How is Freight Calculated?

  • Weight – carriers spend energy (fuel) to move a mass (the container), and so it costs more to move a heavier box.
  • Need for special container– the nature of some cargoes means that they cannot be shipped in a ‘standard’ dry container. Instead the goods might need to be hauled in a cooled reefer containers. With reefers, the carrier has a much greater responsibility because the cargo has to be monitored regularly making sure everything is working currently and that the container is receiving power from the ship.
  • Value of the contents – as a general rule (there may be occasional exceptions), ocean freight rates are likely to be more expensive for higher value cargoes, reflecting liabilities and insurance concerns. Thus a container of pharmaceutical products is likely to cost more to ship than a container of waste paper.
  • Availability of vessels in a given trade zone – inevitably in a free market, where there is a lot of competition between carriers in a given trade zone/lane, ocean freight rates tend to be lower. Similarly if the volume of cargo exceeds the total capacity of vessels in that trade zone, the tariff tends to be higher.
  • Type of inland transport – the ocean freight can also be affected by who/how the cargo is to be transported inland. In other words it depends whether the carrier or the merchant effects and bears the responsibility for inland transport of cargo in containers i.e. a differentiation between the logistical and legal responsibility. The two main designations for haulage are Carrier (or line) haulage and Merchant haulage. With Carrier haulage the shipping line arranges the haulage, while with Merchant haulage the customer makes the arrangements.

How is the reefer temperature maintained while at the port or in transit?

While at the port and on vessels, the equipment is plugged into the port’s/vessel’s own power supply. The container’s temperature and conditions are set according to customer requirements.

What Happens if no VGM is provided?

“NO VGM, NO LOADING” - If no VGM has been provided, the container shall not be loaded on the vessel.

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