Sea freight

What is sea freight?

Sea freight is, in fact, the lease of a place for transportation of the cargo on a ship of the shipping line. This is a fee for shipping the cargo from the place of departure to the place of destination. Most often, in the conditions of the modern market economy, sea freight is popular on the routes China - Novorossiysk, Turkey - Novorossiysk, Japan - Novorossiysk, Vietnam - Novorossiysk, and so on.

Container freight

Very often, sea freight is synonymous with the concept of "Container freight", since on ships of shipping lines the cargo is most often transported in containers because of the convenience of their storage, accounting, transfer and reloading. The most common are 20- and 40-foot containers. Almost any cargo can be placed in such a container: from food products to complicated high-tech equipment. Modern requirements for the production of sea containers are regulated by the requirements of ISO 668 standard.

What legislation regulates sea freight

Sea transportation is very difficult to regulate legally. This is dictated by the fact that international sea transportation is carried out in the waters of the world ocean. The jurisdiction of any of the states does not apply to them in 80% of cases. This situation has developed a special maritime law that regulates the status of ocean and sea areas, human rights at sea, rules for the transportation of goods, shipping regulations, and much more.

All over the world people rely on the following international rules:

1. The Hague Regulations on the Bill of Lading dated 1924, with the Protocols of Amendment dated 1968 and 1979.

2. The UN Convention on the Carriage of Goods by Sea dated 1978.

As well as on sea transportation contracts:

• voyage charter;

• bill of lading;

• contract of carriage with the shipping line.

What does the freight cost consist of?

The cost of sea freight is a variable value, it is regularly recalculated. Therefore, it is almost impossible to fix the tariffs for the sea transportation of goods. Several factors influence the formation of the freight rate:

• direction of transportation,

• sea line congestion,

• seasonality,

• volumes of transportation.

Calculation of the freight cost

A freight ton equal to forty cubic pounds is taken for a unit of cargo weight.

20- and 40-foot containers are most commonly used for cargo transportation, and it may be thought that transportation in 20-foot containers will be cheaper, since they take up twice less space in comparison to 40-foot containers, but that is not quite so. The cost of sea transportation of the cargo depends on the weight of the container, not on its area. Most often, the weight of 20- and 40-foot containers is almost always the same.

This is explained by the fact that the maximum weight of the load in 40’ is up to 26,600 kg, and in 20’ – 28,200 kg. A larger size of a 40’ container does not mean that it is able to withstand a heavier weight. Therefore, heavy loads are most often transported in 20-foot containers, and loads which are lighter, but more voluminous, are transported in 40-foot containers.

Also, the calculation of the cost may be affected by the specifics of the cargo. If it is non-standard, then you will probably need a special container: with an open top (OT / Open Top), platform (PL), with a flat frame (FL), a refrigerated container (RF), etc. Such loads are more difficult to transport, the requirements for them are increased, and in the case of a refrigerated container it is also necessary to maintain a certain temperature regime, which implies additional energy consumption. Therefore, such transportation will always be more expensive.

The cost of the cargo affects the cost of freight too. The more expensive the cargo is, the more obligations the carrier has, including insurance. Therefore, transportation of the valuable equipment will always be more expensive than transportation of dishes, despite the possible equal weight.

What is included in the freight service?

1) The main, or the basic sea freight rate (BAS) is the fee for the carriage of the cargo by sea / ocean from the place of shipment to the place of destination. The base rate is affected by the length of the route, size, weight of the cargo, type of equipment, etc.

2) Additional mandatory payments:

• BAF Surcharge – is added for fuel, so that the owner of the vessel could adjust the transportation, taking into account changes in its cost;

• CAF Surcharge - is charged so that the carrier could avoid exchange rate fluctuations;

• THC Surcharge – is charged for the terminal handling of the vessel at the ports of shipment / arrival and includes loading and unloading of the container;

• DOCS Surcharge – is included in the cost for issue of documents for loading and unloading.

3) Additional optional fees for value added services (VAS) are additional services that are required by the customer or are requested by the port authorities for cargo handling. For example, Mobile inspection and examination complex, grain cleaning, large-size transportation, additional weighing, etc.