Detailed explanation of the composition and calculation method of overseas liner freight

Liner freight is mainly composed of two parts: basic freight and surcharge. Understanding these components and how they are calculated is critical to international trade.

Basic shipping fee

Basic freight refers to the basic fee charged for goods from the port of shipment to the port of destination, including the loading and unloading fees of the goods at the port. Depending on the nature of the cargo, liner companies usually use a variety of billing standards:

• By weight: Expressed by “W”, usually calculated in metric tons (1000 kilograms), long tons (1016 kilograms) or short tons (907.2 kilograms), called weight ton.
• By volume (Measurement): Expressed by “M”, 1 cubic meter or 40 cubic feet is a unit of calculation, also called dimension tons or volume tons.
• Weight or volume, whichever is higher (W/M): Choose the higher of the two for billing.
• AD VALOREM: Charged as a certain percentage of the FOB price of the goods, suitable for high-value goods.
• Whichever is higher among weight/volume/value (W/M or ad. val.): Choose the most expensive of the above three calculation methods for calculation.
• Weight or volume plus ad valorem freight (W/M plus ad.val.): Take the higher weight or volume first, and then add a certain percentage of ad valorem freight.
• By piece (per Head/Unit/B/L): For goods with fixed packaging or difficult to charge by weight and volume, such as cars, livestock, etc., they are charged by piece.
• Open Rate: The freight price is determined by negotiation between the two parties, suitable for bulk and low-priced goods.
• Minimum Rate: When the fee calculated based on weight or volume is lower than the minimum amount specified in the tariff, the minimum amount will be charged.

According to the general rate schedule, if different goods are mixed in one package (except containers), all goods will be charged according to the freight of the highest-charged product.

Surcharge

Surcharge refers to the additional fee charged based on the basic freight for certain special circumstances or special processing needs. Common surcharges include but are not limited to overweight surcharge, over-length surcharge, direct voyage surcharge, transshipment surcharge, port congestion surcharge, port selection surcharge, etc. The surcharge can be an absolute value or a percentage.

Calculation formula

When the surcharge is an absolute value, the liner freight calculation formula is as follows:
[ text{Liner freight} = text{Basic rate} times text{Freight tons} + text{Surcharge} ]

When the surcharge is a percentage, the calculation method is:
[ text{liner freight} = text{basic rate} times text{freight tons} times (1 + text{surcharge percentage}) ]

The above information combines the basic concepts of liner freight and its calculation methods, and is of great significance in understanding international shipping costs.