The transport and freight forwarding industry is subject to certain fluctuations that can affect what freight quotes customers will get. Understanding what factors can affect this industry will help in anticipating freight rates and knowing when and how to secure the best deals. This has become increasingly important as more businesses shift away from expanding their brick-and-mortar operations to facilitating online purchases. And the fact that though many retail online orders are tagged with free shipping, it does not mean businesses receive this service for free.
Fuel Prices
Whether it is shipping on land, by air, or sea, fuel expenses make up a substantial part of the cost of operating a freight business. Whenever you see pump prices go up, then chances are that transport firms are faced with the same challenge and will at some point need to shift the burden onto their customers, hence increased pricing on freight quotes.
Demand for Services
This can influence both pricing and speed of service delivery. When demand for services is high, transporters may be inclined to boost their pricing. It can however work in favor of clients who want faster delivery of their goods as vehicles and containers will fill up faster. This is especially true where you have less than truckload (LTL) shipments, meaning the transporter has to wait until cargo capacity is reached before dispatching shipments. When demand is low, service delivery may be delayed, and with many transporters wanting to capture the orders of limited customers, more room to negotiate for lower pricing on quotes.
Geopolitical Events
Events like war and other conflicts can affect the routes that transporters use to pick and deliver cargo. Freight firms will still endeavor to make delivery where possible, but this may require them to take a more circuitous route that will cost more in shipping fees. Where the events occur in a major oil-producing region, this problem can then also lead to increased fuel prices as shortages are likely to occur.
Customer Loyalty
Establishing a good rapport and loyalty with your freight forwarder can help qualify a business for preferential freight rates. Consistently seeking shipping services from the same firm will help encourage their willingness to offer better deals just so you keep coming back. This however works best when you have regular shipping needs that you have satisfied by the same provider. Businesses with less frequent shipping needs may not qualify for this privilege.