Types of Freight Rates

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Common Freight Costs and Freight Charges

Before Main Transit

Some of these charges may also apply after Main Transit.

– Cargo Insurance
– Customs Bond
– Booking Fee
– ISF Filing
– Container Fumigation Fee
– Pickup Fee
– Customs Duty (at Origin)
– Terminal Handling Charges
– Security Surcharge
– Congestion Surcharge
– Consolidation Fee

Main Transit

– Ocean Freight/Air Freight Charge
– War Risk Surcharge
– Bunker Adjustment Factor (BAF)
– Currency Adjustment Factor (CAF)
– Panama Transit Fee
– Peak Season Surcharge

Destination

– Customs Clearance Fee
– Customs Duty (Destination)
– Merchandise Processing Fee (MPF)
– Harbor Maintenance Fees (HMF)
– PierPass Charge
– Alameda Corridor Surcharge (ACS)
– Demurrage and Detention / Warehouse Fees
– Telex Release/EDI Fee
– Delivery Fee
– Chassis Usage Fee
– Container Cleaning Fee

Below are common charges that may be outlined in bills of lading or freight bills.

Consignee Collects –
The consignee, typically the buyer to whom the freight will be delivered, pays all freight charges upon receipt. The consignee is considered responsible for customs declarations and filing any taxes or forms.

Prepay and Add – The shipper pays for freight and then charges the customer. This is a good option when the shipper and carrier have a positive relationship resulting in good rates. The shipper can often negotiate better deals than the customer could do on his own.

Third Party – A third party, typically a professional logistics company, pays all freight charges rather than the shipper or consignee. This option is valuable when the order is more complicated or the consignee—the person or business receiving the shipment—is new to the business.

Cash on Delivery (COD) – The carrier collects payment at the time of delivery and then forwards the payment to the shipper to be reimbursed. The carrier usually charges an additional fee for this service.

Free-on-Board (FOB) Origin – The FOB is the moment during an exchange when the seller gives up its rights to the merchandise and the buyer accepts ownership. In a FOB charging situation, the freight becomes the responsibility of the consignees at the shipper’s dock and the consignee pays all of the associated costs.

FOB Origin, Freight Prepaid – The freight becomes the responsibility of the consignee at the shipper’s dock. The shipper pays all freight charges.

FOB Origin, Freight Prepaid and Charged Back – The freight becomes the responsibility of the consignee at the shipper’s dock. The shipper pays all freight charges and then invoices the consignee for the freight charges.

FOB Destination – The title for goods passes at the consignee’s dock and the shipper pays all freight charges. The freight is shipped prepaid.

FOB Destination, Freight Collect – The title for goods passes at the consignee dock and the consignee pays all freight charges.

FOB Destination, Freight Collect and Allowed – The title for goods passes at the consignee dock. The consignee pays the carrier’s freight charges and then deducts the freight charges from the seller’s invoice for the goods.