Freight is the transportation service fee paid for the transportation of goods from one place to another by different means of transportation such as ship, plane, truck, train. Freight is equivalent to 'freight' in English. All transport documents such as CMR (road transport document, AWB (Air transport document), B/L (sea transport document) contain information about who will pay the freight.

 

Since transportation documents are a type of commercial contract, it is defined on the documents whether the transportation cost belongs to the buyer or the shipper. Who will pay the freight is also a detail specified in the loading method (Incoterm – International Commercial Terms) on the goods invoice. There are many different modes of transportation in foreign trade. It is useful to examine who will pay the transportation service fee through two examples of these transportation methods. FOB (Free on Board), one of these transportation methods, means delivery on the deck of the ship. This method of shipment also says that the transportation cost belongs to the buyer. CIF (Cost, Insurance, Freight); It is a form of shipment that includes the price of the goods, the insurance cost of the goods and the transportation cost. It is a form of shipment that states that insurance and freight costs have been paid by the sender.

 

HOW IS FREIGHT EXPRESSED IN TRANSPORT DOCUMENTS

 

In international trade, when making a purchase and sale contract, the method of payment is also decided and it is clarified which party is responsible for paying the transportation cost. The definition of 'Freight Collect' in the transportation documents indicates that the transportation cost belongs to the buyer. 'Freight Prepaid' is an expression that explains that the freight cost is paid by the sender. Although freight by definition has the same meaning in all modes of transportation, the calculation method of each mode of transportation is determined by the parameters that arise due to the nature of the business. Import and export companies decide by evaluating the condition of their cargo when deciding which way to send the goods, depending on the condition of the cargo they want to send. Main modes of transportation; road, air, sea and railway transportation.

 

HOW TO CALCULATE FREIGHT ?

 

To calculate freight, you must first decide on the method of shipment. The transportation fee, also defined as the transportation service fee, varies depending on whether the goods are sent by air, sea or land. The following abbreviations used in freight calculation are abbreviations that affect the transportation cost.

 

BAF (Bunker Adjustment Factor): It indicates that fluctuations in fuel in maritime cargoes will be included in the transportation cost.

High Cube Surcharge: This is the fee that will be added to the freight if a high cube container is used on the sea route.

IMCO Charge: This is the additional fee to be requested in case the cargo transported is a dangerous goods.

CAF(Currency Adjustment Factor): It means that exchange rate fluctuations will be added to the freight.

War Risk Surcharge (WRS): This is the fee that will be added to the transportation fee in case of war at the destination.

 

FREIGHT COST CALCULATION IN AIR TRANSPORTATION

 

Airmail is a preferred shipping method due to its short transit time. Airways are generally preferred for sending small volume and light loads as well as perishable loads. When calculating the air transportation cost, it is first necessary to determine the category of the cargo. Since the requirements of general cargo and transportation requiring dangerous goods or cold chain will be different, the freight calculation is also made differently. On the other hand, whether the goods can be stacked on top of each other is another criterion taken into account in the transportation cost calculation. After all these details are clarified, a price study is made taking into account material dimensions, gross weight and volume weight.

 

• When calculating freight in air transportation, it is calculated as 1 m3 = 167 KG.

 

FREIGHT COST CALCULATION IN ROAD TRANSPORTATION

There are two types of transportation in road transportation: partial and complete. When calculating the full load transportation cost, market conditions as well as the location where the goods originate and the destination are taken into consideration. In partial freight calculation, the weight, also referred to as chargeable weight, is taken into account. Therefore, the price calculation in road transportation varies depending on whether the material will be transported in full or partial form.

 

• On the highway, 1 m3 tonnage is considered as 333 KG.

 

FREIGHT COST CALCULATION IN SEA TRANSPORTATION

 

Freight was first used in sea and river transportation, and then it was widely used in all modes of transportation. Sea transportation is especially ideal for transporting bulky loads. Freight calculation for maritime transportation is made by taking into account the transportation costs of the cargo to be transported from port to port. When calculating freight, it is first necessary to determine the volumetric weight of the cargo. While the price calculation is made for loads that fill a container depending on whether it is a 20' or 40' container, the calculation is different for partial loads.

 

 

For partial loads, calculations are made based on pallet dimensions x container height x number of pallets x 1000 m3. This calculation gives the total volume of the load. If the total volume is more than the real weight, the calculation is made based on the volume, while if the weight is more than the volume, the weight data is taken into account.

 

WHAT AFFECTS THE FREIGHT PRICE ?

 

Transportation is the most important part of the logistics industry. The most important performance criterion of the transportation industry is that the goods arrive on time, completely and undamaged. In addition to transportation, transportation companies that offer packaging and containers according to the characteristics of the cargo also contribute to the delivery of the goods to the recipient without being damaged or spoiled with the solution suggestions they offer according to the cargo type. Freight cost is among the costs that import and export companies reflect in the product cost. Therefore, in addition to the urgency of the cargo, the cost of transportation also affects how the goods will be transported. So, it is useful to list the factors affecting the freight price as follows.

 

• Origin and destination of the goods: The long distance between the origin and destination of the goods affects the transportation cost. However, it is possible to talk about lower freight costs because transportation companies consolidate the loads, even though the distance is far in the locations where intensive shipping is carried out.
• Transit time: The time it takes for the goods to be picked up from the point of origin and delivered to the destination is the transit time of the goods. The longer this period is, the transportation cost increases in direct proportion to the time.
• Volume and weight: The volume and weight of the cargo are the most important factors that directly affect the freight calculation. When the sent cargo fills a container, the transportation cost is calculated based on the entire container. If the cargo sent does not fill a container, the calculation is made based on the partial load.
• Features of the container in which the goods are sent: Two different containers, 20' and 40', are used in land and sea transportation. On the other hand, for loads that require special transportation, such as cold chain transportation, the cost of a special container is also added to the transportation cost. Likewise, in air and sea cargo, cargo that requires special transportation has additional costs.

 

Factors affecting the freight price are conveyed in detail to buyers and senders by transportation companies. Thus, the sending company calculates the total product cost by adding the transportation cost to the product cost. In addition, it decides whether to send it by land, air or sea, taking into account the urgency of the cargo, the nature of the cargo, its volume and weight. It is important that the transportation documents include who will pay the transportation cost in case of a possible dispute.

 

Depar Trade Logistics aims to provide sustainable quality service to its customers in air, land and sea transportation. You can decide on the most suitable shipping method for the nature of your cargo by calculating the appropriate freight for your cargo by our equipped and professional staff. It promises to deliver your cargo to your desired destination at an affordable cost, on time, in full and without damage. For more information, you can contact our customer services or get detailed information on our page.