What is freight in logistics?

Successful foreign economic activity is not complete without cargo transportation. The amount of income from the transaction, its success and security are also affected by the method and terms of delivery, the choice of the carrier. To get the maximum profit, to be well versed in all stages of cargo transportation, its clearance, you need to know about all the intricacies of freight. To do this, it is important to understand the wording of the term, the nuances of the formation of rates and the terms of the freight agreement.

What is a freight?

Freight is the payment for the transportation of goods, which occurs in accordance with international laws and signed agreements. In other words, this term means a delivery fee. The invoice that the charterer receives from the shipowner depends on the dimensions of the cargo, the complexity of transportation, and the chosen route of transportation.

Freight in logistics refers to sea and air transport. This method applies to the delivery of large-sized products. It is allowed to transport cargo from several tons on an aircraft, and up to several hundred tons on a sea vessel. The transported cargo can be the most diverse:

dangerous;
loose;
in need of special conditions.

Standard carriage and freight are different concepts. The procedure provides for payment not for the transportation of goods, but for the use of the vessel.

An agreement between the charterer and the shipowner is mandatory. The following points are mandatory in the document:

conditions for the distribution of costs during transportation;
whether the final cost includes loading/handling of products;
responsibility of the parties, including for transportation and insurance, unloading and loading, paperwork at the port terminal, customs clearance.

Varieties of freight

Depending on the transport used, the freight can be:

maritime;
air;
multimodal (involves the use of several modes of transport).

Along with this, two separate categories are distinguished: domestic and international freight (the first provides for transportation within the country, and the second abroad). Let’s analyze each of them in more detail.трішній та міжнародний фрахт (перший передбачає транспортування в межах країни, а другий за кордон). Розберемо більш детально кожен із них.

Sea freight

This type provides for the transportation of products in containers by ship by sea. The final cost is affected by the route and dimensions of the cargo. There may be a surcharge in case of additional expenses by the shipowner (change in the price of fuel, surcharge for cargo handling, preparation of documentation related to the loading and unloading of goods).

It requires the following list of documents:

packing list (it contains information about the cargo being transported and the package);
bill of lading (the rights of the goods owner are indicated);
sea waybill (states the existence of a contract, according to which the carrier undertakes to deliver the products to the place of receipt);
navigational receipt (confirms the transfer of cargo from the carrier to the recipient).

Among the advantages of such a freight are:

high product safety;
good throughput;
relatively low cost of transportation compared to other modes of transport;
large capacity, which allows you to transport tons of goods in one flight.

Cons of chartering a sea vessel:

following is carried out according to a certain schedule, so delivery can take a lot of time;
possible delays in transportation due to changes in weather conditions;
low speed of movement of a sea vessel;
delivery only to the port (to move the cargo further, you will have to pay for additional transport services).

Air freight

The freight rate is formed based on the cost of transportation, which is influenced by the size of the product, its weight, name, type of packaging. Airfreight provides for 3 types of additional surcharges: fuel charge, cargo density (from 163 kg/m3) and safety. The standard package includes:

packing list (contains information about the cargo, its name and dimensions);
invoice (item name, quantity, cost and description);
air waybill (confirms the existence of a contract, it contains all the conditions of chartering, the rights and obligations of the parties);
Safety Data Sheets;
cargo manifest (data about the cargo on the current trip).

The advantages of air freight include the following:

you can deliver to any city where the airport is located;
high safety of transportation;
Fast shipping.

Disadvantages of air freight:

there are restrictions regarding the carrying capacity of aircraft;
there are bans on the transportation of certain types of goods;
high cost compared to other modes of transport.

Freight Cost Factors

The freight rate corresponds to the cost of transportation of one freight unit of cargo, depends on:

distance between the point of departure and arrival;
route complexity;
the presence of risks along the route of transport;
characteristics of the cargo (oversized, dangerous, needs a special temperature regime);
the amount of insurance;
the need for additional services (loading and unloading, forwarding);
weight and volume thenvara;
seasonal and weather conditions;
epidemiological situation;
availability of free vehicles.

How to calculate freight?

When calculating the cost, it is important to take into account the complexity of the route, its length, as well as the characteristics of the cargo. Freight valuation can occur in two ways:

based on the rate (freight rate);
in case of charging a fixed fee (lump sum).

The freight rate is affected by the criteria for assessing the cargo. For example, for the transportation of small, piece and groupage cargo, special containers will be required. In this case, the rate will be equal to one container.

Based on the contract, the freight is estimated according to:

units of volume occupied (some carriers set additional requirements regarding the minimum and maximum volume of cargo, its density, but most often they relate to liquid and bulk products);
units of weight (concerning the valuation of bulk goods);
cargo places (this applies to huge equipment that is unrealistic to be placed in a container of standard sizes).

In addition to the trivial rate (BAS), there may be auxiliary surcharges: