Background
During the past decade, world merchandise freight exports nearly tripled in value from $5.4 trillion to $16 trillion, and ocean freight remained the most common mode of transportation used for shipping these exports. Despite the current downturn in the global economy, international trade (and, consequently, ocean transport) is expected to continue expanding. Also, the growing trend of global sourcing has increased the role of ocean transport in the supply chains of most companies. The movement of ocean freight between nations is driven by a complex supply chain and involves many participants, including shippers, commercial for-hire carriers, third-party logistics providers, and consignees. The complexity of this value chain, combined with onerous regulatory requirements, has led many shippers to increasingly utilize freight forwarders as a one-stop-shop for end-to-end services. While this approach reduces operational complexity for shippers, the benefits come at a premium and include a complex pricing structure. A detailed understanding of these cost elements can help shippers identify significant cost savings.