Types of Freight Rates

Apply for International Logistics Certification Now!!

The types of fright rates observed in regular business transactions are.

• Advance freight: This is payable in advance, before delivery of goods – used in liner cargo trade and tramping.
• Lump sum freight: This is payable for use of whole or portion of a ship.
• Dead freight: Damage claim for breach of contract by the charterer to furnish a full cargo to a ship
• Back freight: If the goods on arrival are refused then the freight charged for the return of the goods constitutes back freight.
• Pro-rata freight: If circumstances make it impossible to continue the voyage further and the shipper accepts delivery at intermediate port, pro-rata freight is charged.

Sea freight calculations can broadly be divided into two main components; break bulk and containerized.

• Break bulk cargo: Break bulk cargo, is cargo that is unitised, palletised or strapped. This cargo is measured along the greatest length, width and height of the entire shipment. The cargo is also weighed. Shipping lines quote break bulk cargo per weight/measure, which is either per metric ton or per cubic metre, which ever yields the greatest revenue.

All shipping lines carrying cargo in a break-bulk form insist on payment based on a minimum freight charge which is equivalent to one freight ton, one cubic metre or one metric ton.

• Containerized: Freight rates for containers are based on the container as a unit of freight irrespective of the commodity or commodities loaded therein, (FAK) Freight All Kinds. The shipping lines quote per box (container) either a six or twelve metre container