Freight is a significant cost for any product business, and it is negotiated less rigorously than most other major expenses — partly because the pricing structures are opaque.
Understand what makes up the rate
The quoted rate is rarely the total. Ask specifically about:
- Terminal handling charges at origin and destination.
- Documentation fees.
- Fuel surcharges, and how they are calculated and adjusted.
- Congestion and peak season surcharges.
- Customs brokerage.
- Inland transport at both ends.
- Demurrage and detention — charges once free time expires.
Demurrage and detention is where unexpected costs concentrate. Free time at the port is limited, and a delayed clearance — frequently a biosecurity hold — can generate daily charges exceeding the freight itself.
Dimensional weight
For parcel and airfreight, you are charged on the greater of actual weight and dimensional weight, calculated from the package volume.
That makes packaging a freight cost. Businesses shipping light bulky items pay for air, and reducing box size or improving cube utilisation cuts freight directly.
Worth auditing: measure your most common shipping cartons and calculate whether you are paying dimensional weight. Many businesses find they are, and that a smaller carton size changes the economics.
Sea, air and the working capital trade-off
The comparison is not freight cost alone. Sea freight is dramatically cheaper per kilogram and ties up inventory in transit for weeks; air freight releases that capital and costs more.
The full comparison includes working capital in transit, safety stock required by longer and more variable lead times, responsiveness to demand, obsolescence risk, and packaging robustness.
A common conclusion for growing businesses is a mixed approach — sea for base stock, air for replenishment of fast movers and anything time-critical.
For domestic movements, rail carries substantially lower emissions per tonne-kilometre than road and moved 17.01 million tonnes in 2024. It suits consistent volume on predictable timeframes and suits variable, time-critical freight poorly.
What is actually negotiable
Beyond rate:
- Free time at the port, which directly affects demurrage exposure.
- Payment terms, which improve your cash conversion cycle at no cost to a well-capitalised provider.
- Space allocation commitments, which matter more than rate when capacity tightens.
- Surcharge caps or notice periods before increases.
- Service level commitments with defined measurement.
- Consolidated invoicing and reporting, which reduces your administrative cost.
Building leverage
New Zealand shippers are frequently small relative to their carriers. Leverage comes from elsewhere:
- Be easy to deal with — accurate documentation, predictable volumes, prompt payment. Providers price difficult accounts accordingly.
- Consolidate spend rather than splitting across several providers for no benefit.
- Commit where you can. A forecast volume commitment is worth more than the same volume booked unpredictably.
- Get competing quotes, genuinely. This is the most effective tool available.
- Know your own numbers — volumes, lanes, weights, cube — so you can specify what you need rather than accepting a generic rate card.
Choosing a forwarder
Rate matters less than these:
- Experience in your commodity and lane, particularly biosecurity expertise, which is not uniform.
- Carrier relationships, which determine space access when capacity tightens.
- Visibility — whether you can see where cargo is without emailing.
- Financial standing, since a forwarder failure with your cargo in transit is a bad position. Check the Companies Office.
- Their trading terms, which limit liability substantially — read them rather than accept them.
Insurance is not optional
Forwarder and carrier liability is capped, usually well below cargo value, and excludes consequential loss. International carriage conventions cap it further.
Marine cargo insurance covering full value plus freight is the practical requirement, and it should cover the whole journey including inland legs. Check it aligns with your Incoterm, because there are points where neither party has arranged cover if the two do not match.
New Zealand Customs publishes tariff and border guidance, the Ministry of Transport publishes freight data under an open licence, and NZTE publishes exporter logistics material.
Figures: Ministry of Transport rail tonnage, calendar year 2024. General information only.
