"In export negotiations, when the requirements of the export commodities are clear, the important condition for the success of the transaction lies in whether the offer is reasonable or not; in the various indicators of the offer, in addition to costs, expenses and profits, there is also a very important factor is the freight rate.
Calculation of freight for the whole box for the whole box consignment of container goods freight charges: a method is the same as the LCL goods, according to the actual freight tonne billing. The other method, which is also more common at present, is to charge the freight according to the type of container.
In the case of a full container consignment and the container used is owned by the shipping company, the carrier has the right to charge the freight according to the "Container Minimum Utilisation" (COntainer Minimum Utilization) and "Container Maximum Utilisation" (Container Maximum Utilisation). Container Maximum Utilisation" (Container Maximum Utilization) to pay ocean freight.
Calculation of Container Minimum Utilisation
1 What is Minimum Utilisation
Generally speaking, liner conferences usually only calculate the tonnage of goods loaded in the container when charging container shipping freight, and do not charge for the weight or volume of the container itself, but there is a minimum requirement for the load utilisation of the container, i.e. "Minimum Utilization".
2 the main purpose of the minimum utilisation rate
The main purpose of the minimum utilisation rate of the container is that if the tonnage (weight or volume) of the loaded goods does not meet the specified requirements, the freight rate will still be calculated according to the minimum utilisation rate of the corresponding billable tonnes, in order to ensure that the interests of the carrier. In determining the minimum utilisation of a container, the weight or volume of the pallets is usually included. The size of the minimum utilisation depends mainly on the type and size of the container and the business strategy followed by the container liner. Of course, in the rate schedules of some liner conferences, the minimum utilisation rate of a container is usually related to the size of the box only, regardless of the type of container.
3 Forms of Minimum Utilisation Based Freight Rates
At present, there are three main forms of charging freight on the basis of minimum container utilisation: minimum loading tonne, minimum freight rate and a mixture of the two forms mentioned above.???
The minimum loaded tonne can be either a weight tonne or a volume tonne, or a percentage of the container's loading capacity (deadweight or volume). The minimum loading tonnage expressed in terms of weight tonnes or volume tonnes usually varies according to the type and size of the container, but in some cases it may be the same. When the minimum loading tonnage is determined as a percentage of the container's loading capacity, the percentage is usually the same for both the container's weight capacity and volume capacity, although it may be different.
The minimum freight rate is a minimum amount of freight per tonne or per container, of which the latter is also known as the "minimum package freight rate".
As for the mixed form of the above two forms, the minimum container utilisation rate is determined according to the following methods:
(i) A percentage of the container's weight capacity or volume capacity plus a minimum freight rate per unit volume of container or per container;
(ii) Minimum weight tonnes or volume tonnes plus a certain percentage of the container's volumetric capacity.
Calculation of Lost Container Freight
When the total weight or volume of the goods loaded in the container fails to meet the minimum weight tonnes or volume tonnes, resulting in under-utilisation of the container's loading capacity, the cargo owner will pay a loss of container freight. Lacking freight is actually the freight charged for the under-billed tonnes, i.e., the difference between the specified minimum billable tonnes and the actual quantity of cargo loaded.
In calculating the deadweight freight, the highest rate of the cargo contained in the container is usually taken as the basis for calculation. In addition, when the minimum container utilisation rate is expressed in the form of the "minimum package freight rate", if the freight rate obtained by multiplying the number of tonnes of cargo loaded in the box and the basic rate, plus the relevant surcharge, is still lower than the minimum package freight rate, the freight rate will be charged according to the latter.
Calculation of Maximum Container Utilisation Rate
1 What is the maximum utilisation rate?
The meaning of the maximum utilisation rate of a container is that when the volume tonnes of the goods carried in the container exceeds the specified volume loading capacity of the container (the container's content area), the freight rate will be charged according to the specified container's content area, that is to say, the exceeding part of the freight rate is free of charge.
2 Freight rate charged at the highest utilisation rate
If the rate level of the goods in the box only one, according to the rate charged; if the box contains different levels of goods, freight charges are usually used in the following two practices: one practice is that all the goods in the box according to the highest rate level of the goods in the box rate applicable to the calculation of freight charges; another practice is to be in accordance with the rate of the rate from the high rate to the low rate, until the total volume of the goods tonnage with the provisions of the container volume equal to the container. The other practice is to calculate the freight rate from the higher rate to the lower rate until the total volume tonnes of cargo and the content of the specified container are equal. It should be noted that if the owner of the goods does not declare in detail the contents of the box as required by the carrier, the freight charges will be based on the contents of the container, and the rate will be based on the highest rate applicable to the goods in the box. If only a portion of the contents of the box is not declared in quantity, the freight for the undeclared portion is charged on the basis of the difference in tonnes between the contents of the box and the declared freight tonnes of the goods.
3 Purpose of maximum utilisation rate
The main purpose is to encourage cargo owners to use containers for shipment of goods and to maximise the use of the container's internal volume. For this reason, in the container shipping freight calculation, shipping companies are usually for a variety of specifications and types of containers provide a container content area converted to the highest utilisation rate.
For example, the maximum utilisation rate for a 20ft container is 31 cubic metres, while the maximum utilisation rate for a 40ft container is 67 cubic metres. The reason why the maximum utilisation rate is calculated in terms of volume tonnes rather than weight tonnes is that each container has a maximum capacity and overweighting is not permitted in transport. Therefore, under normal circumstances, there should be no overweight containers, let alone encouraging the practice of overweighting.
Calculation of LCL Freight
LCL freight calculation mainly adopts "W/M" method. Usually the freight tonnage is divided into weight tonnage (W) and size tonnage (M). According to the gross weight of the goods, 1000kg is 1 weight ton; 1 cubic metre is 1 metric ton; the billing standard "W/M" means to choose the greater of the weight ton and metric ton of the goods to be billed. In theory, the default unit rate is fixed, and the solution only considers the comparison of the single variable of freight tonnage.
But in practice, different freight forwarders give the LCL rate by weight tonnes and size tonnes are often not the same, in this case we have to consider the double variables, according to different rates, freight tonnes combined calculation and then compared.
For example, if a commodity weighs 5 tonnes and has a volume of 8 cubic metres, and the "W/M" rate is USD100/60, then the final total freight rate should not be based on a comparison of W and M only, but on a comparison of 5 x 100 and 8 x 60, and the final charge of USD500 will be made according to the weight tonne rate of the one with the higher total amount.
When calculating the FCL package rate, it is important to follow the order of sequential comparison (40ft - 20ft - LCL) according to the size of the volume. At the same time, there are two aspects that must be noted: first, when it comes to LCL, it should be noted that "W/M" is the product of freight tonnes and rates for comparison, according to the LCL freight rate of the higher rate; second, the total freight rate calculation, regardless of whether it is FCL or FCL + LCL, it must be based on the total freight rate of the lowest price to the accounting.
