Sea Freight Cost: What Factors Affect Your Shipping Rate?

How Sea Freight Rates Are Structured

Sea freight pricing has two main components: the base ocean freight rate and a collection of surcharges. The base rate is the core charge for moving your container from port A to port B. Surcharges are additional fees that carriers add to cover specific costs — and these can sometimes exceed the base rate itself.

Base Ocean Freight Rate

The base rate is quoted per TEU (20ft container) or FEU (40ft container) on most routes. Spot rates change weekly based on supply and demand. Contracted rates (agreed for 3–12 months) offer stability but may be higher than spot when the market is soft.

Major trade lane benchmarks: China-USA West Coast has ranged from $1,400 to $20,000+ per FEU (40ft) in recent years. China-Europe typically ranges from $800 to $15,000 per TEU depending on market conditions. Rates for LCL are quoted per CBM.

Key Surcharges Explained

BAF/FAF — Bunker/Fuel Adjustment Factor: Covers fuel cost fluctuations. When oil prices rise, BAF rises. Can add $100–$600 per container.

PSS — Peak Season Surcharge: Applied during high-demand periods (pre-Christmas, Chinese New Year). Typically $200–$600 per container.

CAF — Currency Adjustment Factor: Compensates for exchange rate movements between the billing currency and local currencies.

ECA — Emissions Control Area surcharge: Ships passing through low-sulphur zones (North Sea, Baltic, US/Canada coasts) pay extra for cleaner fuel.

THC — Terminal Handling Charge: Charged at both origin and destination ports for loading/unloading and moving the container within the terminal. Typically $150–$350 per container each end.

Documentation/B/L fee: Carrier charge for issuing the bill of lading. Typically $50–$100.

Chassis fee (USA): In North America, drayage often includes a daily chassis hire charge.

Factors That Drive Rate Changes

Supply and demand: The biggest driver. When capacity is tight (e.g. post-COVID), rates spike. When ships are underutilised, rates fall sharply.

Fuel prices: Shipping runs on bunker fuel. When oil rises, BAF surcharges increase proportionally.

Port congestion: Congested ports mean slower turnaround, effectively reducing available capacity and pushing rates up.

Blank sailings: Carriers cancel sailings to manage capacity — this reduces supply and keeps rates elevated.

Seasonality: Pre-Christmas (August–October) and post-Chinese New Year (February–April) are peak seasons with higher rates.

Trade lane balance: Imbalanced trade flows (more export than import on a lane) mean cheap rates in one direction and expensive in the other.

Other Costs Beyond Ocean Freight

The total cost of a sea shipment includes: origin charges (export customs, trucking to port, port fees), ocean freight + surcharges, destination charges (import duties, destination THC, customs clearance, trucking to warehouse). Ocean freight is often only 40–60% of total landed cost.

How to Get Better Rates

• Book in advance — spot rates are volatile; advance booking locks in rates
• Consolidate shipments to reach FCL threshold
• Build volume with fewer forwarders to negotiate contracts
• Be flexible on departure dates — mid-week sailings are often cheaper
• Get 3–5 quotes for every shipment

Frequently Asked Questions