So far, in the #OceanShippingDeciphered Series, we have covered the basics of the entire freight shipping procedure. However, one thing that dominates the functioning of the industry and promotes a positive trade environment is the determination of the ocean freight quote. When one talks about the freight quote it is often understood as the basic structure of the pricing specified by a shipping line. But is that what freight quote is all about? The answer is no. The concept of ocean freight quote is a much more detailed topic and thus needs to be understood on a deeper level. Let’s get started, shall we?
Freight quote in technical terms is the detailed Proforma-Invoice raised by the Carrier / Forwarder to the shipper for arranging the movement of cargo from the place of origin to its final destination. When one talks to Importers & Exporters about their understanding of the freight quote, it is often found that for most of them the same has always been a difficult puzzle where one feels the desperate need to solve it, but even after several efforts, you lead to a surprise at the end.
When it comes to opacity in the Freight Quote for Ocean freight, it has been a big problem since long which makes it important to understand it well enough to make an informed decision.
To understand the concept better, one needs to know the right questions to ask in order to ensure that they receive an all-inclusive international freight quote with no unknown or hidden charges. There are several terms too (like DTD, DTP, PTP, and PTD) that one needs to understand thoroughly in order to understand the terms of Carriage.
Do you know how to break down the charges once you receive the proposal to make sure there are no hidden line items? Are you aware of the potential fees that might show up on your final invoice? Be in control of your international freight shipping costs by knowing how to analyze your proposal with the following breakdown.
A freight quotation can be divided into three subgroups:
Any inland movement carried out before the actual loading of the container at/near the port of loading is termed as ‘pre-carriage’.
There are several activities that take place in a containerized shipment before the delivery of the container at the port for export.
This is the term for the actual movement of cargo by the shipping line from the loading port to the destination.
Each carrier has its own list of charges depending upon the mutually agreed terms between the shipper and the carrier.
Additional charges may include the following:
Accessorial Charges, Aden War Risk Surcharge, All Inclusive, Base Rate, Bunker Charge, Currency Adjustment Factor, Cargo Data Declaration Fee, Port Dues, Destination Delivery Charge, and Detention.
Any inland movement following discharge of the container at/near the discharge port is included under ‘on-carriage’.
There are several activities that take place after the discharge of the container.
Elements of FREIGHT costs include
Freight – the amount of money due for the carriage of goods, payable either in advance or upon delivery.
Charge – an amount to be paid for the carriage of goods based on the applicable rate of such carriage, or an amount to be paid for a special or incidental service in connection with the carriage of goods.
Surcharge – an additional charge added to the usual or customary freight.
In conclusion, when one talks about Ocean freight quote, there are a lot of factors that go into the final determination of the freight cost. In addition to the above-mentioned charges, the other factors influencing freight quote include the weight of the cargo, need for a special equipment, the value of enclosed content, availability of vessels in the required trade zone, and the type of inland transport to be used for the container’s inland transportation. The concept of ocean freight quote is one that involves a thorough study of the shipper’s requirements along with the policies of the shipping line to determine the best available financial solution for both.