Prices continue to go up meaning rising freight costs

Transport and freight costs have been steadily increasing over the past few years and even more so in the last 12 months, leaving many people wondering why. Various factors have contributed to rising transport and freight costs and explore how a freight forwarder can help keep these down. By the end of this article, you should have a better understanding of why transport and freight costs have increased and what can be done to reduce them.

The main factors

  • Covid – a high demand for transport driven by post-pandemic recovery of economies.
  • Brexit – decreased appetite of EU drivers to come to the UK, additional customs fees, port fees – hassle factor so any EU hauliers that do come want a premium.
  • Drivers Mobility package – implemented to safeguard the working rights of truck drivers in Europe by imposing work, rest and cabotage regimes. Inevitably drivers rates have increased and the rules on rest / monthly breaks will mean fewer drivers available at any one time – hence an increase in rates to cover wages.
  • Fuel increases (a consequence of the War on Ukraine) – energy hikes across the board.
  • Driver shortages – wage pressure from the small pool of professional drivers, lack of desire from the younger generation to begin a driving career.
  • Inflation

The Role of Port Fees in Rising Freight Costs

Port fees are charges that are imposed by port authorities for the use of their facilities and services. The fees cover a variety of costs, including maintenance and operation of the port, as well as security and environmental protection. In recent years since Brexit, port fees have been steadily increasing due to a variety of factors such as increased port traffic, as the UK is using these ports a lot more thus causing an increased demand for services.

We predict we will see a standardisation of port fees across the next few years.

Click here for current port fees.

Government information on port codes

So how does a Freight Forwarder help?

All these factors over the past few years have proven why freight forwarders have a place in the market.

From a practical point of view freight forwarders can reduce costs by providing a range of services that can streamline the process of shipping goods.

These services include helping to negotiate better rates with carriers, consolidating shipments to save on costs, and providing advice on the most efficient way to ship goods. Additionally, freight forwarders can help manage paperwork and customs clearance, which can save time and money

From a knowledge point of view freight forwarders have a deep understanding of the shipping industry, which allows them to provide valuable advice and services to their customers. They have knowledge of the various regulations and laws that govern shipping, even more useful with Brexit and the changes the UK is still getting to grips with.

As well as an understanding of the different carriers and their pricing structures. This market knowledge allows freight forwarders to negotiate better rates with carriers and provide helpful advice on the most efficient way to ship goods. By utilizing a freight forwarder’s market knowledge, businesses can reduce their transport costs while ensuring their goods are shipped safely and on time.

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