Ocean Freight Rate Calculation
The rate of ocean freight shipments depends on several factors, including weight, insurance, possible customs inspections, et cetera.
How do we calculate our freight rate?
For a groupage container, we consolidate multiple groupage shipments from different owners into one container. In this case, you pay for the space utilized in the container. We calculate the rates using the Measurement/Weight (M/W) method: per cubic meter (‘measurement’) or per ton (‘weight’). It’s the same as the chargeable weight, but with a different name. For instance, 1 cbm of lead will weigh more than 1 cbm of feathers, and conversely, 1,000 kgs of feathers will take up more space than 1,000 kgs of lead.
Ensure that freight insurance is included as a separate line item. Typically, if freight insurance is not included in a transport proposal, it’s not included in the quote. When reviewing international freight shipping proposals, also check if the insurance covers door-to-door destination cargo. Often, the forwarder only covers goods from port to port, excluding all claims for transportation (freight carriage). Damage and theft often occur between the origin door and the origin or destination port and the destination. In our opinion, this is when the cargo is most vulnerable to claims. Learn more about freight insurance: are your goods truly covered?
Possible customs inspection
Customs usually conducts inspections aimed at specific issues or certain types of shipments. However, even if you are doing nothing wrong or if your goods are not subject to such inspections, you can still be affected by random inspections.
Demurrage is a fee for cargo that remains too long in a destination port. Generally, you don’t need to worry about demurrage if you know how much time you have to keep your cargo in the port, both in import and export situations. However, a problem arises when you don’t inquire about your free time in the port, or assume that the time in all ports where your cargo arrives is equal.
For example, if the country to which you are transporting your goods has longer waiting times in the port than in another country, you will incur detention and demurrage charges that you could have avoided if you had done more research. Unfortunately, demurrage can be a costly mistake, costing hundreds of dollars for each day that your goods are in the port.
General Rate Increase (GRI)
A General Rate Increase is a surcharge that carriers add to their regular base rates. A GRI can occur on all or only a few trade routes for a certain period. Typically, carriers announce updated charges at the beginning of the month and adjust rates based on the current volume situation. A GRI is always announced.
Overweight container rates
When shipping a full container load (FCL), you will incur additional charges for overweight containers.