Maritime trasport (part II) example

In the following picture we can find one example. A company in Spain wants to send big quantities of products to Oman. Security, price, and heavy weight are a few reasons why maritime transport the best option.

blog. photo. jpg

Source: own elaboration. Data provided by X company

It is important to consider that the sea freight from one port to another varies over time and fluctuates according to supply and demand for the different routes of international trade. Therefore, distances and travel time do not solely determine the costs.

For instance, the price of maritime freight to Shanghai from Spanish ports is currently cheaper than exporting to Turkey from Spain. The reason that maritime transport from Spain to China and vice versa is cheaper is due to the goal of shipping companies to have cheap freight by returning full containers to China, which is where is greater demand for maritime transport containers (no load must return empty). To perform benchmark price for export or import with origin or destination in Spain, one can use the fair search iContainers for international transport.

Having cheap ocean freight is a positive factor, but i the cost of land transport should be taken into account as well, since in some casesit may be decisive in the overall costs for international transportation

Furthermore, there are different terms for international transport, which are established for the customer and the seller. The most commons ones are:

EXWORKS: the client pays the transport cost

FOB:  the client pays from the suppliers port (in this case from Valencia port)

CIF: the client pays from the destination ports

incoterms

Source: http://www.businesscol.com/comex/incoterms.htm

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