Vessel charter has several concepts. Let's first define what ship charter or sea freight of a vessel is in our understanding. In relation to our services, freight can be given the following definition: ship freight is a place rented on a ship for the transportation of your cargo, in our case, most often container, therefore the concept of container freight is also used.
All requirements for the upcoming sea transportation, as well as sea freight rates, are reflected in a specially concluded contract. When concluding a contract, you should take into account as many nuances and details as possible, such as the conditions and cost of freight, indicate the period during which express freight is valid and reflect the type of vessel (since depending on the type of cargo transported, you may need a non-standard cargo container , but the freight of a tanker, an entire ship, a bulk carrier or a barge). If it is necessary to provide additional related services (for example, freight insurance), this should also be reflected in the contract.
The company "Universal Cargo Solutions" offers sea freight services in two cases: if you order sea freight along with a range of other services provided by our company, such as delivery and customs clearance of your cargo, or in case of very large volumes of your cargo. You can order from us without any problems vessel charter, since the company “Universal Freight Solutions” has service contracts with shipping lines. Special attention Our company pays attention to the Asian direction, thanks to which we have fully developed and optimized such a service as sea freight from China. We cooperate with most shipping lines on very favorable conditions, therefore we can offer our clients economically convenient freight prices. Contact us, our sea transportation specialists will calculate the cost of sea freight based on your application. We are almost sure that the total freight amount offered to you sea cargo will meet your expectations.
Freight rates
Ocean freight rates are frequently recalculated, so ocean freight rates are not constant. The cost of freight depends primarily on the carrier company, as well as on the direction of transportation of your cargo, line congestion and time of year. Freight rates include the costs of the services provided. transport services and average profit. The calculation of vessel freight is established for a specific period and depends on the type of vessel freight and the number of voyages when linking the following things:
- participants in this transaction
- client renting a boat
- Freight service validity periods
- locations of ports for loading, stowage and unloading of cargo
When calculating freight costs a unit of cargo mass is taken to be a measured freight ton, equal to approximately forty cubic pounds. When paying freight by cargo volume, it is necessary to take into account the dimensions of the cargo, taking into account the uneven surface, and you can also calculate the freight price based on the bill of lading weight, which is indicated in the transport documents. Payment of freight according to the bill of lading weight is profitable and provides discounts of 1-2 percent. In this case of freight, the client cannot place his cargo as he pleases. The shipowner has the right to place cargo on the ship.
The globe is entangled in automobile and railways. They connect cities and countries, but are not able to provide transportation from one continent to another.
An alternative to expensive air transportation is transporting goods by sea. This type of delivery is much cheaper, even taking into account the presence of some pitfalls. The international logistics company Traffic delivers cargo by sea even to the most remote corners of the planet.
We will help you charter a whole ship or a separate container for a small shipment of goods and calculate the freight rate.
Our competitive advantages
Components of a freight rate
Freight rate is a composite unit. It consists of:
- basic freight rate (includes the freight owner's costs for loading, unloading, storage and voyage costs);
- maritime allowances;
- additional payments (port fees, duties, etc.).
Depending on the characteristics of the cargo and transportation conditions and route, sea taxes and surcharges are necessarily added to the base freight rate.
Main factors influencing the freight rate
1. Route:
- if the ship passes through areas where there is a risk of pirate attacks or hostilities, the fee increases;
- passage of the Bosphorus Strait, Suez Canal, Panama Canal, Gulf of Aden - the authorities of Turkey, Egypt, Yemen charge a fee for the use of these transport routes;
- additional payment is made for mooring the vessel in ports whose waters are frozen;
- surcharge in English ports;
- surcharge for high season (if goods are transported from Asian countries).
2. Dimensions:
- if the height exceeds 2.25 m;
- if the weight of what is being transported is greater than the standard weight for a 20-foot container;
3. Cargo features:
- dangerous;
- valuable;
- fragile;
- animals.
4. Surcharges compensating for possible penalties of the shipowner:
- fuel - depends on fluctuations in fuel prices, tied to oil prices;
- currency. In this way, the carrier compensates for losses due to currency fluctuations;
- freight tax. Paid if the ship calls at the ports of countries that levy a tax to compensate for the costs of servicing the refrigerator.
5. Port charges:
- mooring;
- ice;
- additional fees for cargo operations if the port is overloaded;
- port export-import duties;
- for safety;
- transportation costs.
6. Other possible payments:
- for cleaning the container;
- for processing customs documents;
- for using the container;
- for enhanced cargo security;
- for the use of technological transport inside the port;
- for returning an empty container;
- insurance examination fee
- and much more.
Paperwork and route planning
Maritime brokers from Trafic will help you understand all the nuances, prepare documents correctly and calculate the freight rate. Indeed, in this article we have listed only the main factors influencing the cost of transportation.
Our logisticians create the optimal route individually for each client. We work with many shipowners, so we can offer several cargo routes and a full range of cargo services along the way. Shortcut not always the most profitable.
To get detailed information or charter a vessel, contact us by phone or leave a request on the website. The international logistics company Traffic guarantees prompt and safe delivery of your goods by sea to anywhere in the world.
The professionalism of our team is a guarantee of your peace of mind.
Call us on:
+7 495 775 86 35
for advice.
SEA FREIGHT, ITS CALCULATION AND PAYMENT
Freight amount. When transporting goods on ships of regular lines operating on a schedule, freight charges are charged according to the tariff.
When transporting goods by domestic ships that do not make regular trips from Soviet to foreign ports (export) and vice versa (import) at the expense of Soviet organizations, freight charges are also charged at the rate approved by the USSR State Planning Committee. The size of tariff rates depends on the type of cargo and the direction of transportation. For flights made in directions not covered by tariffs, the amount of freight is determined according to the tariff scheme depending on the distance of transportation.
When transporting goods at the expense of foreign charterers from ports or to ports of the USSR, as well as between foreign ports, the amount of freight is established by agreement and indicated in the charter.
Notes on the bill of lading. When freight is paid in full at the port of departure, the bill of lading includes the note “freight prepaid”, without specifying the amount. If only part of the freight is paid upon departure, then the bill of lading indicates the amount of freight paid upon departure and separately the amount to be collected at the port of destination. It should be remembered that the bill of lading must always indicate in one form or another, depending on the circumstances, whether the freight has been paid, and if not paid or paid in part, then where and in what amount it is due to be paid.
Freight (tariff) unit. The freight rate is usually set per unit of weight or measurement. The most common units are:
metric ton - 1000 kg;
English ton (long) - 2240 pounds - 1016.06 kg;
American (short) ton - 2000 pounds - 907.18 kg;
measured metric ton, cubic meter - 35.3 cubic meters. feet;
measured English ton - 40 cubic meters. ft-1.12 m 3 .
In some cases, the tariffs of regular lines provide for the right of the shipping company to charge freight at the discretion of the shipowner per weight or measurement ton. For valuable cargo (gold, silver, precious stones, jewelry, especially valuable furs), freight is charged not by weight or measurement, but by the value of the cargo (ad valorem). In this case, the freight charge is calculated as a percentage of the cargo valuation amount established by the tariff or by agreement of the parties.
When transporting timber cargo, freight is usually determined by volumetric units used in timber trade (Leningrad standard, cubic English or Russian fathom, pod, tult, board-foot).
When transporting grain, in addition to weight measures, in some countries volumetric measures are used: English bushel (36.365 l), American bushel (36.24 l); When transporting liquid cargo, along with the weight measure, liquid measures are used: liter, English gallon (4.544 l), American gallon (3.785 l), barrel of oil (159 l), as well as cubic meters.
Paid quantity of cargo. The number of freight (tariff) units in most cases is determined by the quantity of cargo delivered at the destination (freight payable on delivered quantity). For individual shipments, freight is calculated according to the quantity loaded (on intaken quantity). This condition applies, for example, when transporting props and balances, when freight is calculated and paid according to the amount of cargo taken on board. However, if part of the deck cargo is lost during the sea crossing, the freight is correspondingly reduced. The same principle of calculating freight is sometimes used when transporting salt, which, due to its hygroscopicity, easily absorbs moisture, increasing in weight accordingly, and also easily loses moisture, especially in summer.
Some charters provide for the right of the consignee to pay freight either on the quantity delivered or on the quantity accepted at a certain discount. Thus, this method of calculation is widespread when transporting coal, where charterers often stipulate their right to pay freight for the bill of lading amount of cargo without weighing with a discount of 2% from the freight amount (2% discount in lieu of weighing).
Basic freight rate. The freight rate is usually based on one port of loading and one port of discharge. If the contract gives the charterer the right to load or unload in several ports, then an appropriate surcharge will be charged for this. Premiums or discounts are also applied for using the charterer’s right to replace one cargo with another, increase or decrease loading or unloading rates, etc.
In order to facilitate the calculation of freight when the charterer uses any of the options provided for in the contract of carriage, a base freight rate and corresponding allowances or discounts are established.
The basic rate is charged for the basic cargo and for the basic loading and unloading ports. For example, when transporting grain from the Black Sea, the base port of loading is considered to be one of the ports in the Black Sea, and the port of unloading is one of the ports of the European continent between Le Havre and Hamburg (Le Havre-Hamburg Range). The base load is any grain not lighter than barley.
Geographic options. If the vessel is sent to Antwerp or Rotterdam for unloading, the freight rate is usually slightly reduced. If the port is located in England, then, as a rule, the freight rate is slightly higher than the base rate. A special surcharge is charged when sending a vessel to the so-called “slow Irish ports” (Sligo, Galway, Traley). If loading instead of the Black Sea port takes place in one of the ports of the Azov Sea, then the freight for using this option will also be slightly higher.
Additional ports. For using the option to load or unload a vessel in two or more ports, an additional fee is usually established. If these ports are in different countries, although close to each other, then the surcharge is higher compared to freight when using two ports of the same country. This is due to the increased amount of port fees when a ship visits two countries. The surcharge for the use of an additional loading or unloading port is paid for the entire cargo of the vessel, and not just for the quantity loaded or unloaded at that port. When transporting cargo of Soviet organizations at an approved tariff, surcharges for additional ports are charged based on the full carrying capacity of the vessel.
Freight options. If, under the charter, the charterer is given the right to take on board a lighter cargo instead of the base cargo, then the freight is increased in the amount provided for in the charter. For example, if instead of wheat the charterer exercises his right to load a quantity of oats, then a premium to the base freight is paid for the entire quantity loaded of this cargo. If instead of coal a certain amount of coke is loaded, then a premium is also paid for this. If instead of thick boards thin boards, poles, staves, etc. are loaded, then the condition of increased freight comes into play here too.
Distance freight (distancefreight). Some charters provide that if the ship, for reasons beyond its control, is unable to deliver the cargo to its destination, but unloads it in another, closer port in agreement with the charterers, then the freight is correspondingly reduced and paid in proportion to the distance traveled. Similar cases are also provided for in Art. 102, 103, 104, 110KTM.
The Jencon charter's strike clause stipulates that additional freight will be paid in proportion to the distance traveled if the vessel is diverted to discharge at a port further away than the original destination.
Lumpsum (lumpsumlumpfreight). Sometimes the charter agreement stipulates that freight must be paid at a predetermined amount, regardless of the quantity of cargo. This is practiced in cases where a variety of cargo is transported, the weight and cubic capacity of which is difficult to determine in advance. Then the charter indicates the carrying capacity of the vessel and the cubic capacity of the cargo spaces provided to accommodate the cargo. Since in such cases it is difficult to calculate the actual cost of loading and unloading, lumpsum freight is always charged with the condition that the cost of loading and unloading is paid by the charterer (full name). It is also usually stipulated that all bedding material, boards and beams for securing the cargo, are provided by the charterer.
PaymentBydeadweight(on deadweight basis). Practiced in similar cases. Freight is charged regardless of the type and quantity of cargo for the net carrying capacity of the vessel.
Dead freight (deadfreight). If, due to the fault of the charterer, not the entire stipulated amount of cargo is presented for loading, then for the underloaded amount the charterer must pay full freight, excluding the cost of loading and unloading, if they were included in the freight rate.
Time and place of freight payment. Depending on the terms of the charter, freight is paid at the port of departure when the captain signs the bills of lading or at the port of destination after the vessel arrives immediately or in parts as the cargo is delivered or after the cargo is delivered, sometimes only after the time has elapsed after weighing, measuring and counting the delivered cargo.
PaymentVportdepartures If the charter stipulates that freight is paid at the port of departure, then the moment of payment is usually the moment of signing Bills of Lading. The captain has the right not to sign or issue a bill of lading to the shipper until the freight is paid. When freight is paid at the port of departure, it is common for the charter party and bills of lading to state that freight is due to the ship whether the ship or cargo is a loss or not.
When transporting goods by liner ships, freight is always paid upon departure.
Partial payment upon departure. In a number of cases, when transporting cargo by Soviet ships between foreign ports, part of the freight (50, 60, 90, 95%) is paid upon signing the bill of lading or a few days after the date, and the balance - after proper delivery of the cargo at the destination. If a portion of the freight is paid at the time the bill of lading is signed, the amount paid is usually, but not always, included on the bill of lading as an advance of freight.
Payment at the port of destination. If the contract stipulates that freight is paid at the port of destination, then the moment of payment should be clarified: freight is paid after the arrival of the vessel (freight payable on arrival), during the unloading process (concurrently with discharging of the cargo)... after delivery of all cargo (upon right delivery of the cargo), after checking and determining the delivered quantity of cargo.
In some cases, freight is paid in installments at different times of delivery of the cargo. For example, the Nubaltwood timber charter provides that 50% of the freight is paid at the beginning of unloading of deck cargo, a further 30% when the holds are opened, a further 10% before the end of unloading, and the balance after counting and measuring the lumber on shore. When transporting liquid cargo, it is usually provided that freight is paid in full before unloading begins (before breaking bulk).
At all stages of unloading and partial payment of freight, the shipowner has the right to delay unloading of cargo to ensure payment of the uncollected part of the freight. Many charters stipulate that the cargo is delivered at the port of destination after payment of freight, and the consignees are obliged to make payments on account of the freight at the request of the captain or shipowner during the delivery of the cargo.
Freight advance. In cases where the freight under the terms of the contract of carriage is paid at the port of destination, the charter obliges the charterer or shipper, at the request of the captain, to issue him a freight advance to pay shipping expenses at the port of loading in the amount of up to 1/3 of the total amount of freight. The advance amount is entered into the bill of lading and is deducted from the freight due to the carrier at the port of destination. If several bills of lading are issued for the cargo, then the advance payment is usually spread across all bills of lading in proportion to the amount of freight. If there are several senders, then each of them must make a freight advance in proportion to its share of the freight.
On freight advances, shippers charge 1 to 2% to cover advance insurance. Usually the charter includes a clause that the freight advance is not refundable regardless of whether the cargo is delivered to its destination or not.
Sometimes the charter includes a condition on partial (40-60%) payment of freight at the port of departure, and the balance upon delivery of the cargo.
Freight currency. Freight is usually calculated in the currency of the place of payment, that is, in the currency of the country of departure or destination. Due to currency restrictions existing in many countries, it is not uncommon for a charter to include a clause that freight must be paid in a freely exchangeable currency.
Large brokerage firms issue periodic bulletins reporting the demand for tonnage and the availability of tonnage. The purpose of quotations is to call a proposal (offer) from the shipowner for tonnage or from the cargo owner for chartering the vessel. The shipowner's proposal usually indicates the carrying capacity of the vessel, the time and place of its readiness for loading, the name of the desired cargo, ports of loading and unloading, conditions (standards and costs) of cargo operations, freight rate, form of charter, etc. The name of the vessel is not always indicated in original offer. Often the shipowner names the ship only at the end of charter negotiations, when they have already become concrete. Often, a charter transaction is concluded without specifying the name of the vessel and the shipowner stipulates his right to announce the name of the vessel later (to be nominated later).
Preliminary negotiations. A freight transaction is preceded by negotiations through brokers. Concluding a deal directly between the carrier and the charterer is a relatively rare phenomenon and is practiced only between large shipowners and shippers, for example, oil companies, coal concerns, and ore exporters. But they, as a rule, prefer to conclude freight transactions through brokers. This is explained mainly by the fact that brokers specially engaged in the freight business are well aware of the conditions of the freight market, the relationship between supply and demand for tonnage, and are connected with shipowners and charterers in different countries.
The process of negotiating and concluding a freight transaction usually involves an alternation of a series of offers (offers) and counter-offers (counter-offers) exchanged between the parties or their brokers. When chartering, firm and conditional offers are used.
Firm offers bind the parties for a certain period of time. For example, a shipowner makes an offer to his broker to transport a certain cargo within a specified period, or authorizes him to charter a ship within this period on the terms proposed by the shipowner. Since the chartering process proceeds quickly, over several days and sometimes hours, the validity of a firm offer is limited to a day, part of a day or a few hours. Often proposals and counter-proposals are exchanged by long-distance telephone and, if the shipowner's proposal turns out to be acceptable to the charterer, then the process of concluding a charter transaction takes only a few minutes.
If a firm offer is accepted (accepted) without changes and within the stipulated period, then the party who made the offer is bound by it and has no right to evade confirmation and written execution of the charter agreement. Late response to a firm proposal against the stated deadline or a change in at least one of the conditions of the proposal (for example, the amount of cargo, the amount of freight, the vessel's readiness period, the port of loading and unloading, loading and unloading rates, etc.) releases the proposing party from the obligation even in the event that the stipulated validity period of the offer has not yet arrived, i.e. any counter-offer immediately releases the party who made the offer from the obligations assumed.
In practice, the first proposal is rarely accepted immediately and completely on all points. Usually the charterer makes his own changes to the shipowner's proposal, responding with a counter-proposal. In most cases, if other conditions are suitable (type and quantity of cargo, terms, ports of loading, unloading), negotiations are carried out regarding the freight rate. Often the subject of negotiations are loading and unloading standards, which naturally affect the freight rate. The parties exchange a series of offers and counter-offers until all terms are agreed upon. The shipowner's acceptance of the charterer's counter-offer on time and without modification, or the charterer's acceptance of the shipowner's offer or counter-offer binds both parties, and the transaction is considered concluded.
Conditional sentences(subject open) are used when the shipowner is simultaneously negotiating with several charterers, or the charterer is simultaneously negotiating the charter of another vessel for its cargo. The offer is made subject to the condition that it will be valid. in the event that by the time a positive response is received the vessel has not yet been chartered or if the charterer does not charter another vessel for this cargo.
Conditional offers are found quite often in practice, since shipowners, in order to speed up the chartering of a vessel and ensure the most favorable terms of the charter transaction, often negotiate simultaneously with several charterers. Charterers often do the same.
Chartering in ballast direction. Chartering of Soviet ships for foreign cargo is carried out by Sovfracht. Being the general freight agent of Soviet shipping companies, Sovfracht, on their instructions and at their expense, looks for appropriate cargo on the world freight market and formalizes the charter agreement. If a Soviet ship is not provided with the planned cargo or, having unloaded export cargo in a foreign port, does not have return cargo to the USSR, the shipping company turns to Sovfracht with a proposal to find a suitable cargo and charter the ship.
In the event that there is no return imported cargo for the ship, it is necessary to look for associated cargo heading to some foreign port located near Soviet ports. Sometimes it is necessary to charter a ship for several associated cargoes, which sequentially bring the ship closer to Soviet ports, for example, if the ship is located in any of the ports South America and must return to the Black Sea, then it can be chartered for grain from South America to one of the European ports, and then for the transportation of coal from England to one of the ports of the Mediterranean Sea, from where, in the absence of associated cargo, it will have to make a relatively small ballast passage in the Black Sea.
In some cases, when a ship, while in a foreign port, can receive imported cargo that fills only part of the ship’s carrying capacity, it may be advisable to use the services of the agency company servicing the ship to find additional cargo components on the spot, without resorting to the services of Sovfracht.
Registration of a freight agreement. The charter transaction is formalized by a charter agreement, which is drawn up by Sovfracht or its foreign freight broker and signed by the charterer and the shipowner. In many cases, due to the lack of sufficient time to send the charter to the parties for signature, Sovfracht receives the authority to sign the charter on behalf of the foreign charterer. If the charter is drawn up by a foreign freight broker, then in urgent cases the latter signs the charter on behalf of Sovfracht, authorized by the Soviet shipping company. Sovfracht and foreign brokers often sign charters with the authority of both parties simultaneously, i.e. the charterer and the shipowner. This is practiced in cases where there is not enough time to send the charter for signature by the parties. Sovfracht and foreign freight agents, when signing a charter on behalf of one party or another, always stipulate that they act only as agents only. This means that they are not responsible for the actions and omissions of the parties and cannot be brought as defendants or co-defendants in disputes under the charter agreement.
As a rule, two original charters are drawn up, one of which is handed over to the shipowner, and the other to the charterer. Cancelled from charter required quantity copies - for the captain of the ship, his agent at the port of loading, the freight agent, the shipper of the cargo, etc. The charter is sometimes drawn up in one copy, which remains in the custody of the broker, and certified or photographic copies are sent to the parties.
Freight market conditions. The level of freight on the world market fluctuates almost continuously. Even during periods of relative stabilization of freight rates in various directions transportation fluctuates depending on the demand and supply of tonnage.
VTK-Trade is an international transport company providing a wide range of logistics and intermediary services. We organize reliable and favorable delivery cargo from China to Russia, we provide assistance in registration necessary documentation, certification, consolidation, storage and customs clearance of goods and other related services.
Cargo transportation from China and other countries of the Asia-Pacific region is carried out by any possible types transport: aviation, sea, rail and road. Qualified specialists of the VTK-Trade company will select for you the optimal transportation route and the most suitable transportation options, calculate the full cost of imports from China, Japan, South Korea or other countries, will take on the hassle of customs clearance. Cargo is accepted at warehouses in Suifenhe, Guangzhou, and Beijing.
Thanks to many years of experience and successful cooperation with reputable foreign partners, we implement logistics tasks of any complexity. We organize express delivery if the client requires fast delivery of a consignment of goods. If the customer’s priority is the low cost of wholesale supplies from China, then we will select the most economical options. We work with the most different types goods: from oversized objects, such as machines or bulky equipment, to the smallest consignments that can be delivered to the recipient as part of groupage cargo.
The VTK-Trade company also provides its clients with a number of intermediary services. We will help you find reputable suppliers and arrange direct supplies of goods from China and other Asian countries. Our advantage is our favorable location in the center of transport routes in the Far East, connecting the border crossings of the Trans-Siberian Railway with the Vladivostok-Khabarovsk state highway and all sea trade ports of Primorye. This allows us to organize the delivery of goods from China in the shortest possible time.
Our clients can take advantage of any cargo transportation services, as well as full logistics outsourcing from VTK-Trade. We will take care of the entire process of international delivery: from placing an order with the supplier, consolidation and storage of goods in our foreign warehouses, certification, insurance and declaration, route development, loading and transportation, right up to delivery and unloading directly to the client’s warehouse.
We work individually with each customer, implementing not only already proven logistics schemes, but also developing new ones - taking into account all the needs and wishes of the client. Our priorities: reliability and safety of the cargo, economic feasibility and delivery exactly on time.
If you have any questions, please contact us, our specialists are always open to communicate with partners and will provide you with full consultation on any details of interest!