When ocean freight doubles, who eats the cost—your margins or your customers?
Distributors of imported glass, ceramic, and refractory products know this reality all too well: you might quote a fused cast AZS brick at $600 per ton, only to watch your margin evaporate as container rates jump from $5,000 to $9,000 in a matter of weeks. The question becomes painfully clear—should you pass that increase on to your customer?
There’s no one-size-fits-all answer. But there is a right way to think about it—and communicate it.
When Passing Costs Makes Sense
Transactional Orders
For spot buys or low-repeat transactions, customers are less sensitive to minor changes and more focused on delivery timelines. If the product is time-sensitive (e.g., heat-up bricks for kiln repair), passing through freight increases is often acceptable—especially if you explain the reason up front.
Special Order or Oversized Items
If you’re shipping 96” x 130” insulated glass units or heavy refractory monolithics that require special container configurations, these are natural candidates for cost-plus pricing. Most buyers understand that freight variability is baked into the risk profile.
When Freight Accounts for >10% of COGS
For heavy ceramics or long-haul ocean shipments, freight can swing margins dramatically. In these cases, your quotes should reflect actual landed cost, not just list price.
When It’s Better to Absorb or Smooth
Contract Clients
If you have annual agreements with fabricators or large OEMs, consistency matters. Sudden pass-through charges may damage trust—even if justified. Instead, consider smoothing: absorb some cost today and rebalance in the next pricing cycle.
Strategic Relationships
Long-standing customers who buy across multiple product lines are worth protecting. A one-time hit to margin is often cheaper than losing the account.
When Your Competitor Doesn’t Pass It On
In commoditized categories—like standard float glass or pressed ceramic plates—if you pass on costs and your competitor doesn’t, you may lose the deal. Evaluate the competitive field before adjusting price.
Strategies for Managing the Middle Ground
Use Index-Linked Freight Clauses: Tie freight surcharges to the WCI or SCFI index, so increases are seen as market-driven—not discretionary.
Create a “Freight Flex” Line Item: Separate freight impact from product cost in your quotes. This builds transparency and positions you as a trusted partner, not a price manipulator.
Negotiate Shared Risk: In large project quotes, suggest a freight ceiling and floor. If rates exceed or fall below, both parties share the impact.
Communication Is Everything
Whatever strategy you choose, how you communicate it determines whether customers accept it or push back. Be proactive. Let them know you’re monitoring rates. Provide visibility into sourcing timelines. And above all, explain that your intent is partnership—not margin maximization.
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Passing on container rate fluctuations isn’t just a pricing decision—it’s a relationship decision. For glass, ceramic, and refractory distributors, the best practice lies in knowing your customer, understanding your exposure, and building transparency into every quote. The goal isn’t to offload risk—it’s to manage it collaboratively.
