This is how ocean freight was originally spent! Calculation of container freight

In export negotiations, when the requirements are clear for export commodities, the important condition for the success of the transaction lies in whether the offer is reasonable. In the offer of the indicators, in addition to costs, expenses, and profits, there is a very important factor: freight.

 

 

For the collection of freight charges for containerized cargoes shipped in full containers, one method is the same as for LCL cargoes, according to the actual freight charges by the ton. The other method, which is also more commonly used at present, is to charge freight by container according to the type of container.
In the case of full containerized consignments, where the container used is owned by the shipping line, the carrier has provisions for payment of ocean freight on the basis of container minimum utilization and container maximum utilization.

 

1: What is the minimum utilization rate?

 

Generally speaking, liner conferences in the collection of container shipping freight usually only calculate the number of tons of goods loaded in the box but not the weight or volume of the container itself to charge, but there is a minimum requirement for the container load utilization, that is, the "minimum utilization rate.".

 

2: The main purpose of the minimum utilization rate

 

The main purpose of the minimum utilization rate of the container is that, if the loaded tons of goods (weight or volume) do not meet the requirements of the regulations, it is still the minimum utilization rate when the corresponding billing tons of freight charges to ensure the interests of the carrier. In determining the minimum utilization rate of a container, the weight or volume of the pallets is usually included. The size of the minimum utilization rate depends mainly on the type and size of the container and the business strategy followed by the container liner company. Of course, in the rate schedules of some liner conferences, the minimum utilization rate of a container is usually related to the size of the box only, regardless of the type of container.

 

3: Forms of Minimum Utilization Rate Charging

 

At present, there are three main forms of charging freight on the basis of the minimum utilization of containers: minimum loading ton, minimum freight amount, and a mixture of the above two forms.

The minimum loaded ton can be either a weight ton or a volume ton, or a percentage of the container's loading capacity (deadweight or volume). The minimum loading tonnage expressed in weight or volume tons usually varies according to the type and size of the container, but in some cases it can be the same. When the minimum loading ton is determined as a percentage of the container's loading capacity, the percentage is usually the same for both the container's weight capacity and volume capacity, but of course it can be different.

 

The minimum freight rate is set per ton or per container for a minimum amount of freight, of which the latter is also known as "minimum package freight.".

 

As for the above two forms of mixed form, it is based on the following method to determine the minimum utilization rate of containers:

 

(i) a certain percentage of the container's weight capacity or volume capacity plus a minimum freight rate per unit of container volume or per container;

 

(ii) Minimum weight tons or volume tons plus a percentage of the container's volumetric capacity.

 

 

When the total weight or volume of goods loaded in a container fails to meet the prescribed minimum weight or volume tonnage, resulting in under-utilization of the container's loading capacity, the cargo owner will pay a deficiency freight rate. Loss freight is actually the freight charged for the under-billed tons, i.e., the difference between the specified minimum billable tons and the actual number of goods loaded.

 

In calculating the deficiency freight, the highest rate of cargo contained in the container is usually used as the basis for calculation. In addition, when the minimum container utilization rate is expressed in the form of a "minimum package freight rate," if the amount of the freight rate obtained by multiplying the tonnage of cargo contained in the box by the basic rate plus the relevant surcharge is less than the minimum package freight rate, the latter shall be charged as the freight rate.

 

 

1: What is the maximum utilization rate?

 

Container maximum utilization rate means that when the volume of goods contained in the container exceeds the container's specified volume loading capacity (container volume), freight charges according to the specified container volume, that is to say, the excess part of the free freight.

 

2: The freight rate charged at the highest utilization rate

 

If the rate level of the goods in the box is only one, the rate is charged; if the box contains different levels of goods, freight charges are usually used in the following two practices: One practice is that all the goods in the box are priced according to the highest rate level of goods in the box of the rate applicable to the calculation of freight charges; another practice is to be in accordance with the rate of the high rate from the high rate of the low rate until the total volume of goods tons with the specified container volume of the container content area is equal. The other practice is to calculate the freight according to the higher rate, from the higher rate to the lower rate, until the total volume of cargo and the content of the specified container are equal.

It should be noted that if the owner of the goods does not declare in detail the contents of the box as required by the carrier, the freight will be charged according to the contents of the container, and the rate will be calculated according to the highest rate applicable to the goods in the box. If only a portion of the goods in the box is not declared in quantity, then the undeclared portion of the freight is charged as the difference between the contents of the box and the tonnage of freight declared for the goods.

 

3: Purpose of Maximum Utilization Rate

 

The main purpose is to encourage cargo owners to use containers to ship goods and maximize the use of the contents of the container. For this reason, in the container shipping freight calculation, shipping companies are usually based on a variety of specifications and types of containers and provide a container content area converted to the highest utilization rate.
For example, the maximum utilization rate of a 20-foot container is 31 cubic meters, while the maximum utilization rate of a 40-foot container is 67 cubic meters. The reason why the maximum utilization rate is volume tons instead of weight tons as a unit of calculation is because each container has its own maximum load and overweight transport is not allowed. Therefore, under normal circumstances, there should be no overweight containers, let alone encouragement of the practice of overweighting.

 

 

LCL freight rates are mainly calculated using the "W/M" method. Usually, the freight ton of goods is divided into a weight ton (W) and a size ton (M). According to the gross weight of the goods, from 1000 kg for 1 weight ton to 1 cubic meter for 1 foot ton, the billing standard "W/M" refers to the weight of the goods and the size of the ton of the two. In theory, the general default unit rate is fixed; the solution is to only consider the comparison of freight tons for a single variable.

 

But in practice, different freight forwarders give the LCL rate by weight tons, and size tons are often different. In this case, we have to consider the double variables, according to different rates, freight tons after the combination of calculations, and then compare.

For example, if a commodity weighs 5 tons, has a volume of 8 cubic meters, and the "W / M" rate is USD 100/60, then the final total freight can be calculated not only by comparing W and M, but also by the 5 × 100 and 8 × 60 comparisons, the final total of the higher weight tons of the standard charge of 500 U.S. dollars.