HOW IS SEA FREIGHT CHARGED?

HOW IS SEA FEED CHARGED?

Sea freight is the service of transporting goods by sea ship from one seaport to another. Although the shipping time is long, the freight rate by sea is cheaper than other methods, especially suitable for goods with large weight & volume. However, not all importers and exporters understand how to calculate freight by sea to optimize costs and avoid being "screamed" by logistics units.

The list of ocean freight rates is an issue that many people who need to use this service are interested in because it directly affects the company's profits because the lower the shipping fee, the higher the profit. So specifically, how to calculate sea freight, depending on what factors, the following Phat Dat Transport will help you clarify all issues.

WHAT IS SEA FREIGHT?

Similar to other types of services, when using Sea Freight Services, Enterprises need to pay all kinds of freight costs to be transferred from sender to recipient on a Container or CMB. , that's called sea freight. The difference between the distances of the roads will have some variation in freight rates, so it is possible that the sea freight rate will not be fixed.

The regulations on sea freight you need to be aware of are:

If the buyer is under FCA (delivered to the carrier), EXW (delivered at the yard), FAS (delivered alongside the ship), FOB (delivered on board) terms, the buyer needs to pay the freight in full. sea way.
 
If the buyer is under CFR (Cost plus or cost and freight), CIP (Destination), CPT (Freight to destination), DAT, DAP (Delivered at destination), DDP (Delivered). tax paid), CIF (Cost, Insurance and Freight), or other conditions existing in Incoterms 2000 such as DES, DDU, DEQ, DAF, the buyers will not need to pay the freight. sea freight and the seller is responsible for these freight.
 
What Are The Factors Influencing Sea Freight Rates?
 
The freight rate by sea is calculated based on many factors but mainly comes from customer requirements. As follows:
 
  • How much weight and size of goods need to be transported?
  • How to classify goods?
  • Where is the shipping and receiving address?
  • Are there special storage and transportation conditions? For example, frozen goods, fragile goods, etc. will have higher freight rates.
  • What is the price policy that the sea freight unit applies?
  • Additional charges are incurred due to other customer requirements. For example, when the goods arrive at the yard, they must add the costs of loading and unloading, transportation or the rental of cranes, forklifts, etc

How to Calculate Sea Freight Charges?

In fact, the price list for international sea freight will be provided to customers by the Service Company after exchanging some information about the goods with the most accurate freight rates based on the sending and receiving locations. , type of goods transported, volume of goods transported, which shipping company is selected.
 
The basis for calculating sea freight is applied according to the principle of price comparison between volume and weight, whichever is larger. Volume is in CBM and weight is in KGS. When making a comparison, the weight of the goods is weighed and the actual volume of the goods is measured, and then it decides to which value the goods are to be applied.
 
The formula to calculate the commodity CBM is applied as follows:
 
CBM = (length x width x height) x (quantity) – Unit: meters – m
Apply the conversion formula from CBM- weight in KGS
1 ton < 3 CBM => heavy goods => apply price list KGS
1 ton >= 3 CBM => light goods => apply CBM price list
(meaning to bring the weight of 1 ton of such goods to convert into how many CBMs as a basis for comparison). Convention: 1 ton = 3 CBM or 1 CBM = 333 kgs
 
You wonder why calculating sea freight according to the larger formula, carriers always have a way to benefit them whether calculated by CBM or volume:
 
For example: 20 tons of steel contained in 1 Container, 1/5 of the volume is exhausted but beyond the allowable packing limit, it cannot be packed more: 20 tons of cotton requires about 3 Containers to pack. Therefore, whichever is larger, it ensures the cost factor and the transport capacity of the carrier.
 
How is the freight by sea calculated?
The price list for sea freight is high or low depending on the weight, quantity of goods, destination, ...
 
To better understand the formula or how to calculate sea freight, you can take specific examples as follows: The export shipment consists of 24 boxes weighing 1500 Kgs. The size of the package measured per box is: 0.8 m - 0.6m - 0.5m (length - width - height)
 
According to the formula, the volume of 1 box will be: 0.8 *0.6 *0.5 = 0.24 CBM
The volume of the whole shipment will be: 0.24 * 24 = 5.76 CBM
  Compare the price we have: 1500 KGs = 1.5 tons
1 ton = 3.84 CBM Looking at the above formula, we see: the weight of 1 ton takes up a lot of area, so it will be calculated by volume corresponding to the CBM price list
Criteria for Evaluation of a Good, Quality Shipping Unit?
 
Thanks to the Cargo Service Providers, the import and export of goods to foreign markets is always quick and convenient, contributing to the economic development of the country, but in reality, there are too many transportation companies. sea on the market today. So how to recognize the quality unit? Here are the criteria to help businesses choose a reputable company to promote long-term cooperation:
 
The scale of transport operations is large, with many branches spread across the country. The customer service is dedicated and thoughtful, the behavior, working attitude before & after delivery are all professional.
 
Freight rates by sea are reasonable and publicly listed throughout the system with the best promotion and incentives for customers. High cost does not mean good service quality, customers should learn the necessary information about that company to make the most informed decision. And vice versa, businesses choose where the fee is too cheap, sometimes the quality of transportation, labor and insurance policy may not be good & complete.
 
Reputable transport units must have clear commitments, if unfortunately there is a risk during transportation, there will be a policy to compensate 100% of the value of the goods to customers to minimize any disputes. later legal.
Insurance regime, delivery time on schedule are also criteria to evaluate the service quality of a shipping company.
 
Thus, it can be seen that sea transportation is a mode of transportation that not only has a large cargo load but also helps to save maximum costs compared to conventional modes of freight transport. Especially for countries with seaports, sea freight transport has been contributing to effective economic growth. Hopefully, through the sharing on how to calculate sea freight, how to classify items to determine the sea container shipping rates as well as how to calculate the most accurate sea freight charges, will help you. businesses, shippers can anticipate all costs to be paid as well as costs incurred