Costing of maritime containerized cargo

Freight componentsFreight rates for ocean containerized cargo include the cost of transportation by sea from the port of origin to the port of destination. Usua...

Jan 24,2024 | Connie

Freight components

Freight rates for ocean containerized cargo include the cost of transportation by sea from the port of origin to the port of destination. Usually, these costs are calculated on the basis of the weight tons or volume tons of the cargo, whichever is greater, or sometimes on the basis of a minimum freight amount specified for each container.ocean lcl Specifically, containerized freight rates consist of the following components:

- Basic Freight: The base rate set by the shipping line or forwarder based on the route, flight schedule and market supply and demand conditions, usually charged according to the weight or volume of the cargo (whichever is greater).

- Surcharge: In addition to the basic freight rate, additional expenses incurred due to fluctuations in oil prices, changes in exchange rates or route adjustments, etc.worldwide cargo shipping are usually charged per container or per bill of lading. Common surcharges include Bunker Adjustment Factor (BAF), Currency Adjustment Factor (CAF), Peak Season Surcharge (PSS), War Risk Surcharge (WRS), and so on0. Surcharge (PSS), Peak Season Surcharge (PSS), War Risk Surcharge (WRS), etc.

- Harbor Charges: refers to the port-related charges incurred by the cargo at the port of origin or destination, including terminal loading and unloading operation fees, document processing fees, customs inspection fees, sealing fees, etc., which are usually charged on a per-container basis.

- Inland Transportation Charge: refers to the cost of transporting the goods from the factory or warehouse to the terminal of the origin port or from the terminal of the destination port to the location specified by the customer, usually also charged on a per container basis.

- Other Charges: Other charges that may be incurred, including demurrage, pre-pickup charges, drop charges, insurance charges, etc.

Method of Calculating Freight Charges

According to whether the goods can fill the whole container or not, the calculation of freight rate can be divided into two cases: LCL (Less than Container Load) and FCL (Full Container Load). The specific calculation method is as follows:

- LCL freight = Basic freight + Surcharge + LOCAL CHARGE + Warehouse charges + Other charges.

- FCL = BASIC FREIGHT + SURCHARGE + PORT CHARGE + INLAND TRANSPORTATION CHARGE + OTHER CHARGES

Factors affecting freight rates

- Type of cargo: Different types of cargo have different transportation requirements and risk levels, resulting in different freight rates. For example, fragile, flammable, explosive, perishable dangerous goods or special commodities usually have higher freight rates than ordinary goods.

- Quantity of goods: The higher the quantity, the lower the unit transportation cost and therefore the freight rate is reduced accordingly. Usually whole container transportation is more economical than consolidation, because it can maximize the use of container space and load.

- Weight & Volume: These two factors are the key to determine the freight tonnage, larger weight or volume of goods will take up more transportation resources, resulting in increased freight costs.

- Routes & Schedules: Different routes and schedules generate different market prices due to their different supply and demand relationships and levels of competition.less than container load Busy routes and intensive shipping schedules usually mean lower freight rates.

- Exchange rates and oil prices: these two mainly affect the amount of surcharge, the higher the exchange rate and oil price, the higher the surcharge.

- Policies and regulations: these factors affect the amount of port and miscellaneous fees, the stricter the policies and regulations, the higher the port and miscellaneous fees.

Through the above analysis, it can be seen that the container freight is not a single figure, but by a number of components, and by a variety of factors. Therefore, the following points should be considered when calculating container freight:

1. according to the type, quantity, weight and volume of the goods, choose the appropriate mode of transportation (LCL or FCL), and consider whether door-to-door service is required.

2. ask for quotations from a number of freight forwarders or shipping companies and compare the basic freight rates, surcharges, LOCAL CHARGE and other items offered by them.

3. Confirm the details of each cost in the contract and pay attention to whether there is any hidden or extra cost. 4.

4. pay attention to the changes of exchange rate and oil price during transportation, and adjust the transportation plan or budget in time.

5. comply with the policies and regulations of each country and port, and cooperate with customs inspection and seal management to reduce port charges and avoid delay.

policies shipping companies basic freight rates