Before talking about ocean freight, let's talk about some basic concepts of ocean freight. Ocean freight can be divided into full container and LCL. Full container is divided into 20GP, 40GP and 40HQ. LCL is generally used in bulk cargo shipment. Based on the concept of appeal, let's look at the case of full containers first.

1. Calculation of full container shipping cost

For the whole container consignment of container cargo freight charges:

1). Same as the LCL cargo, according to the actual freight tons billing.

2). Another method, but also the more common method, according to the type of container, charging freight by the box.

In the case of full container consignment container cargo and the use of the container for the shipping company, the carrier has the "minimum utilization rate of the container" and "the highest utilization rate of the container" to pay shipping freight provisions.

2. The minimum utilization rate of the container calculation

1). What is the minimum utilization rate?

Generally speaking, the liner guild in the container shipping freight usually only calculates the number of tons of goods contained in the box, and not the weight or volume of the container itself to charge, but the container loading utilization rate has a minimum requirement, that is, the "minimum utilization rate".

2). The main purpose of minimum utilization rate

The main purpose of the minimum utilization rate of the container is, if the number of tons of loaded goods (weight or volume) does not meet the requirements, then the minimum utilization rate of the corresponding billing tons to ensure that the interests of the carrier to calculate freight. In determining the minimum utilization rate of the container, usually to include the weight or volume of the cargo board. The size of the minimum utilization rate depends mainly on the type and size of the container and the business strategy followed by the container liner. Of course, in some liner conferences' rate schedules, the minimum utilization rate of a container is usually related only to the size of the box, regardless of the type of container.

3). The form of minimum utilization rate charging freight

At present, according to the minimum utilization rate of the container freight charges in the form of three main: the minimum loading tons, the minimum freight amount and the above two forms of mixed form.  

The minimum loading tons can be weight tons or volume tons, or can be a percentage of the container loading capacity (load or volume). The minimum loading tonnage expressed in weight tons or volume tons is usually different depending on the type and size of the container, but in some cases can also be the same. And when a certain percentage of the container loading capacity to determine the minimum loading tons, the ratio for the container load capacity and volume capacity is usually the same, of course, there are not the same.

Minimum freight amount is per ton or each container to provide a minimum amount of freight, the latter is also known as the "minimum package freight".

As for the above two forms of mixed form is based on the following methods to determine the minimum utilization rate of the container: container load capacity or volume capacity of a certain percentage plus the container unit volume or each container to provide the minimum amount of freight; minimum weight tons or volume tons plus container volume capacity of a certain percentage.

3. The highest utilization rate of the container calculation

1). What is the highest utilization rate?

The meaning of the highest utilization rate of the container is, when the container contains the volume of the goods tons more than the volume of the container away loading capacity (container volume), freight charges according to the provisions of the container volume, that is to say, more than part of the free freight charges.

2). What are the freight rates charged for maximum utilization?

If there is only one rate level of cargo in the box, it is charged according to the rate; if the box contains different levels of cargo, the following two practices are usually used to charge freight: one practice is to calculate freight rates for all cargo in the box according to the rate applicable to the highest rate level of cargo in the box; another practice is to calculate freight rates according to the high rate, from the high rate to the low rate, until the total volume of tons of cargo and the specified container content volume of the goods and the specified container content equal.

It should be noted that if the cargo owner does not follow the carrier's requirements, detailed declaration of the goods contained in the box, the freight is charged according to the container volume, and, the rate is based on the highest rate applicable to the goods contained in the box. If only part of the goods in the box is not declared quantity, then, the freight of the undeclared part is charged according to the difference between the inner volume of the box and the freight ton of the declared goods.

3). The purpose of the maximum utilization rate

Mainly to encourage shippers to use containers to ship goods, and can maximize the use of container volume. For this reason, in the calculation of container shipping freight, shipping companies are usually for a variety of sizes and types of containers to provide a container content of the maximum utilization rate converted.

As mentioned in the previous article, the maximum utilization rate of 20ft container is 31 cubic meters, while the maximum utilization rate of 40ft container is 67 cubic meters. The reason why the maximum utilization rate is calculated in volume tons instead of weight tons is because each container has its maximum load weight, and overweight is not allowed in transportation. Therefore, under normal circumstances, there should not be overweight containers. 

4. Calculation of loss container freight

When the total weight or volume of the goods loaded in the container does not reach the minimum weight tons or volume tons, and the container loading capacity is not fully utilized, the cargo owner will pay the loss box freight. The loss box freight is actually less than the billing tons, that is, the difference between the minimum billing tons and the actual number of loaded goods.

In the calculation of the loss of freight in the box, usually the highest rate of the goods contained in the box for the standard calculation. In addition, when the minimum utilization rate of the container is in the form of "minimum package freight", if the freight rate is still lower than the minimum package freight rate by multiplying the number of tons of cargo carried in the box with the basic rate and adding the relevant surcharge, the freight rate will be charged according to the latter. 

5. Calculation of LCL freight

The freight of LCL cargo is usually measured in weight tons (W) and foot tons (M). The measurement standard of weight ton is 1000 kg = 1 weight ton; the measurement standard of volume ton is 1 cubic meter = 1 foot ton; the final measurement is chosen in accordance with the larger of the two.

But in the actual business, different freight forwarders give the LCL rates by weight tons and foot tons are often different, in this case we have to consider the dual variables, according to different rates, freight tons combination calculation before comparison.

For example, if the weight of a commodity is 6 tons and the volume is 9 cubic meters, and the rate of "W/M" is USD100/60, then the final total freight amount should not only be compared with W and M, but also with 6×100 and 9×60, and finally USD600 will be charged according to the standard of the higher total weight ton.

The calculation of FCL package rate is according to the size of the volume in accordance with the (40 feet - 20 feet - LCL) sequential comparison order. At the same time, there are two aspects must be noted: First, when it comes to LCL, we must pay attention to "W/M" is the product of freight tons and rates for comparison, according to the higher LCL freight rate; Second, when calculating the total freight, regardless of FCL or FCL + LCL, must be the lowest total freight rate to account for.

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