Ocean freight rate, also known as “ocean shipping rate”, refers to the unit price or rate used to calculate ocean freight. It is the unit price of the services provided by the carrier for the carriage of goods by sea.
Freight rate definition
Ocean freight rate is the cost of transporting goods by sea. The sea freight rate varies according to the transportation distance, transportation route, port condition, transportation time, cargo type, cargo quantity and so on.
The average market level of sea freight rates depends mainly on the supply and demand in the market at the time, and not on the subjective will of a particular enterprise (monopoly is prohibited by the state).
Ocean shipping rate is not only the shipping company, the consignor cares about the problem, but also the international freight forwarding company cares about the problem.
Understand the basic content of the theory of sea freight, master the change law of market price and its mode of operation, is the international freight forwarding company managers and business personnel must have the basic quality.
Ocean freight charges
Sea freight charges refers to the carrier in accordance with the contract of carriage to complete the transportation of goods after the shipper to pay the cost. Simply put, it is the consignor or consignee with the shipping company or freight forwarding cooperation, when the goods are transported to the destination in accordance with the requirements of the contract, the consignor or consignee to the shipping company or freight forwarding company service fees, the specific consignor or consignee depending on their choice of trade mode.
The relationship between freight rate and ocean freight charges
After the carrier completes the transportation task, the freight will be calculated according to the ocean freight rate and ocean freight volume. At this point, the relationship between freight rates and shipping charges is easier to understand – ocean freight rates are the product of ocean freight rates and ocean freight volume.
The mathematical expression for the basic relationship between ocean freight rate and ocean freight rate is: F = R X Q; where F is the ocean freight rate, R is the ocean freight rate, and Q is the ocean freight volume.
Generally speaking, the determination and change of ocean shipping rate depends on the relationship between supply and demand of transportation services. Theoretically, the maximum freight rate cannot exceed the affordability of goods for freight, and the minimum cannot be lower than the cost of transportation. However, due to the role of the elasticity of demand for maritime transportation in the shipping market, sometimes there will be a temporary situation in which the shipping rate is lower than the cost of transportation.
In addition to freight rate, there are some ocean freight surcharges described in this article:
Factors affecting ocean freight rates
Characteristics of cargo
Cargo on the international maritime freight is the biggest impact, in the process of cargo transportation, mainly by the value of the goods, nature and weight of the impact, generally speaking if the goods are more valuable or perhaps belong to the dangerous goods, then in terms of freight will be higher, in addition if the goods are heavier, affecting the ship’s space and tonnage, the freight rate will also be relatively high.
Market situation
Shipping market structure is one of the main factors affecting the price of freight, if the transportation market is in a monopoly situation, the competition between the shipping companies will be more intense, shipping costs will have a greater impact.
At the same time, the sea transportation of goods is also divided into low season and peak season, if in the peak season, the shipping company accepts a larger number of goods, the natural offer will rise.
Freight forwarding company
Nowadays, many large freight forwarding companies can enjoy the discount on sea freight, because some cargo owners choose the international freight forwarding company and the target shipping company between the business volume is relatively large, and the relationship between the freight forwarding company and the shipping company is better, the shipping company may give a certain amount of discount.
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Port Route
The port conditions that affect the shipping rate include the port’s loading and unloading rates, port charges, port loading and unloading equipments, berth conditions, loading and unloading efficiency, management level, congestion level and security.
Transportation contract terms
Transportation conditions set in the contract of carriage, such as freight payment, responsibility for expenses, carrier’s responsibility zone, etc., will affect the freight rate.
Exchange rate
Ocean freight is mostly settled in US dollars and is therefore subject to fluctuations in the prevailing exchange rate.
