Freight is the movement of goods from one place to another through any mode of transportation. A freight quotation includes all details of the charges that will get incurred while moving the goods from origin to destination.
Ocean Freight quotes can consist of upto five components. These are
- Origin Haulage
- Origin Charges
- Freight Charges
- Destination Charges
- Destination Haulage
Haulage at the origin/destination are charges that are incurred to move the cargo from Inland point to the port (origin) or vice-versa (destination). Depending on the inco-terms involved, Haulage may be clubbed together with Freight and quoted as an all-in rate.
Freight rates depends on a number of factors, like type of freight, mode of transportation, weight of cargo, type of commodity and distance traveled and more. There are many surcharges that can be added on freight. BAF (Bunker Adjustment factor) and CAF (Currency Adjustment factor) are included in the freight rate in some trade lanes. Sometimes, certain countries levy additional destination charge eg. piracy risk, surcharge across a canal, congestion surcharge etc.
Origin charges includes Custom formalities, Handling charges (Loading, Temporary Storage, Unloading) and documentation fee. Destination charges include Entry filing, Customs, destination handling charges and documentation fee at the entry port.
It is imperative to understand the charges levied in the freight quote, for both shipper and the consignee, so that no extra charges are applied in the freight invoice.