Every rate, surcharge and cost figure used here is illustrative, chosen to make the arithmetic clear. Freight rates move constantly — sometimes weekly — and vary by lane, season, carrier and contract. Learn the method, then price from live rates you have obtained yourself.
Reading a Carrier Rate Sheet
Before you can sell freight you have to understand what you are buying. Rate sheets are written for people who already know the conventions — this module teaches them.
How rate sheets are built
You will learn the structure of a carrier rate sheet and what each block is telling you.
A rate sheet is not a price list. It is a conditional offer: this price, for this cargo, on this lane, within these dates, subject to these conditions. Every part matters.
OCEAN RATE SHEET - illustrative Valid 01-30 Sep 2026
Lane Ningbo (CNNGB) -> Felixstowe (GBFXT)
Service Weekly, Tue departure, transit 32-36 days
Commodity FAK (freight all kinds) - excludes DG, reefer, OOG
20' GP 40' GP 40' HC
Ocean freight USD 1,180 USD 1,940 USD 2,010
Bunker surcharge (BAF) 285 520 520
Carrier security fee 12 24 24
--------- --------- ---------
ALL-IN SEA FREIGHT USD 1,477 USD 2,484 USD 2,554
Free time at destination 7 days demurrage / 3 days detention
Subject to space and equipment availability
Excludes origin haulage, THC both ends, customs,
destination haulage, VGM, documentation
Payment terms 14 days from invoice
Rate basis Per container, port to port
The five blocks
- Scope — the lane, the service, the transit time. Defines what you are actually buying.
- Commodity — FAK means the carrier will take most general cargo at one rate. Exclusions matter enormously.
- The rate itself — base rate plus the surcharges the carrier has chosen to show.
- Conditions — validity, free time, subject-to clauses.
- Exclusions — everything you still have to buy elsewhere. Usually the longest and least-read section.
Reading the rate and skipping the exclusions. The sheet above quotes USD 2,484 for a 40ft. The actual door-to-door cost will be roughly double that once haulage, terminal handling at both ends, customs and documentation are added. Quoting from the rate line alone guarantees a loss.
Read any rate sheet from the bottom up. Exclusions, conditions and validity first; the headline number last. It takes the same time and it stops the big number anchoring your thinking before you know what it covers.
- A rate sheet is a conditional offer, not a price
- Five blocks: scope, commodity, rate, conditions, exclusions
- Read exclusions first — they usually cost more than the rate itself
Base rate, validity and conditions
You will learn why validity dates matter more in freight than in almost any other industry.
The base rate is the carrier's charge for the transport itself, before surcharges. It is the number that moves most, and the number your margin sits on top of.
Validity is not a formality
Freight rates are unusually volatile. Ocean rates on a major lane can move substantially within a month. A rate valid to the 30th genuinely expires on the 30th, and the replacement may be materially different in either direction.
This creates a trap. You quote a client on the 26th with a rate valid to the 30th. They accept on the 5th of the next month. If you honour the old price on the new rate, the difference comes out of your margin, and it can exceed the margin entirely.
The subject-to clauses
Most rate sheets say subject to space and equipment availability. This means the rate is real but the space is not guaranteed until booked and confirmed. In peak season, having a rate and having a slot are different things, and clients rarely understand the distinction until it costs them.
Quoting with open-ended validity to look accommodating. Every quote you issue must carry its own expiry date, and that date should sit inside your buy rate's validity, not beyond it. A quote that outlives the rate behind it is a promise funded by your own margin.
Set your quote validity a few days shorter than your buy rate's. It gives you room to handle a late acceptance without either eating the difference or going back to the client with an embarrassing increase.
- Base rate is the transport charge before surcharges, and it moves constantly
- Always give quotes an explicit expiry date, shorter than your buy rate's validity
- Subject-to-space means the rate is confirmed but the slot is not
Spot rates versus contract rates
You will learn the two ways freight is bought and when each serves a client better.
| Spot rate | Contract rate | |
|---|---|---|
| Agreed for | A single shipment or a short window | A defined period, often a year |
| Price | Whatever the market is today | Fixed or indexed, agreed in advance |
| Volume commitment | None | Usually a minimum quantity |
| Best when | Rates are falling, or volume is irregular | Rates are rising, or budgeting certainty matters |
| Risk | Price exposure | Commitment you may not fill |
The reality of contract rates
A contract rate is not an absolute guarantee. In a very tight market, shippers on contract rates have historically found space harder to obtain than those paying spot, because carriers allocate scarce capacity towards higher-paying cargo. The contract holds on price; the practical availability can still be squeezed.
Conversely, in a falling market a shipper locked into a contract can find themselves paying well above spot for months.
For most small and mid-sized clients the right answer is a mix: contract cover for the base volume they ship every month, spot for anything above it. It gives budget certainty where they need it and flexibility where they do not, and it is advice most forwarders never offer.
An importer ships around eight containers a month, occasionally twelve. They contract for six and buy the rest spot. When rates spike, six are protected. When rates fall, two-thirds of the overflow benefits immediately. The alternative — contracting for twelve — would have left them committed to volume they often did not have.
- Spot prices today's market; contract fixes a period against a volume commitment
- Contract rates protect price but not always practical space in a tight market
- A mixed approach suits most clients better than either alone
Rates per container, per kilo, per pallet
You will learn the four charging bases and how to convert between them for comparison.
| Basis | Used for | What you must know to price |
|---|---|---|
| Per container | Sea FCL | Container size and type only |
| Per revenue ton (W/M) | Sea LCL | Volume in m³ and weight in tonnes |
| Per kilo | Air freight | Chargeable weight, and the applicable break point |
| Per pallet or loading metre | Road groupage | Pallet count, dimensions, stackability |
Air freight break points
Air rates fall in bands as weight increases. A typical structure looks like this:
- Minimum charge: a fixed amount regardless of weight
- Under 45 kg: the highest rate per kilo
- 45 kg and over: lower
- 100 kg and over: lower again
- 300 kg, 500 kg, 1000 kg: progressively lower
The break point trick worth knowing
Because rates step down at each break point, a shipment just below a break can cost more than a heavier one just above it.
Worked example. Chargeable weight 96 kg. Rate under 100 kg is USD 4.10/kg; at 100 kg and over it is USD 3.60/kg.
- Charged at actual: 96 × 4.10 = USD 393.60
- Charged as 100 kg: 100 × 3.60 = USD 360.00
Declaring the higher weight band saves USD 33.60. This is legitimate and standard practice — it is sometimes called pivoting or rating up.
Always check the next break point when a shipment lands within about 10% below one. It takes seconds, it is entirely above board, and clients notice when their forwarder finds them money on a routine booking.
- Four charging bases: per container, per revenue ton, per kilo, per pallet or loading metre
- Air rates step down at weight break points
- Rating up to the next break can legitimately reduce the charge
What the rate does not include
You will learn the standard exclusions that must be priced separately on every quote.
This is the list that separates a profitable quote from a loss. Almost none of these appear in the headline rate.
- Origin haulage — factory to port or terminal
- Export customs clearance
- Terminal handling at origin (THC) — charged by the terminal, not the carrier's rate
- Documentation fee — B/L issuance
- VGM submission fee
- Terminal handling at destination
- Import customs entry
- Duty and import tax — handled as a disbursement
- Destination haulage
- Waiting time at collection or delivery
- Demurrage and detention beyond free time
- Storage if the container cannot be collected
- Cargo insurance
- Customs examination charges, if selected
Some of these you can price accurately in advance. Some — demurrage, examination charges, waiting time — depend on events that have not happened yet. The professional approach is to price what you can and list the rest as excluded, by name. A quote that stays silent on demurrage is a quote that will produce an argument.
Writing "excludes any other charges" as a catch-all. Clients read that as boilerplate and ignore it. Naming the specific exclusions — demurrage, detention, examination, storage, waiting time — means the conversation when one arises is about the event, not about whether you warned them.
- Fourteen standard exclusions sit outside the headline freight rate
- Price what you can; name what you cannot
- Specific named exclusions beat a vague catch-all clause
Module 1 review
A rate sheet quotes USD 2,484 all-in for a 40ft, port to port. What will the door-to-door cost roughly be?
"All-in" refers to the sea leg only. The excluded charges frequently approach or exceed the freight itself.
An air shipment has a chargeable weight of 96 kg. The rate is 4.10/kg under 100 kg, and 3.60/kg at 100 kg and over. What should you do?
Rating up to the next break point is standard, legitimate practice and reduces the charge whenever a shipment sits just below a break.
Your buy rate is valid to the 30th. What validity should your quote to the client carry?
A quote that expires slightly before your buy rate gives room to handle a late acceptance without absorbing a rate increase.
Volumetric and Chargeable Weight
The arithmetic that decides what a shipment costs. Get this wrong and you quote a loss before you have made a single other mistake.
Why volume is charged as weight
You will learn the principle behind volumetric weight, which makes every formula that follows obvious.
A carrier is limited by two things: how much weight a vehicle can carry, and how much space it has. Whichever runs out first stops them selling more.
Consider a trailer that can carry 24 tonnes in 90 cubic metres of space:
- Load it with steel bar and it hits 24 tonnes using 12 m³. Weight limited. 78 m³ is wasted.
- Load it with pillows and it fills 90 m³ weighing 3 tonnes. Space limited. 21 tonnes of capacity is wasted.
If the carrier charged only by weight, the pillow shipment would pay almost nothing while consuming the entire vehicle. So every mode has a formula converting space into a notional weight, and you are charged on whichever figure is higher.
This is why "how much does it weigh?" is never a complete question. The complete question is "what does it weigh and what are its dimensions, as packed?" A forwarder who quotes on weight alone will be wrong on roughly half of all shipments, and always in the same direction — too cheap.
Explain this principle to clients once, early. Clients who understand why volume is charged stop arguing about it, and start giving you dimensions without being asked. Two minutes of explanation saves a year of friction.
- Carriers are limited by both weight and space
- Volumetric formulas convert space into a chargeable weight figure
- Always ask for weight and dimensions together, as packed
Air freight: the 6000 rule
You will learn the air volumetric formula and work through four examples until it is automatic.
Volumetric weight (kg) = L × W × H in centimetres ÷ 6,000
Chargeable weight is the higher of volumetric and actual.
1. ONE BULKY CRATE 120 x 100 x 90 cm, actual 150 kg Volume 1,080,000 cm3 Volumetric 1,080,000 / 6,000 = 180 kg Actual 150 kg CHARGEABLE 180 kg <- volumetric wins 2. ONE DENSE PALLET 100 x 120 x 80 cm, actual 420 kg Volumetric 960,000 / 6,000 = 160 kg Actual 420 kg CHARGEABLE 420 kg <- actual wins 3. MULTIPLE IDENTICAL CARTONS 6 cartons, each 60 x 40 x 50 cm, each 14 kg Per carton 120,000 / 6,000 = 20 kg Total volumetric 6 x 20 = 120 kg Total actual 6 x 14 = 84 kg CHARGEABLE 120 kg 4. MIXED CONSIGNMENT - sum both totals, then compare 2 pallets 120 x 100 x 160 cm @ 310 kg 3 cartons 50 x 40 x 30 cm @ 18 kg Pallets volumetric 2 x (1,920,000/6,000) = 640 kg actual 620 kg Cartons volumetric 3 x ( 60,000/6,000) = 30 kg actual 54 kg TOTAL volumetric 670 kg | TOTAL actual 674 kg CHARGEABLE 674 kg <- compare TOTALS, never piece by piece
Example 4 is where people go wrong. You do not take the higher figure for each piece and add them up — that would give 640 + 54 = 694 kg, which is too much. Sum all volumetric, sum all actual, then compare the two totals once.
Measure to the outside of the packaging, including pallet feet, wrapping and any overhang, and round up to the nearest centimetre. The airline remeasures at build-up and their figure is the one on your invoice. Optimistic measurements are simply a delayed loss.
- Air volumetric weight is cm³ divided by 6,000
- Chargeable weight is the higher of total volumetric and total actual
- Compare totals, never piece by piece
Road: pallet spaces and loading metres
You will learn how road groupage is measured and why stackability changes a quote so dramatically.
Road freight is usually sold by loading metres (LDM) — metres of trailer floor length consumed, across the full width.
A standard curtainsider is roughly 13.6 loading metres long and 2.4 m wide, taking about 33 Euro pallets on the floor.
Calculating loading metres
LDM = (pallet length × pallet width ÷ 2.4) × number of pallets, where dimensions are in metres.
A Euro pallet is 1.2 × 0.8 m. So one Euro pallet placed with its 0.8 m side along the trailer length occupies 1.2 × 0.8 ÷ 2.4 = 0.4 LDM.
Stackability doubles everything
If a pallet can be double stacked, another pallet sits on top and the floor space is shared. If it cannot, the space above is dead — unsellable to anyone.
8 EURO PALLETS - the same cargo, two answers
STACKABLE
Floor space 8 x 0.4 LDM = 3.2 LDM
Shared with pallets above = 1.6 LDM chargeable
At GBP 92 per LDM = GBP 147
NON-STACKABLE
Floor space 8 x 0.4 LDM = 3.2 LDM
Nothing can go above = 3.2 LDM chargeable
At GBP 92 per LDM = GBP 294
DIFFERENCE: exactly double. One word on the packing list.
Quoting road freight without asking about stackability. It is the single most common pricing error in European road groupage, it doubles the cost when you get it wrong, and the client will not accept a revised invoice after the fact.
Ask three questions on every road enquiry: how many pallets, what size, and are they stackable. If the client says "I think so", that is not a yes — ask whether the top surface is flat and rigid enough to take another pallet's weight. Cartons with domed lids or soft goods are not stackable, whatever anyone hopes.
- Road groupage is sold by loading metres of trailer floor
- A Euro pallet is about 0.4 LDM on the floor
- Non-stackable cargo costs roughly double — always confirm it explicitly
Sea LCL: weight or measure
You will learn the W/M basis and calculate revenue tons confidently.
LCL is charged per revenue ton: either one cubic metre or 1,000 kilograms, whichever is greater. Written as W/M.
CONSIGNMENT VOLUME WEIGHT MEASURE WEIGHT CHARGED ON
(m3) (kg) figure figure
--------------------------------------------------------------------------
Homeware, boxed 15.40 4,100 15.40 4.10 15.40 R/T
Ceramic tiles 3.20 6,800 3.20 6.80 6.80 R/T
Clothing, baled 8.75 1,900 8.75 1.90 8.75 R/T
Machine parts 1.10 2,400 1.10 2.40 2.40 R/T
Cushions 6.00 420 6.00 0.42 6.00 R/T
RULE: measure figure = cubic metres
weight figure = kilograms / 1,000
charge on whichever number is LARGER - never add them
At USD 52 per revenue ton:
Homeware 15.40 x 52 = USD 800.80
Tiles 6.80 x 52 = USD 353.60 (only 3.2 m3 - dense cargo)
Most LCL tariffs carry a minimum charge, often one or two revenue tons. A 0.4 m³ consignment weighing 200 kg will be charged as the minimum, not as 0.4. For very small shipments this makes LCL uncompetitive against a courier or a groupage road service — check before assuming sea is cheapest.
Dense cargo often makes LCL look attractive on the revenue ton calculation, then destroys the economics at destination, where LCL charges are proportionally high. Always run the full LCL total against an FCL total before recommending it — the break-even is closer than most people expect.
- LCL charges on cubic metres or tonnes, whichever is greater
- Never add the two figures together
- Minimum charges make LCL poor value for very small consignments
Ten practice calculations
You will test the three formulas against realistic enquiries until they are automatic.
Work each one out before reading the answer. If you get eight or more right, this module is done.
1 AIR One crate 80 x 60 x 50 cm, 30 kg
2 AIR Four cartons, each 45 x 45 x 40 cm, each 9 kg
3 AIR One pallet 120 x 100 x 70 cm, 340 kg
4 AIR Two crates 100 x 80 x 100 cm @ 95 kg + 5 cartons
50 x 40 x 40 cm @ 22 kg
5 ROAD 6 Euro pallets, stackable
6 ROAD 6 Euro pallets, NOT stackable
7 ROAD 4 pallets 120 x 100 cm, not stackable
8 LCL 9.60 m3, 2,800 kg
9 LCL 2.40 m3, 5,100 kg
10 LCL 0.35 m3, 180 kg (tariff minimum 1 R/T)
| # | Working | Answer |
|---|---|---|
| 1 | 240,000 ÷ 6,000 = 40 vs 30 actual | 40 kg |
| 2 | 81,000 ÷ 6,000 = 13.5 each → 54 vol vs 36 actual | 54 kg |
| 3 | 840,000 ÷ 6,000 = 140 vs 340 actual | 340 kg |
| 4 | Vol: (800,000÷6,000)×2 = 266.7, plus (80,000÷6,000)×5 = 66.7 → 333.4. Actual: 190 + 110 = 300 | 333.4 kg |
| 5 | 6 × 0.4 = 2.4 floor, halved when stacked | 1.2 LDM |
| 6 | 6 × 0.4 = 2.4, nothing above | 2.4 LDM |
| 7 | (1.2 × 1.0 ÷ 2.4) = 0.5 each × 4 | 2.0 LDM |
| 8 | Measure 9.60 vs weight 2.80 | 9.60 R/T |
| 9 | Measure 2.40 vs weight 5.10 | 5.10 R/T |
| 10 | Measure 0.35 vs weight 0.18, but minimum applies | 1.00 R/T |
Question 4 is the one to re-read. Summing the higher figure per item instead of comparing totals is the error that survives longest into a forwarding career, because it produces a plausible-looking number that is always slightly too high.
- Air: divide by 6,000, compare totals
- Road: 0.4 LDM per Euro pallet, doubled if non-stackable
- LCL: m³ or tonnes, whichever is greater, subject to a minimum
Module 2 review
A mixed air consignment has total volumetric 640 kg and total actual 674 kg. What is the chargeable weight?
Sum all volumetric, sum all actual, then compare the totals once. Comparing item by item inflates the figure.
Six Euro pallets become non-stackable instead of stackable. What happens to the road charge?
Floor space is unchanged but the space above becomes unsellable, so the carrier charges for the full floor allocation rather than half.
An LCL consignment is 2.40 m³ and weighs 5,100 kg. What is it charged on?
Weight or measure, whichever is greater. The weight figure of 5.10 exceeds the measure figure of 2.40, and the two are never added.
Building a Full Quote
The longest module in the course, because this is the job. Every leg, every charge, nothing forgotten.
Mapping every leg of the journey
You will learn to draw a shipment as legs before pricing anything, which is how nothing gets missed.
Never start a quote in a spreadsheet. Start by drawing the journey. Every leg is a cost, every handover between legs is a cost, and the Incoterm tells you where your responsibility starts and stops.
JOURNEY MAP - Ningbo factory to Birmingham warehouse, FCL
[1] Factory, Ningbo
| origin haulage
[2] Container yard / port, Ningbo
| export clearance + terminal handling + VGM + documentation
[3] ON BOARD vessel
| ocean freight + surcharges
[4] Felixstowe terminal
| terminal handling + import clearance + duty/VAT
[5] Released
| destination haulage
[6] Client warehouse, Birmingham
| unloading
INCOTERM: FOB Ningbo -> seller covers [1] and [2]
WE quote from [3] onward
Charges to price: ocean + surcharges, THC destination,
customs entry, duty handling, haulage, unloading.
NOT ours: origin haulage, export clearance, origin THC.
Pricing legs the Incoterm says are not yours — which makes you uncompetitive — or missing legs that are — which makes you unprofitable. Draw the map, mark where the Incoterm hands over, and price only from that point.
Count the handovers, not just the legs. Every point where cargo changes hands or changes mode is where a charge hides: lift-on, lift-off, gate fees, storage between legs. Six handovers means at least six places to check for a charge you have not priced.
- Draw the journey as legs before opening a spreadsheet
- The Incoterm marks where your pricing responsibility begins
- Charges hide at handovers, not only within legs
Origin charges
You will learn what sits in origin charges and which ones clients never expect.
- Collection or haulage — factory to port. Priced by distance, vehicle type and waiting time.
- Export customs clearance — a per-declaration fee, plus extra lines for multiple commodity codes.
- Terminal handling charge (THC) — the terminal's charge for moving the container. Set locally, not by the shipping line, and not negotiable.
- Documentation fee — issuing the Bill of Lading.
- VGM fee — submitting the verified gross mass.
- Seal fee — small but always there.
- Container positioning — delivering the empty container to the factory for loading.
- Loading / stuffing — if the cargo is packed at a depot rather than the factory.
- Waiting time — charged after a free period, typically two hours.
Under FOB, origin charges are the seller's responsibility — but many suppliers quote FOB and then invoice the buyer for local charges anyway. This is a persistent source of disputes on imports from several major manufacturing regions. Warn buyers to confirm in writing exactly which origin charges their FOB price includes.
An importer agrees FOB Ningbo, expecting all origin costs to be included. On arrival they receive a separate invoice from the origin agent for terminal handling, documentation and a seal fee. Individually small; across thirty containers a year, a meaningful sum they never budgeted for. Their supplier's position is that these are "local charges", not freight — a distinction that exists nowhere in Incoterms.
- Origin charges include haulage, clearance, THC, documentation, VGM and positioning
- THC is set by the terminal and is not negotiable
- FOB origin charges are frequently invoiced to buyers anyway — confirm inclusions in writing
Main carriage
You will learn what to check on the main leg beyond the rate itself.
The main carriage is the ocean, air or road leg. The rate is the easy part; four other things affect your cost and your client's experience.
- Transit time and reliabilityA cheaper service with two transhipments carries more delay risk than a direct one. Quote both the transit and the number of transhipments.
- Free time includedSeven days demurrage versus three is worth real money to a client who clears slowly. It is negotiable with some carriers and worth asking about.
- Equipment availabilityA rate is useless if the carrier has no boxes at that origin. In tight periods, check before quoting.
- Surcharge exposureWhich surcharges are fixed in your rate and which float. Covered fully in Module 4.
When comparing two ocean quotes, convert free time into money before deciding. Four extra days of demurrage on a 40ft container can be worth more than the difference in freight rate, and clients who clear slowly will experience exactly that.
Quoting the cheapest sailing without mentioning transhipments. A client who discovers their "32 day" service actually transhipped twice and took 51 days will remember it, and the saving was usually a small percentage of the total.
- Quote transit time and transhipment count, not just the rate
- Free time has monetary value — compare it explicitly
- Check equipment availability before quoting in tight markets
Destination charges
You will learn the destination charges that most often get left out of a quote.
- Terminal handling (destination THC) — the mirror of origin THC
- Port security and infrastructure levies — small, fixed, and always present
- Customs entry fee — per declaration, plus per additional commodity line
- Duty and import tax — a disbursement, covered in the next lesson
- Haulage to the delivery address
- Unloading — if the client has no forklift or loading bay
- Container return — moving the empty box back to the depot
- Waiting time at delivery
- LCL deconsolidation — unpacking and separating at the destination CFS
LCL destination charges are proportionally far higher than FCL, and they are the reason LCL quotes that look cheap on freight finish expensive. A consignment paying USD 740 of ocean freight can easily attract USD 600 or more in destination charges. Always obtain destination charges before quoting LCL — never estimate them.
Forgetting that a container must be returned empty. The haulier delivers loaded, waits while it is unloaded, and takes the empty back to a depot — which may be a long way from the client. On inland deliveries this leg alone can be a substantial cost, and it is invisible if you only think about delivery.
- Destination charges mirror origin, plus customs, delivery and container return
- LCL destination charges are disproportionately high — always obtain, never estimate
- Empty container return is a real cost, especially inland
Customs clearance and duty handling
You will learn to price customs work correctly and handle duty without funding it yourself.
Two different things
- Your clearance fee — your charge for preparing and filing the declaration. Your revenue.
- Duty and import tax — money owed to the government. Not your revenue, not your cost, and ideally not your cash.
How to handle duty
Three options, in descending order of preference:
- The client uses their own deferment accountCharges go directly to them. You never touch the money. Always the first thing to ask about.
- The client pays you in advanceYou receive cleared funds before paying customs. Slightly awkward commercially, entirely safe.
- You pay and rechargeYou fund it and invoice afterwards. This is a loan to your client, at your cost, and it is how small forwarders run out of cash.
A growing forwarder wins an account importing consumer electronics. Duty and import VAT run to roughly £14,000 per container. They pay on the client's behalf and invoice on 30-day terms. The client is reliable and always pays.
Volume grows to six containers a month. The forwarder is now permanently funding around £84,000 of someone else's tax, on a margin of a few hundred pounds per container. Their bank balance falls even as profit rises. One late payment month and they cannot pay their own carriers.
The fix they eventually implement: the client opens their own deferment account. The forwarder's revenue is unchanged and their cash position transforms overnight.
If you must advance duty, charge a disbursement fee — a percentage or a fixed amount. It is standard practice, it prices the risk and the cash cost, and it gives the client a financial reason to arrange their own account.
- Your clearance fee is revenue; duty is not
- Ask first whether the client has their own deferment account
- Advancing duty is lending — charge a disbursement fee if you do it
The optional extras clients forget
You will learn the charges that arise mid-shipment and how to handle them in advance.
| Charge | When it arises | How to handle it |
|---|---|---|
| Customs examination | Consignment selected for inspection | Exclude by name; explain it is the authority's decision, not yours |
| Demurrage | Container held at terminal past free time | Exclude; state the free days included |
| Detention | Container off-terminal, not returned in time | Exclude; state the free days included |
| Storage | Cargo cannot be collected or delivered | Exclude |
| Waiting time | Driver held beyond free period | State the free period and hourly rate up front |
| Failed delivery | Site closed, no equipment, refused | State the redelivery charge up front |
| Fumigation / treatment | Wood packaging non-compliant | Exclude; screen for it at quoting |
| Cargo insurance | If the client wants cover | Offer explicitly — never assume declined |
Offering insurance is not an upsell, it is a duty of care. If a client declines and later suffers an uninsured loss, the first question will be whether it was offered. Offer it in writing on every quote, and record the decline. This protects the client and protects you.
Put waiting time and redelivery rates on the quote, not in general terms nobody reads. A client who has seen "£45 per hour after 2 hours free" in the quote accepts the charge. A client who meets it for the first time on an invoice disputes it, and usually wins on goodwill.
- Event-driven charges should be named and excluded, not hidden in terms
- State waiting time and redelivery rates on the quote itself
- Always offer insurance in writing and record a decline
Assembling the quote sheet
You will build a complete quote from a real enquiry, end to end.
ENQUIRY 1 x 40'HC, consumer homeware, Ningbo -> Birmingham
FOB Ningbo. Cargo value GBP 38,000. Delivery to a
warehouse with forklift. Client has no deferment account.
BUY SIDE Cost
Ocean freight 40'HC 2,010.00 USD
BAF 520.00 USD
Security fee 24.00 USD
----------
Sea freight USD 2,554 @ 1.27 2,011.02 GBP
Destination THC 195.00
Port security levy 18.00
Customs entry (1 line) 45.00
Haulage Felixstowe -> Birmingham 340.00
Empty container return 95.00
----------
TOTAL BUY 2,704.02 GBP
SELL SIDE Charge
Sea freight 2,260.00
Destination THC 195.00
Port security levy 18.00
Customs entry 65.00
Haulage and empty return 495.00
Documentation fee 35.00
----------
TOTAL SELL 3,068.00 GBP
MARGIN 363.98 GBP (13.5%)
DISBURSEMENTS (not revenue, funded by client in advance)
Duty @ 4.2% of customs value approx 1,680
Import VAT @ 20% approx 8,300
Disbursement fee if we advance 2.5%
EXCLUDED demurrage beyond 7 days, detention beyond 3 days,
customs examination charges, storage, waiting time
over 2 hours (GBP 45/hr), redelivery (GBP 180),
fumigation, cargo insurance
VALIDITY 27 September 2026
SUBJECT TO space and equipment availability
TRANSIT 32-36 days port to port, direct service, no transhipment
INSURANCE Available at 0.35% of CIF value +10% - please confirm
Keep your buy sheet and your sell sheet in the same file but never send the buy side. The discipline of writing both means you always know your margin before you send the quote, rather than discovering it when the invoices arrive.
Quoting in one currency while buying in another without a rate buffer. Sea freight above is bought in dollars and sold in sterling. A few per cent of currency movement between quote and invoice can consume a third of that margin. Either build in a buffer or state that the quote is subject to the exchange rate on the invoice date.
- Build buy and sell side by side so margin is known before sending
- Keep disbursements separate from revenue
- Name exclusions, state validity, and handle currency exposure explicitly
Module 3 review
A client has no deferment account and duty will be £9,000 per container, six containers a month. What do you advise?
Advancing £54,000 a month of someone else's tax on a small margin is how forwarders run out of cash while appearing profitable.
Under FOB, who is responsible for origin terminal handling charges?
FOB puts origin charges on the seller, but the practice of invoicing buyers for "local charges" is widespread. Confirm inclusions in writing.
Where should waiting time and redelivery rates appear?
A client who has seen the rate in the quote accepts the charge. One meeting it first on an invoice disputes it, and usually wins on goodwill.
Surcharges
The charges that move after you have quoted. Understanding them is what lets you explain an increase without sounding like you are inventing fees.
Fuel surcharges and how they move
You will learn why fuel is charged separately and how the mechanism works across modes.
Fuel is a large, volatile share of a carrier's cost. Rather than rewriting every rate when fuel moves, carriers separate it into a surcharge that adjusts on its own cycle.
| Mode | Name | Typical mechanism |
|---|---|---|
| Sea | BAF / bunker surcharge | Set per container per lane, revised periodically |
| Air | Fuel surcharge | Per kilo of chargeable weight, often revised monthly |
| Road | Fuel escalator | A percentage of the base rate, tied to a published fuel index |
Why this matters to your quote
If your quote shows one all-in figure and the surcharge changes before shipment, you either absorb it or go back to the client with an increase. Neither is comfortable.
Two legitimate approaches:
- Fixed all-in. You take the surcharge risk for the validity period. Simpler for the client, riskier for you. Appropriate for short validity.
- Base plus surcharges as applicable. You show the current surcharge and state it applies at the rate ruling on shipment date. Riskier for the client, honest, and standard in the industry.
Whichever you choose, say which one you are doing on the quote. "All-in, fixed for validity" and "subject to surcharges ruling at time of shipment" are both perfectly acceptable. What causes disputes is a quote that does not say.
- Fuel is separated out because it moves faster than base rates
- Sea uses per-container BAF; air per kilo; road a percentage escalator
- State explicitly whether your quote is fixed or subject to ruling surcharges
Currency adjustment
You will learn how currency risk enters a freight quote and how to manage it.
Freight is often bought in one currency and sold in another. Ocean rates are commonly quoted in US dollars worldwide, while your client is invoiced in their own currency.
Carriers may apply a CAF (currency adjustment factor) to cover their own exposure. But your bigger exposure is usually the gap between the exchange rate you used to quote and the rate when you actually pay.
Worked example
You quote sea freight of USD 2,554 at 1.27, so £2,011. Your margin on the whole job is £364.
- Rate moves to 1.22 by invoice date: cost becomes £2,093. Margin falls to £282.
- Rate moves to 1.18: cost becomes £2,164. Margin falls to £211.
A currency move of a few per cent has taken more than 40% of the profit, without anything going wrong operationally.
Using today's mid-market rate to convert a quote that will be invoiced in six weeks. Use a rate with a buffer, or state that conversion applies at the rate on the invoice date. The mid-market rate is a reference, not a price you can transact at.
For a forwarder handling regular dollar-denominated freight, holding a working balance in that currency removes most of this exposure. It is a treasury decision rather than a freight one, but it protects margin more reliably than any rate negotiation.
- Buying and selling in different currencies puts margin at risk
- Small currency moves can consume a large share of a thin margin
- Use a buffered rate or state conversion applies on invoice date
Peak season and equipment imbalance
You will learn the seasonal and structural surcharges and how to plan around them.
- Peak season surcharge (PSS). Applied when demand exceeds capacity, typically ahead of major retail seasons and before extended factory shutdowns.
- Equipment imbalance surcharge. Applied where containers accumulate in one region and must be repositioned empty to another. Trade is rarely balanced in both directions.
- Congestion surcharge. Applied when a specific port is severely delayed.
- War risk or security surcharge. Applied on routes where additional risk or insurance cost arises.
- Low water or seasonal surcharges. On certain inland waterway and river routes.
The pattern worth teaching clients
Demand on manufacturing lanes tends to build ahead of predictable events — retail peaks, extended public holidays when factories close for weeks. Rates rise, space tightens and surcharges appear. The dates shift year to year but the pattern is consistent.
A retailer ships the same volume every month and is repeatedly caught by peak season pricing and rolled bookings. Their forwarder maps their sales calendar against the known pressure periods and moves two months of stock earlier in the year, into a quieter window. The freight saving is meaningful; avoiding the rollovers matters more, because a rolled container in their peak week costs them sales, not just money.
Build a simple annual calendar of the pressure periods on the lanes you serve, and share it with clients in advance. Nothing builds credibility faster than warning a client in advance about a rate increase they then see arrive.
- Peak season, imbalance and congestion surcharges are demand and structural driven
- Pressure periods follow a predictable annual pattern even though dates shift
- Warning clients in advance is worth more than the saving itself
Demurrage and detention
You will learn the difference between these two charges and how to keep clients out of them.
| Demurrage | Detention | |
|---|---|---|
| What it charges for | The container occupying terminal space | The container being off-terminal and not yet returned |
| Where the box is | Inside the port or terminal | Outside — at the client, in transit, at a depot |
| Clock starts | After free time from discharge | After free time from gate-out |
| Typical free time | 3–7 days | 3–5 days |
| Charged by | Carrier, sometimes also the terminal as storage | Carrier |
Why they escalate
Both are usually tiered: a lower daily rate for the first few days, rising sharply after. The design is deliberate — carriers want their equipment back, not a rental income.
DEMURRAGE, 40' container, 7 free days
Days 1-7 free
Days 8-11 GBP 45 /day
Days 12-15 GBP 90 /day
Days 16+ GBP 165 /day
Container collected on day 10 -> 3 x 45 = GBP 135
Container collected on day 14 -> 4x45 + 3x90 = GBP 450
Container collected on day 20 -> 4x45 + 4x90 + 5x165
= GBP 1,365
Ten days late is not 2.5 times worse than four days late.
It is ten times worse.
Treating a missing document as an administrative delay. Every day the declaration cannot be filed is a day on this table, and the table accelerates. A supplier who is slow sending an invoice is not causing paperwork friction; they are costing the client money at an increasing daily rate.
Tell clients their free time expiry date at the moment of arrival, as a date, not as a number of days. "Your free time expires on Tuesday 14th" produces action. "You have seven days free time" produces a shrug and a container still sitting there on day nine.
- Demurrage is terminal time; detention is time with the box off-terminal
- Both are tiered and escalate sharply
- Give clients a free time expiry date, not a number of days
Explaining surcharges without losing the client
You will learn to communicate an increase so the client understands it rather than resents it.
Clients rarely object to surcharges themselves. They object to being surprised by them, and to the feeling that a number was invented to claw back a competitive quote.
Four rules
- Name the surcharge and who levies it"The carrier has applied a peak season surcharge of X per container from the 15th" is verifiable. "Rates have gone up" is not.
- Show it as a separate lineNever fold an increase into a raised base rate. A client who spots that once will never fully trust a quote from you again.
- Give notice, not newsTell them when you learn it is coming, not when you invoice. Advance warning is the whole difference between a partner and a supplier.
- Offer what can be doneShipping earlier, a different service, a different routing, or consolidating two shipments. Even when the answer is nothing, having looked matters.
Subject: PSS on Asia-Europe from 15 Oct - affects your Nov bookings Hi Sam, The carriers on our Asia-Europe services have announced a peak season surcharge from 15 October. On your 40'HC this adds approximately GBP 240 per container. This is a carrier-levied charge, not a change to our rates. Options: 1. Bring your November booking forward to sail before 14 October. Space is available on the 9th. 2. Ship as planned and accept the surcharge. 3. If volumes allow, combine your two November shipments into one container - that offsets most of the increase. Happy to talk it through. If option 1 works I'd need your confirmation by Thursday to hold the space.
The sentence "this is a carrier-levied charge, not a change to our rates" does a lot of work. It separates you from the increase without sounding defensive, and it is true. Use it whenever it is.
Apologising for a surcharge as though you caused it. Over-apologising suggests you had a choice and made the wrong one. Explain it, own the communication, offer options — but do not take responsibility for a carrier's pricing decision.
- Name the surcharge and who levies it
- Show it as a separate line, never folded into the base rate
- Give advance notice with options, and do not apologise for a carrier's decision
Module 4 review
A container is collected on day 20 with 7 free days, tiers at £45, £90 and £165. Roughly what is owed?
4 days at 45, 4 at 90, then 5 at 165. Tiered charges mean ten days late is many times worse than four, not proportionally worse.
You bought freight at USD 2,554 using 1.27 and margin on the job is £364. The rate moves to 1.18. What happens?
A weaker pound makes dollar freight more expensive. Small currency moves consume a large share of thin freight margins.
A carrier announces a peak season surcharge. How should you present it?
Separating the charge keeps it verifiable and keeps you distinct from the increase. Folding it into the base rate destroys trust once noticed.
Margin, Markup and Profit
Where forwarders lose money without noticing. The arithmetic is simple; the discipline is not.
Buy rate, sell rate, margin
You will learn the difference between margin and markup, and stop confusing them as most people do.
You buy at one price and sell at another. The difference is your gross profit. There are two ways to express it as a percentage and they give different answers.
Buy GBP 2,000
Sell GBP 2,500
Gross profit GBP 500
MARKUP = profit / BUY = 500 / 2,000 = 25.0%
MARGIN = profit / SELL = 500 / 2,500 = 20.0%
Same job. Same money. Two different percentages.
TO HIT A TARGET MARGIN:
Sell = Buy / (1 - target margin)
Buy 2,000, target 20% margin -> 2,000 / 0.80 = 2,500 correct
Buy 2,000, adding 20% markup -> 2,000 x 1.20 = 2,400 gives
only 16.7% margin
Being told to achieve a 20% margin and adding 20% to the buy price. On the example above that under-prices by £100 per shipment. Across a few hundred shipments a year it is a substantial and completely invisible loss, because every individual quote looks correct.
Whenever anyone in freight says "percentage", ask "of buy or of sell?" Managers, carriers and clients all use the words loosely. The question takes two seconds and removes the single most common arithmetic error in the industry.
- Markup divides profit by the buy price; margin divides by the sell price
- To hit a target margin, divide buy by (1 minus the margin)
- Adding the margin percentage as a markup always under-prices
Percentage versus fixed margin
You will learn when to price as a percentage and when a fixed amount serves you better.
A percentage margin means your profit rises and falls with freight rates. A fixed margin means it does not. Both are defensible; the choice matters more than people expect.
| Scenario | Percentage margin | Fixed margin |
|---|---|---|
| Rates double | Your profit doubles — for identical work | Profit unchanged |
| Rates halve | Profit halves — same work, less money | Profit unchanged |
| Client perception | Feels like profiteering when rates spike | Feels fair and transparent |
| Your income stability | Volatile | Predictable |
The reasoning
The work involved in moving a container is essentially the same whether the freight rate is £1,200 or £6,000. The same booking, the same documents, the same tracking. A pure percentage means you earn five times as much for the same effort in a spike — and one fifth as much in a slump, when you need it.
Most experienced forwarders use a hybrid: a fixed handling fee covering the work, plus a modest percentage on the freight covering the risk and the cash exposure.
During a period of extreme rate inflation, forwarders on pure percentage margins recorded exceptional profits, and a number of large shippers responded by bringing freight buying in-house or moving to fixed-fee arrangements. Forwarders on hybrid pricing kept their accounts. The percentage model earned more in the spike and cost more in relationships afterwards.
Charging a visible handling fee is not a weakness — it makes your pricing legible. A client who can see what your service costs, separately from what the freight costs, is far less likely to assume you are hiding margin inside the rate.
- Percentage margin moves with rates; fixed margin does not
- The work is the same regardless of the rate
- A fixed handling fee plus a modest percentage is usually the durable model
Pricing to win versus pricing to survive
You will learn when a low price is a strategy and when it is a slow failure.
Every forwarder faces this. A prospect you want, a competitor's number you have to beat, and a margin that is already thin. Pricing low is sometimes right. Knowing which case you are in is what matters.
When a low price is legitimate
- A genuine first shipment, priced to prove service, with a stated intention to review
- Backfilling a lane where you have committed volume and are running short
- A loss leader with a defined end — three shipments, then normal pricing, agreed in advance
- Where volume genuinely lowers your buy rate and the lower price is funded by a real cost reduction
When it is a slow failure
- You have not calculated the buy side properly and are guessing
- You are matching a competitor whose quote excludes charges yours includes
- You are pricing below cost hoping to raise it later — which almost never happens, because the client has anchored
- You are winning on price a client who only buys on price, and will leave for two per cent
The hardest thing to raise in freight is a price you have already given. Clients anchor hard on their first invoice. A rate you take at a loss to win an account is generally the rate you will be arguing about for the life of that account. If you are going to discount, put an explicit end date on it in writing at the outset.
A forwarder wins a regular importer by pricing 18% below their normal level, intending to correct after three months. At month four they propose an increase. The client treats it as a price rise rather than a return to normal, obtains two competing quotes, and moves.
The forwarder handled roughly forty shipments at a loss and finished with no account. Had they quoted properly and lost the tender, they would have been better off — and might have won the business later on service.
- Low pricing is a strategy only when it is deliberate, funded and time-limited
- Clients anchor on their first price and treat corrections as increases
- Any introductory rate needs a written end date from the start
Checking whether the job made money
You will learn to reconcile a completed shipment, which is how you find out what your quoting is really doing.
Quoted margin is a forecast. Actual margin is a fact, and the two differ more often than most forwarders realise, because nobody checks.
JOB RECONCILIATION - ref 2026-0884
QUOTED ACTUAL VARIANCE
Sea freight 2,011.02 2,088.40 -77.38 FX moved
Destination THC 195.00 195.00 0.00
Port security 18.00 18.00 0.00
Customs entry 45.00 68.00 -23.00 2 extra lines
Haulage 340.00 340.00 0.00
Empty return 95.00 140.00 -45.00 depot changed
Waiting time 0.00 90.00 -90.00 2 hrs at delivery
-------- -------- --------
TOTAL BUY 2,704.02 2,939.40 -235.38
TOTAL SELL 3,068.00 3,158.00 +90.00 waiting recharged
-------- -------- --------
MARGIN 363.98 218.60 -145.38
MARGIN % 11.9% 6.9%
WHAT HAPPENED
- FX not buffered: 77 lost on a 6-week gap
- Quoted 1 customs line, cargo had 3 commodity codes
- Empty return depot assumption wrong
- Waiting time recharged at 45/hr but cost 45/hr - no margin on it
WHAT CHANGES
1. Buffer FX by 2% on quotes over 4 weeks validity
2. Ask how many commodity codes at quoting stage
3. Confirm empty return depot before quoting inland deliveries
4. Recharge waiting time with a handling uplift
Reconcile every job for your first three months, then a sample of one in ten. The pattern of variances tells you exactly which of your quoting assumptions are wrong — and they will be the same three or four assumptions every time.
Recharging a cost at exactly what it cost you. Waiting time, examination fees and redeliveries all involve your admin time. Passing them through at cost means you handle the problem for free. A modest handling uplift on disbursements is normal and defensible.
- Quoted margin is a forecast; reconcile to find the actual
- Variances repeat — the same few assumptions are usually wrong
- Recharging at cost means working the problem for nothing
Spotting a loss-making quote before you send it
You will learn a pre-send check that catches the quotes that are about to cost you money.
- Is every leg priced?Against the journey map, not from memory. A missing leg is the most expensive error possible.
- Is the chargeable weight right?Volumetric checked, stackability confirmed, dimensions as packed.
- Is the currency buffered?Or the quote stated as subject to the rate on invoice date.
- Are surcharges fixed or floating?And does the quote say which?
- How many customs lines?One code or eleven changes the entry cost.
- What is excluded, by name?Demurrage, detention, examination, waiting, redelivery, storage.
- Is the validity inside the buy rate's validity?
- What is the margin in money, not per cent?Below a certain cash figure the job is not worth the operational risk, whatever the percentage says.
Point eight matters most and is checked least. A 15% margin on a small consignment may be a handful of pounds. One phone call about a delay, one amended document, one hour of waiting time, and the job is a loss. Set a minimum cash margin per shipment as well as a percentage target.
Keep the eight questions visible — on a card, a wall, a pinned note. The quotes that lose money are almost never the complicated ones you thought hard about. They are routine ones sent quickly on a busy afternoon.
- Run a fixed pre-send check on every quote
- Judge margin in money as well as percentage
- Losses come from routine quotes sent quickly, not complex ones
Module 5 review
You buy at £2,000 and must achieve a 20% margin. What is the sell price?
Sell = buy ÷ (1 − margin) = 2,000 ÷ 0.80 = 2,500. Adding 20% as markup gives 2,400, which is only a 16.7% margin.
Freight rates triple on a lane. A forwarder on a pure percentage margin does what?
The operational work is unchanged. Pure percentage pricing earns far more in a spike and far less in a slump, and it damages relationships in the spike.
You win an account at 18% below your normal rate, intending to correct in three months. What usually happens?
Clients anchor on their first invoice. Introductory pricing needs a written end date agreed at the outset, or it becomes the permanent rate.
Sending and Following Up
A correct quote that arrives badly, or never gets followed up, wins nothing. This module is about conversion.
A quote layout that gets accepted
You will learn how to present a quote so it is easy to say yes to.
Clients compare quotes side by side, often on a phone, often quickly. A quote that takes effort to understand loses to one that does not, even at a slightly higher price.
What a good quote does
- States the total firstThe client wants the number. Burying it under twelve lines of charges reads as evasive.
- Breaks charges into groups, not linesOrigin, main carriage, destination, customs. Four groups a client can follow beats fourteen lines they will not read.
- States transit and service clearlyDoor to door, with transhipment count.
- Names exclusions plainlyIn a short list, not a paragraph of terms.
- Gives validity and next stepWhat you need from them, and by when.
QUOTATION Q-2026-1184 Valid to 27 Sep 2026
Ningbo -> Birmingham, 1 x 40'HC, homeware
FOB Ningbo, delivered to your Erdington warehouse
TOTAL GBP 3,068.00
------------------------------------------------------------
Sea freight, Ningbo to Felixstowe 2,260.00
Destination port charges 213.00
Customs clearance and documentation 100.00
Delivery and container return 495.00
Transit 32-36 days port to port, direct, no transhipment
Free time 7 days demurrage, 3 days detention
NOT INCLUDED
- Duty and import VAT (est. GBP 1,680 / GBP 8,300)
- Demurrage or detention beyond the free time above
- Customs examination charges, if selected by customs
- Waiting over 2 hrs at delivery (GBP 45/hr)
- Failed delivery / redelivery (GBP 180)
- Cargo insurance - available at 0.35% of CIF +10%.
Please confirm if required; we recommend it.
Subject to space and equipment availability.
Sea freight bought in USD; converted at rate ruling on invoice date.
To book, confirm by reply. For a 9 Oct sailing I need
confirmation by Tue 30 Sep.
Notice the insurance line says "we recommend it". That single phrase is worth including on every quote. It is honest advice, and if a client later suffers an uninsured loss, the written recommendation matters to both of you.
- Lead with the total, then group charges into four blocks
- Name exclusions as a short list, not buried terms
- Always end with the next step and a deadline
Validity, terms and small print
You will learn what must appear on a quote to protect you, without burying the client.
Every quote should carry five protections, stated briefly on the quote itself rather than only in attached terms.
- Validity date — an actual date, not "30 days"
- Subject to space and equipment — a rate is not a booking
- Currency basis — fixed, or converted at a stated point
- Surcharge basis — fixed for validity, or as ruling at shipment
- Trading conditions — which standard terms you contract under, with a reference
On trading conditions
Most forwarders contract under a recognised set of standard trading conditions issued by a national trade association. These set out liability limits, time bars, lien rights and the basis on which you act. They only apply if they are properly incorporated into the contract — which normally means referring to them clearly on quotes, confirmations and invoices, and making them available.
A reference buried in a footer that nobody has ever seen may not be sufficient to incorporate trading conditions into a contract. The reference should be visible on the quote, and the conditions should be genuinely obtainable — a link, an attachment, or a copy on request. Take qualified legal advice on how to incorporate them properly in your jurisdiction.
- Five protections: validity, subject-to, currency, surcharge basis, trading conditions
- Trading conditions must be properly incorporated to have effect
- State them visibly on the quote, not only in a footer
The follow-up sequence
You will learn a follow-up rhythm that converts without becoming irritating.
Most quotes are never followed up even once. The forwarder sends it, hears nothing, and assumes the answer was no. Often the client simply got busy.
- Day 1 — confirm it arrivedA single line. "Sent the Ningbo quote this morning — shout if anything needs clarifying."
- Day 3 — add something usefulNot "just checking in". Add information: space filling on the sailing, a rate movement, a routing option.
- Day 7 — the deadlineTie it to something real. "To hold space on the 9th I'd need confirmation by Tuesday."
- Day 14 — the graceful close"Assuming this one has gone elsewhere — no problem at all. Would you mind telling me roughly where we were on price? It helps me quote you better next time."
Why the day 14 message matters
It costs nothing, it ends the thread cleanly, and it frequently gets an answer. Clients who feel no pressure will often tell you exactly why you lost — and a surprising number reply to say the project was delayed rather than lost.
Following up with "any update on this?" and nothing else. It adds no value, so it is easy to ignore, and repeated three times it becomes an irritation that damages the relationship you are trying to build. Every follow-up should carry a reason to reply.
Log every quote with its value and outcome. After three months you will know your conversion rate, which lanes you win, and which you never do. Most forwarders cannot answer any of those questions about their own business.
- Follow up four times over two weeks, each time with something useful
- Tie the deadline to a real event, such as a sailing
- Close gracefully and ask why — clients often tell you
Losing well
You will learn to extract value from a lost quote, which is where most improvement comes from.
You will lose more quotes than you win. Conversion rates in freight are often well under half. What separates forwarders who improve from those who do not is whether they learn anything from the losses.
The four reasons you lose
| Reason | What it tells you | What to change |
|---|---|---|
| Price, slightly | You are competitive; margin or buy rate is the issue | Negotiate your buy side, or trim margin selectively |
| Price, heavily | You are not comparing like with like | Check what the competitor excluded — usually a lot |
| Incumbent relationship | Price was never the deciding factor | Stay in touch; incumbents fail eventually |
| Service or capability | You could not do something they needed | The most valuable loss — it shows a real gap |
A forwarder loses five quotes in a row on the same lane and assumes they are uncompetitive. Asking on the fifth, they learn the winning quotes all excluded destination haulage, which the client was arranging separately. Their own quotes included it. They were never more expensive; they were quoting a different scope.
One question, asked once, corrected months of wrong conclusions about their own pricing.
When a client says "you were more expensive", ask what the other quote included. Very often it excluded something yours covered. That conversation sometimes wins the business back on the spot, and it always makes your next quote sharper.
- You will lose most quotes — the loss is only wasted if you learn nothing
- A large price gap usually means different scope, not a better price
- Losing on capability is the most useful signal you will get
Module 6 review
A competitor's quote is 30% below yours on the same lane. What is the most likely explanation?
A gap that large is almost always scope, not buying power. Ask what the other quote included before concluding you are uncompetitive.
What makes a day-3 follow-up effective rather than annoying?
Every follow-up should carry a reason to reply. Content-free chasing is easy to ignore and becomes an irritation when repeated.
What should the validity line on a quote say?
A date is unambiguous, and keeping it inside your buy rate's validity means a late acceptance never costs you the difference.
Course Assessment
Twelve questions covering all six modules. You need 10 of 12 correct to meet the 80% pass mark. You can retake it as often as you like.
Complete all 31 lessons to unlock the final assessment.