Freight shipping is, in most cases, the backbone of international business. The cost of shipping goods through various channels of transportation, mainly air, and sea, is affected by numerous factors as hereby outlined.

1. FACTORS THAT
AFFECT
SHIPPING COST
Neal Elbaum
NealElbaum.org
COST OF FUEL
The expense of the rising
costs
The cost of maritime, land and air
transportation is largely affected by the
cost of fuel. Freight companies normally
tend to raise their shipping tariffs in
response to a rise in the cost of fuel and
vice versa. This is because the expense of
the rising cost of fuel is normally
transferred to the merchants.
DEMAND FOR
FREIGHT
SERVICES
Affecting the
transportation sector
The transportation sector is affected by
supply and demand dynamics. Shipping
companies may opt to charge a premium
fee to benefit from the increased demand.
On the contrary, a drop in the demand for
freight services may lead to shipping
companies lowering their charges in order
to attract customers from the diminishing
market.
GEOPOLITICAL
DYNAMICS
Affecting the
international shipping
sector
Countries that have direct control over
shipping routes such as across the
Mediterranean can directly affect the
shipping costs through political and
regulatory influence. Straining of
international relations can lead to
countries having a frontier to the ocean
limit the shipping vessels that can pass
their routes. This has a direct effect on
shipping companies’ tariffs.
THE VOLUME OF
GOODS
TRANSPORTED
Increased charges and
fees
Shipping companies use tariffs which give
them an opportunity to charge their
customers fees depending on the volume
of cargo to be transported. In most cases,
the companies charge a lesser fee in cases
of bulk transportation and increase the
fees in cases where the items being
transported are non-bulk.
WEATHER
ELEMENTS
Air and sea transport
routes are affected
Adverse weather during winter and
summer can lead to blockage of
international shipping channels. This has
a direct influence on shipping companies’
freight charges. Adverse weather makes
the companies charge a premium fee due
to the increased risk and need to secure
more insurance for freight cargo.
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