Shipping Services – Shipping Costs

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Ships are the most cost efficient way to ship steel

Shipping steel around the world can be expensive as there are lots of things to consider and many areas where a small error can cause long delays.

One of the areas of confusion is in the cost of shipping. On this page we’ll explain some of the costs involved with reference to a recent (Q3 2008) small delivery of under 20 tonnes to Singapore by conventional vessel.

Sea Freight

The sea freight is the cost of carriage from Antwerp to Singapore – in this case upon a Rickmers Linie vessel. 47% of the shipping cost.

BAF

BAF stands for bunkerage adjustment factor. The key variable cost for the shipping line is the price of fuel oil which is directly affected by the oil price. Much like alloy surcharges for some steel grades, this increases and decreases with the oil price and is how the shipping line passes on the oil price risk to its customers. In this case it was quoted as a $ value per tonne – but it can be expressed in % terms as well. BAF is generally adjusted on a monthly basis.

25% of shipping cost.

CAF

CAF stands for currency adjustment factor. International shipping charges are quoted in USD. So that list rates are not constantly varying in line with currency fluctuations CAF is added. Again like BAF it is updated on a monthly basis.

9% of shipping cost 25% of shipping cost.

ISPS

ISPS stands for International Ship and Port Security Code and is a levy imposed on shipping to cover certain security measures implemented against terrorist threats. The rate is less than €1 per tonne.

0.5% of shipping costs.

Documentation

Documentation varies depending on the order, where the steel is going to and how it is shipped. It can include the loading letter, export customs documentation and the bill of lading, EUR1, EX1, Certificate of Origin etc. The costs for each type of document are fixed and so for orders of only a couple of tonnes they can have a disproportionate impact on the cost. For larger order of several hundred tonnes they are trivial.

10% of shipping costs.

Other Costs

Customer ask us to do a variety of additional tasks including marking, packing and strapping plates and taking photos of heat numbers which are additional to our basic service. There are also certain stevedoring costs that are incurred in the loading of the vessel.

For certain destinations there are also additional charges – for example deliveries to the Persian Gulf incur a war risk charge.

7.5% of shipping costs.

In our quote to you all these charges are rolled up into a single shipping charge. We do this because our forwarder quotes us VATOS – valid at time of shipment – and we have found that most of our customers do not need or benefit from this additional level of detail. The benefit of using Oakley Steel is that you do not have to worry about these details – we take care of them for you and don’t charge you a premium for doing so: Quality where it matters.

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