also equip your goods with proper labeling and documents for legal purposes. Key is to classify your products with the right HS code, which determines the way customs handles it an also the import tariffs. Custom procedures and the number of forms needed vary per country: to get your goods into Singapore 4 documents will do, for Thailand you will need 10.
Read more on the specifics for your destination country in one of the articles below.
Read more of our articles
Frequently asked questions
International transportation costs vary based on several factors, including distance, cargo weight, shipping method (air, sea, land), fuel prices, customs duties, and the type of goods being shipped. Understanding these variables can help businesses and individuals better estimate their shipping expenses.
Air freight is generally faster but more expensive compared to other shipping methods. Factors like cargo size, weight, and the urgency of delivery can significantly influence air freight costs. Additionally, fluctuations in fuel prices and airport fees also play a role in the overall price.
Sea freight is often more cost-effective for large or bulk shipments compared to land transport. However, the cost-efficiency of sea transport depends on the distance between the origin and destination, the type of goods, and port fees. For shorter distances or landlocked regions, land transport may be a more affordable option.
Smaller shipments tend to have higher per-unit costs when shipping internationally because the overall cost is spread over fewer items. Larger shipments, on the other hand, benefit from economies of scale, resulting in lower per-unit costs. Choosing the right shipping mode and optimizing load sizes can help manage costs effectively.
While freight charges are the most obvious cost, there are often hidden expenses associated with international shipping. These include customs fees, insurance, packaging, handling, port charges, and storage costs. It’s important to factor in these potential extra charges when estimating the total cost of shipping internationally.
