With the cascade of disruptions over the last few years, from COVID to the Red Sea and now new tariffs, surprise extra charges have unfortunately become a constant of shipping freight.
For SMB importers, these unexpected costs aren’t just annoying – they can seriously threaten your bottom line.
What extra charges are most common during times of volatility and how can you prevent them, or at least minimize them wherever possible?
Let’s dive in.
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Types of Unexpected Freight Costs in Times of Volatility
Freight Rates
The first change to your freight rates in times of volatility is, well, your freight rates.
For example, the Red Sea crisis led to price increases for a number of reasons. First, vessels that needed to reroute around the Cape of Good Hope faced higher fuel and operational costs due to longer transit times. But rerouting has led to elevated rates across the board because it ties up vessels for longer, requires ports around the world to adjust to changing volumes, and causes insurance rates to go up.
The Red Sea crisis has also contributed to higher air freight rates as many businesses turned to air to get their goods moving faster.
Demurrage and Detention Charges: The Silent Budget Killers
While rate increases grab headlines, demurrage and detention charges often sneak up on importers and exporters. These fees pile up when containers aren’t picked up or returned on time – which happens more often when ports get congested.
The growing reliance on trans-shipment hubs exacerbated this issue – increased cargo volumes and complex coordination of arrival and departure schedules put pressure on hubs, leading to even more congestion.
When there’s congestion, containers often sit longer at ports, racking up daily charges that can add up fast.
GRIs
General Rate Increases (GRIs) are another example. When external factors like political tensions or natural disasters create instability, the demand for shipping can become erratic, leaving shipping companies with varying cargo volumes to manage. In the Red Sea, increased risks have led to higher insurance costs and rerouting vessels, which reduced available shipping capacity. As a result, many carriers have instituted GRIs to cover elevated costs.
Tariff Shocks and Compliance Costs
Nothing has been more unpredictable lately than tariffs and customs regulations. Trump’s re-election has brought significant changes, including:
- A 25% tariff on imports from Canada and Mexico (though suspended for goods covered by USMCA)
- An additional 10% increase on goods from China
- A proposed 10% universal tariff on all imports
- A proposed 60% tariff on Chinese goods
These tariffs could hit importers hard. And beyond the tariffs themselves, there’s also the headache of customs compliance costs.
In addition, the potential implementation of the cancellation of de minimis threatens to add significant paperwork and costs to smaller shipments that used to enter the US duty-free.
Storage and Warehousing Charges
When global disruptions stretch out transit times, importers often need more warehousing space to manage their inventories. In addition, many companies have rushed to ship before tariffs hit, which means – you guessed it – a need for more storage.
So, how can companies manage all these unexpected charges and reduce freight costs in times of volatility? Glad you asked.
Staying Afloat: Strategies to Mitigate Unexpected Freight Costs
Vary Your Shipping Options
Splitting your goods between different shipping modes is more important than ever. Companies that handled recent disruptions best were those with flexible, multi-modal strategies.
This might mean:
- Splitting critical shipments between air and ocean freight
- Using different carriers rather than sticking with just one shipping line
- Looking at alternative ports when your usual route hits a snag
Build in Time Buffers
When shipping is less predictable, recalculate your timelines with extra days (or weeks) built in. Consider also keeping extra stock of critical components or fast-moving products to help weather unexpected delays.
Plan Your Supply Chain Carefully
Frontloading your goods results in higher storage costs, but waiting could mean extra tariffs. Only you know the best balance for your business. The important thing is to map out these costs as much as possible so you can make an informed decision.
Get Ahead of Warehouse Delivery
Work with your freight forwarder to plan your deliveries so your warehouse is not caught off guard, unable to receive your goods. Because if they can’t receive your goods, you will be stuck with extra charges. In cases of port delays, make sure to communicate clearly with your providers and warehouse to keep everyone up to date and adjust delivery times as necessary.
Use Digital Tools
In today’s market, good information is your best weapon. Digital freight platforms show you real-time rates, transit times, and market conditions—helping you make decisions based on facts, not guesses.
We happen to think the Freightos marketplace is a pretty good tool – to help you compare rates in real time, select the best forwarder and mode for every shipment, track your shipment, and communicate with your providers all in one platform. Plus, you can sign up for Freightos Terminal to get up-to-date rate and market insights.
Partner with your Freight Forwarder
Working together with your freight forwarder is always important, but it becomes even more so in times of volatility. Make sure to communicate early and often with your forwarder about:
Documentation
Checking that you have all your compliances in place, and that your paperwork and HS codes are accurate, can save you extra delays, hassles, and fees.
Special equipment
Making sure your forwarder knows what your goods need to be delivered means no scrambling – and extra costs – to get special equipment at the last minute,
Modes and Routes
Your forwarder can help you plan how to keep your goods moving even if your usual routes or modes are backed up or more expensive than usual. You don’t have to plan it all alone.
Changing regulations
Especially when it comes to tariffs, regulations can change fast. Speak to your forwarder or customs broker to make sure you have all the information you need.
Looking Ahead: Preparing for More Choppy Waters
The volatility we’re seeing in global shipping isn’t just a blip – it’s the new normal. Embracing flexibility, building resilience into your supply chains, and using both technology and expertise to navigate the chaos can help.
Here are some factors to look out for as we move further into 2025:
- The status of the Red Sea crisis
- Evolving carrier alliances impacting ocean shipping capacity
- Potential changes to de minimis rules impacting e-commerce shipments
- More tariff adjustments as trade policies evolve
As always, you can hop over to the Freightos marketplace to compare freight quotes in real time and secure the best rates, modes, and transit times.
