Empresa de logística internacional

What is a GRI? And how to avoid it

Everyone at some point in our professional career in the international logistics world has heard the term GRI, which strictly means “General Rate Increase” essentially it is an increase that shipping companies handle for sea freight.

 

 

The GRI happens when the levels are very low in the market and the shipping companies want to recover resources but mainly it is a measure to avoid some type of monopoly that can be generated provoking an advantageous situation for a single shipping company, the GRI are decided in a unanimous way applying all the increase agreed by TEU in the agreed date.

Usually the shipping companies in a market that behaves stable, implement few increases but in recent months so far in 2017 there have been many increases (approximately every fortnight) and could arise because there is very little demand and an excess of supply causing that the rates have to drop sharply and the only way that the shipping companies can recover healthy levels for their operations is by applying a GRI whenever they deem necessary.

The truth is that in many cases freight costs are usually decisive when buying or not; although they are announced at least 2 or 3 weeks in advance.

Our best advice is to have an elaborated schedule and coordination of the next loads both with the supplier and with the freight forwarder, keep in mind the dates with a detailed forecast to avoid any surprise or cost that has not been considered from the beginning.

Francisco Escorcia
Pricing Area

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