When requesting a freight quote, you might notice that the rate is “subject to GRI.” Ocean carriers periodically introduce a General Rate Increase (GRI) to adjust freight rates across major trade lanes. This affects both importers and exporters, influencing overall shipping costs. Learn more about this fee here.
What is GRI on freight quotes?
A General Rate Increase is a periodic adjustment to base freight rates implemented by ocean carriers. (Also, air freight quotes have GRIs.) These increases can significantly impact shipping costs, especially for businesses handling high cargo volumes.
GRIs are more common during peak shipping seasons when space is limited, prompting carriers to adjust rates to balance supply and demand. For example, carriers may announce a GRI of $500 per container if demand surges on trans-Pacific routes before the holiday season. Meanwhile, airfreight carriers could introduce similar increases to reflect tight schedules or rising fuel costs.
Why are there GRIs?
The ocean freight industry is highly competitive. When one carrier lowers its prices, others often follow, leading to a downward spiral in freight rates. Eventually, when rates drop too low to sustain profitability, carriers implement GRI shipping to restore margins.
When does a GRI apply in shipping?
In stable markets, GRI shipping typically occurs once or twice a year. However, ocean freight rates fluctuate based on supply and demand, sometimes leading to multiple GRIs within a year—or none at all.
In the U.S., carriers must notify the Federal Maritime Commission (FMC) at least 30 days before implementing a GRI. During this period, carriers can adjust or oppose the increase but can’t exceed the announced rate hike. It often leads to behind-the-scenes negotiations, with larger freight forwarders pushing back against rate hikes to protect their clients while smaller forwarders have less influence.
For cargo owners, GRIs create cost-planning challenges since the increase applies to all shipments, no matter when they are booked. Even cargo scheduled for departure faces these higher costs.
Do GRIs affect all countries?
General Rate Increases can apply to any region. But in recent years, they have predominantly impacted imports from the Far East, countries like China, South Korea, Japan, and Bangladesh.
For example, CMA CGM has announced that GRIs would be subject to all of Asia, including Bangladesh and Far East ports of load. The increase will also apply to ports of discharge in both the U.S. and Canada and inland points served by these ports.
What is the 2025 GRI in shipping for prime carriers?
Major carriers like Maersk, MSC, CMA CGM, and Hapag-Lloyd have announced their General Rate Increases for 2024-2025 in response to ongoing market volatility. Here’s a breakdown of what to expect:
Ocean freight carriers (General trends)
Increase amount: GRIs will vary by carrier and route, but early projections for 2025 suggest increases of $500–$1,000 per FEU on key transpacific routes, following trends from 2024.
Factors driving the increase:
- Red Sea diversions, adding 9% strain on capacity
- Fuel cost spikes
- Pre-tariff frontloading (e.g., Trump’s proposed tariffs on Canada, Mexico, and China)
Outlook: Freight rates are expected to stay elevated into mid-2025 but could stabilize if Suez Canal routes resume smoothly.
Other carrier increases
- UPS: UPS has announced an average increase of 5.9% for its Ground, Air, and International services. Additionally, Area Surcharges will apply to changes in ZIP Code zones.
- FedEx: Average rate increases include 5.9% for Express, Ground, and Home Delivery. FedEx Freight rates will rise 5.9%-6.9%, depending on the customer’s transportation rate scale. Additional increases will impact Ground Economy shipping rates, surcharges, and fees.
What is PSS? How is it different from GRI?
Peak Season Surcharge (PSS) is an extra charge for shipping rates when demand surges during peak seasons, such as the holiday season (August to December). On the other hand, GRI is a broader adjustment that carriers apply to base rates due to market-wide cost changes, regardless of the season.
Key differences:
- Trigger factors: PSS responds to short-term supply and demand imbalances when there are more shipments than available vessel space. GRI reflects long-term cost increases, such as rising fuel prices or new regulations.
- Timing: PSS applies only during peak seasons, while GRI can take effect at any time, often on a monthly, quarterly, or annual basis.
How can ASLG help you manage GRI shipping?
As a freight forwarder, Airsupply can help businesses mitigate the impact of GRIs through expertise, technology, and strategic services. Here’s how:
- Rate negotiation: Leveraging strong carrier relationships, we secure better rates and fixed contracts to shield you from sudden GRI spikes.
- Optimized timing: With real-time market insights, we advise booking shipments before GRI takes effect to avoid higher costs.
- Multimodal solutions: We offer air, sea, and rail options, shifting non-urgent cargo to cost-effective modes to reduce GRI exposure.
- Consolidation & efficiency: By combining shipments and optimizing warehousing (e.g., 3,700 sqm in Shenzhen), we lower per-unit costs and ease GRI impact.
- Advanced tracking: Our 24/7 GPS-enabled tracking provides full visibility, helping you plan shipments and avoid costly delays.
- Specialized handling: Our expertise in high-value and regulated cargo (e.g., DG, batteries) ensures compliance and prevents GRI-related surcharges.
