Core conclusions:According to the SCFI report dated October 16, 2026, which states that a freight charge for transporting a shipment of 40HQ containers to the Western United States amounts to $7,525. Converted to RMB, this figure becomes approximately 50,600 yuan. If each container carries 800 items, and the freight per item is 63 yuan, then the total freight cost would be further reduced. However, if only the freight cost is mentioned in the quotation, without considering other expenses such as port charges and destination fees, the actual cost of shipping will increase by 15% to 25% (in this case, it ranges from 7,600 yuan to 12,700 yuan). This means that by making such a quotation, one could potentially earn an additional profit of 2 to 5 percentage points at the time of signing the contract.
1. Sea freight rates aren’t a fixed price; they’re calculated by adding up individual costs, totaling five yuan each.
The factory asked the freight agent how much it would cost to get the goods to Los Angeles. The agent replied, “7525.” This represents the total freight charge collected by the shipping company (O/F). Of course, this is just the first part of the total cost, which amounts to five dollars. The complete cost of delivering a full container includes additional fees, charges at the port of departure, costs at the destination port, and any necessary trucking services for transporting the goods inland.
- Main freight costs:The freight charges that shipping companies collect based on the routes and types of containers they handle fluctuate with the SCFI weekly index. This amount changes every week, ranging from five units per week.
- Additional fees:Fuel costs (BAF), peak season conditions (PSS), port congestion, low-sulfur fuel, etc. All of these factors will result in additional charges, calculated based on the number of containers or the tonnage involved. During the peak season, adjustments can be made twice a month.
- Transit fees at the port of departure:Fees for dock operations, documentation fees, booking fees, sealing fees, customs clearance fees, and transportation costs from the factory to the port are charged based on the number of containers. These fees are not affected by changes in freight rates.
- Cost at the destination port:Charges related to operations at the destination port, document exchange fees, and container handling costs. Under CIF terms, these expenses are usually borne by the buyer. However, if these charges aren’t clearly stated on the invoice, customers may bring these issues up with you later.
- Inland section:The transportation by truck or rail from the factory to the port of shipment, and from the port of destination to the consignee’s warehouse, is often more expensive than shipping by sea. This method of transportation is especially costly in inland countries, such as the central United States and other inland regions of Europe.
Among the five items, only the base freight rate is subject to fluctuations based on market conditions. The other four items are generally fixed at the time of signing the contract. Many misprices occur not because of errors in calculating the freight rates, but rather because only the first item is calculated correctly.
II. First item of account: Calculate the total cost per cabinet. First, consider the current freight rates.
The FCL shipping method is the simplest: one price for each container. The current freight rates for major routes are as follows. These figures are taken from the SCFI report released by the Shanghai Shipping Exchange on October 16, 2026. The SCFI index was 3679.58 points, up by 15.47 points or 0.42% compared to the previous period. This represents a two-week consecutive increase in freight rates.
| Airline routes (box-shaped) | 2026-10-16 Shipping Rates | Expressed in RMB (at the rate of 6.7195) |
|---|---|---|
| Meixi Basic Port (40HQ) | 7525 US dollars/FEU | 5.06 million Yuan |
| East Coast US Port (40HQ) | 10,405 US dollars/FEU | 6.99 million Yuan |
| European basic port capacity (20GP) | $2335 per TEU | 1.57 million Yuan |
| Mediterranean Basic Port (20GP) | $3250 per TEU | 2.18 million Yuan |
| South America (20GP) | $5,529 per TEU | 3.72 million Yuan |
| Southeast Asia (20GP) | $1156 per TEU | 0.78 million Yuan |
During the same week, there was a significant differentiation among shipping routes: Europe saw an increase of 2.7%, the Mediterranean region increased by 8.3%. Meanwhile, routes to Latin America decreased by 0.8%, while those to the United States east of the Mississippi River fell by 1.1%. South America’s routes declined by 6.7%, and routes to Australia and New Zealand decreased by 7.6%. This means that the “quotes from last month” are no longer valid in different markets—the old quotes for routes to the United States can still be used for another two weeks, but those for routes to the Mediterranean region may now be 8 percentage points lower. In terms of settlement rates, there is also the Shanghai Export Container Settlement Index (SCFIS). On October 19th, the European route index was reported at 2154.77 points, a decrease of 4.9% compared to the previous month. This indicates that long-term quotes should be based more on the settlement index, as it reflects the actual costs involved in shipping operations.
III. Second item: Consolidated shipments are charged based on the tonnage used, while goods that need to be disposed of are charged based on their volume.
Less-than-container load (LCL) is calculated based on the volumetric weight rather than the actual volume of the goods. The volumetric weight is determined by taking the larger of the volume in cubic meters and the weight in tons. For example, a shipment of household items with a volume of 5 cubic meters and a actual weight of 2 tons will be charged based on 5 tons, not 2 tons. Conversely, a shipment of jewelry with a volume of 1.2 cubic meters and an actual weight of 3 tons will be charged based on 3 tons.
There are two rules that are often overlooked when dealing with consolidation shipments: First, there is the issue of minimum billing weight. On most routes, the calculation starts from one billing ton, and even 0.3 cubic meters are considered as one billing ton. Second, the cost for consolidation at the destination port is calculated per ticket (including unpacking, distribution, and documentation). A shipment of 0.5 cubic meters costs approximately the same as a shipment of 5 cubic meters. Therefore, the logistics cost per item for small-scale consolidation shipments is often 2 to 3 times higher than that for larger containers. This cost should be calculated separately during bidding, and the unit price of the container should not be applied directly to consolidation shipments.
IV. The third item: allocating the cost of the cabinet to each individual product.
Taking the case of shipping from 40HQ to the West Coast as an example: the main shipping cost is 50,600 yuan. There are 800 items to be packed in the container, with each item costing 63 yuan. If we consider a surcharge of 15% to 25% for additional costs related to transportation and destination ports, then the total logistics cost per item becomes 73 to 79 yuan. This amount should be included in the quotation, rather than simply being listed under “Additional Shipping Costs”.
When calculating the net load capacity, it is necessary to use the actual size of the container, not the theoretical volume. For example, a 40HQ container has a theoretical volume of about 68 cubic meters, but the actual load capacity is usually only 58–62 cubic meters. A 20GP container has a theoretical volume of about 28 cubic meters, but the actual load capacity is typically 24–26 cubic meters. If the number of items per container is calculated based on the theoretical volume, the freight cost per item will be underestimated by about 10%. In other words, for a 800-item container, the difference in freight cost would be equivalent to the freight cost for 80 items.
V. How to derive CIF values from FOB prices: An example for orders worth $50,000
If the customer requires the CIF price, you cannot add an estimate of the freight cost to the FOB price. The standard calculation for CIF is: CIF = (FOB price + freight cost) ÷ (1 – insured value × insurance rate). Using a FOB price of $50,000, freight costs of $7,525 for a 40HQ container shipped to Los Angeles, an insured value of 110%, and an insurance rate of 0.6%, the calculated CIF price would be: CIF = ($50,000 + $7,525) ÷ (1 – 1.1 × 0.6%) ≈ $57,907. The insurance cost would be approximately $382.
On the other hand, if the customer requests a CIF quotation, but you submit a quote based on the FOB price, which is $50,000, the difference would be $7,907. At a rate of 6.7195, this translates to approximately $53,100. You can either keep this money for yourself, or you can have a dispute with the customer during the billing process. The most error-prone aspect of a CIF quotation is the insurance base: insurance is typically calculated based on 110% of the CIF price, not the FOB price. If the premium is calculated based on the FOB price, it will be more than 10% lower.
VI. The four lines on the quotation form must be clearly stated.
- Trade terms with full name of destination port:Please write “CIF Los Angeles, Incoterms 2020”. Do not simply write “CIF” alone.
- Validity period of the freight rate:During the regular season, the storage period is 7 to 15 days; during peak seasons, it’s 3 to 7 days. The SCFI rates change every week. In October, the rates increased for two consecutive weeks. If the validity period is set to 30 days, then the user is actually taking on the risk of freight costs for four weeks.
- Attribution of additional fees:Please indicate whether the service includes BAF or not, or whether all additional fees are included. This information helps determine who will bear the cost when shipping companies raise prices during peak seasons.
- Exchange rate benchmark and renegotiation line:It is noted that this order will be calculated based on the rate of 6.7195. If the exchange rate fluctuates by more than 2%, both parties should discuss the matter again to avoid losing profits due to changes in the exchange rate during payment.
VII. Four of the most common pitfalls
- Please calculate the freight based on CIF:Only the main freight cost is included; all other costs such as those at the port of shipment and in the destination port are omitted. As a result, the total cost to deliver the goods to the customer’s location is 15% to 25% higher than the quoted price.
- Using off-season pricing strategies for an annual framework:The price was locked in September. In October, prices in the Mediterranean region increased by 8.3%. As a result, the annual price framework immediately reversed. It should be agreed that the price should be adjusted according to the SCFI formula.
- Report the inventory at actual weight:For products that are large in size and light in weight, the shipping cost is calculated based on tons. In reality, however, the cost is calculated based on cubic meters. It’s common for the shipping cost to be underestimated by half.
- The costs associated with the destination port are not specified as belonging to which category:The costs associated with the destination port charges and document conversion fees under CIF are borne by the buyer. However, if these costs are not specified in the quotation, the buyer will have to bear them personally if the client refuses to pay.
common problems
1. How often does the sea freight cost in the quotation need to be recalculated?
During the regular season, calculations are updated every 15 days, based on the latest SCFI data. During peak seasons (from September to January of the following year, around Canton Fair), calculations are performed once a week. The same quote must be calculated separately for customers in different markets; no one should use the US-based pricing for Mediterranean routes.
2. If the customer specifies a particular freight agent, should the freight cost be included in the quotation?
It needs to be calculated, but it should be separated into two columns: the freight charges assigned by the customer to the freight forwarder should be listed exactly as per the freight forwarder’s quotation, with a note indicating that “the freight charges shall be settled by the freight forwarder designated by the buyer”. You will only be responsible for the transportation costs and customs clearance fees. This way, there is no need to exaggerate the costs, and you won’t be held accountable if additional fees are imposed.
3. What is the volume of the boundary between consolidated shipments and individual containers?
The standard capacity is between 13 and 15 cubic meters. If the volume is less than 13 cubic meters, using combined shipments can be more cost-effective. If the volume exceeds 15 cubic meters, the unit cost of using a full container becomes lower. For capacities between 13 and 15 cubic meters, it’s necessary to calculate both options based on current shipping rates. For orders with a large volume of goods and high value, using 20GP containers is a better choice, as it reduces the risk of damage during transshipment and unpacking.
For factories that handle the export of heavy goods such as machinery and home furnishings materials, maritime freight costs aren’t something that can be dealt with by just one department within the logistics department. It’s a cost item that changes weekly based on the latest SCFI calculations. It’s more cost-effective to recalculate the costs once per week, rather than negotiating additional fees by 3 percentage points during negotiations.
Data sources: Shanghai Shipping Exchange SCFI (October 16, 2026), China Foreign Exchange Trade System RMB exchange rate midpoint (October 22, 2026). For customized Dual-Track Customer Acquisition solutions, please contact 180-0327-6609. Qihang Zhilian Foreign Trade Research Institute – Let Chinese innovation set sail overseas.
