Ocean freight makes up about 90% of the world’s trading, it’s the main transport mode for global trade. It does move the world, however, there is a lack of awareness on the costs of international maritime shipping and the different types of costs and conditions there are in freight rates.
Freight rate,or the cost of transporting goods, is a price at which a certain cargo is delivered from one point to another, via shipping lines between ports of loading and ports of discharge. There are different types of freight rates, depending on loading and unloading costs, length of the process, and they vary according to the supply and demand of the market.
Next we will list and define a series of international sea freight rates the shipping company takes when transporting goods. They include cargo loading costs, discharge costs, transport and international freight rates. It should be noted that the information is approached from the perspective of the shipping company.
There are several forms of shipping service that are of importance when calculating sea freight rates: door-to-door, port to port, door to port or port to door.
The characteristics for each one of these freight rates types are as follows:
Liner terms refer to the set of conditions under which a shipping company will transport goods (loading of the vessel at the origin port, stowage of the cargo, transport and discharge at the port of destination). It includes the amount payable for freight, the cost both for loading and discharge of the cargo from the vessel which will vary in accord to the regulations at each port or the laws governing different countries. Customer’s responsibility is to deliver the cargo by the ship and then the stevedoring professionals will take over, lifting and loading the cargo inside the vessel.
Liner terms include the lifting, loading and unloading as part of the freight rates. Anything prior to the hooking of the cargo at origin port or after it at destination is excluded from the service, also known as Hook-to-Hook.
Includes transport, and stowage and unload at destination port. The costs of load and stowage at the port of origin are not included.
The opposite of Free In, includes loading the vessel, stowage at origin port and transport. It indicates that the consignee (recipient) is responsible for the cost of unloading cargo from the vessel at the destination.
Free In and Out (FIO)
Sea transport only, indicating that loading/discharging costs are not included in the freight. The carrier is not responsible for the cost of loading and unloading goods onto/from the vessel. It being the duty of consignees to place the cargo on board the vessel and likewise take delivery from alongside at the port of destination, in each case free of charge to the vessel.
Free In Out and Stowed (FIOS)
Includes transport and stowage on board ship. This freight rate only covers the actual transport. Neither the loading, unloading or stowing of the goods onboard the ship are included in the freight rate. These costs are payable separately, both by the shipper and the recipient.
Free In, Out, Stowed and Trimmed
Similar to FIOS, the vessel owner is not responsible for the costs of loading, unloading, stowage, or trimming.
Free In / Liner Out (FILO)
The shipper is responsible for the loading of cargo into the vessel and the shipowner is responsible for the transport and unloading of cargo at the port of discharge.
Liner In / Free Out (LIFO)
In which the shipowner bears all costs for loading, stowing and trimming the cargo and all the costs incurred for the discharge are to be borne by the charterer, or receiver, or consignee.
International freight terms are varied and of many names depending on the distribution of the different generated costs when transporting a shipping container from origin port to destination.
The price of freight rate changes and fluctuates, taking into account the actual size of the container, the category of the goods transported, the risk of the route, the duration of the journey, stevedoring costs or port services. It’s worth noting the variation in cost due to international trade flux; rates and terms are not the same when exporting from Europe, America, Asia than when importing from eastern countries.
Do you have any doubts on the different types of freight rates? Would you like to know the freight rate costs for your next shipment? Care for an estimation on international trade costs before signing on a specific line, date, shipping company or a freight forwarder? Do not worry. We cover all your needs with more than 30 years of professional experience at your service.
Our mission is simple: We solve your problems and improve the efficiency of your projects. We do this by providing general, comprehensive service to vessels on different freight rates for the shipping lines that are found between the main ports in Western Africa and Southern Europe. Suisca Group is the trustworthy partner for your business.