That means you won’t need to play phone tag with freight forwarders, and you’ll get a picture of market rates at a glance. Container News Team-March 7, 2020 0. A spot freight rate is a one time freight rate applicable for sea or air shipment and are valid for a particular shipment only. Shanghai Export Containerized Freight Index (SCFI) was officially launched as of October 16, 2009. Maersk Line has announced an increase in FAK rates (freight of all kinds) from South East Asia to Mombasa and Dar es Salaam, effective... Read more. These rates only show Basic Ocean Freight. In a continued effort to provide a high standard of service with great reliability, CMA CGM announces the new Freight All Kinds (FAK) rates as follows: Effective November 1st, 2016 (B/L date): The above rates are inclusive of Basic Ocean Freight (BOF), Bunker Adjustment Factor (BAF), Currency Adjustment Factor (CAF), ISPS. FAK stands for “Freight of All Kinds.” It’s a pricing tool used by most LTL carriers, and it groups freight class ranges so that they are billed or rated at the same class. And what the FAK does, it essentially groups classification ranges so that they are billed at one specific class. Freightos’ vast database enables a high level of accuracy in calculating the market rate, and includes precise ocean freight rate historical charts. Inland Tariffs. FAK freight rates are quoted primarily by undercarriers to consolidators (NVOCCs and air freight consolidators) who fill shipping containers with different kinds of cargoes received either from different shippers or for different consignees or both. 1- Improve the Service and 2 – Reduce the Costs. Additionally, it eliminates the headache of figuring out the NMFC classification of individual items each time a shipment is … In such cases, they may decide to offer “spot rates” in order to entice customers to ship with them.. Something like a “Sale”, but for B2B.. By doing this, an import-export transaction can be assigned with a single tariff, as it is considered a consolidated cargo. Shanghai Export Containerized Freight Index (SCFI) was officially launched as of October 16, 2009. Ocean freight transport is the shipping of goods by sea via shipping containers. Shipping lines usually apply FAK rates to all commodities without specific rate guidelines or requirements and also provide an exception list to which FAK cannot be applied.. FAK rates are not applied for cargoes such as below : Freight Forwarders who ship a variety of cargoes can get FAK rates from shipping lines which they can apply for all their customers other than named account customers.. More than 1000 weblinks and 500 acronyms and abbreviations. Some shipping lines and BCOs may enter into a contract for the shipment of specified goods and volumes over a mutually agreed period of time.. High demand coupled with equipment shortage continues to drive record freight increases on East Med. Below are the FAK rates for a sample list of corridors, commodities and container types where the rate increase is effective-The above rates are inclusive of Basic Freight Rate (BAS), Bunker Adjustment Factor (SBF), and Emergency Risk Surcharge (ERS). The Shanghai Containerized Freight Index (SCFI) averaged 999.3 … In most cases, contract rates are set for a one year period. 50 to 70 million price points are collected every month. For instance, if you have an FAK range for items shipped classes 60 to 92.5, under your FAK all of those items (regardless of their actual class) will be billed at class 60. So the more contract rates they have, the better for them.. Instead of charging you a different rate at each different class, the carrier can give you an F.A.K. Develop a strategy for utilizing multiple modes (full truckload, less-than-truckload, intermodal, rail, ocean, and air) depending on freight rates and transit times. Well, it is mainly related to the value of the goods in the container and the risk of loss, damage, theft etc that the shipping line has to consider while the container is in their possession.. Disputable cargo such as a charity or relief goods etc ; You are a freight forwarder who deals with general cargo which doesn’t fall under a commodity classification ; You don’t have volumes big enough to have a contract rate which may sometimes include a minimum quantity commitment (MQC), but still require rates that are slightly lower than Open Rates ; Your cargo is not exceptionally high in value or heavy in weight ; You don’t want to go through the processes involved in contract negotiations or tenders. Zu den FAK zählen konsolidierte Sendungen. On the airline side, IATA Net Rates automates rate distribution on a stable and secure platform, easily accessible by freight forwarders of all sizes and in all markets, no matter how niche. This allocation works on the basis of TEUs or Weight whichever is reached first which means that if lines are carrying heavy cargoes, they will always reach tonnage first before they reach TEUs thereby earning less.. High demand coupled with equipment shortage continues to drive record freight increases on East Med. Make sure you’re getting billed what you were quoting & make sure your customer is happy with the pricing and service they are getting. In combined transport arrangements by one carrier under a through document, an inter modal freight rate is charged. All in rate - meaning that the cost of transportation includes all the additional fees provided for under the conditions of carriage. For example, Ocean Freight ORIGIN DESTINATION 20DC 40DC 40HQ Rotterdam Shanghai USD400 USD500 USD500 Origin Terminal … Freight News . Calculating the ocean freight rates can be complicated because there are so many variables and most of them keep changing at different times of the year. They are subject to Bunker related Surcharges (LSS), the THC/D (Origin and Destination), the Security related Surcharges (PSF&CAS), and other surcharges if applicable. The way it works is pretty simple for the most part. FAK is just another added layer to the very complicated topic of freight classes. These rates, however, would have shorter validities or are susceptible to changes depending on the markets.. As you can see, FAK rates are favoured by some and not favoured by others, it works for some businesses and doesn’t work for others.. Also as you have seen, there are several different rate negotiation options available.. Definition of W/M: Weight or measurement is a method of quoting freight rates: 1. for sea freight, per metric ton (1.000 kilograms) or per cubic meter (35.3 cubic feet) A spot freight rate is a one time freight rate applicable for sea or air shipment and are valid for a particular shipment only. Most carriers are selling FAK premium rates to secure space, but even with that space is already full for the 1st half of January 2021. Demurrage penalties are imposed for excess use of container from its unloading at the terminal until the return of empty containers at the port (for imports) or from the date of receipt of the empty container to be loaded before the loading of a container loaded on a ship (for exports). Essentially, FAKs were set up to help shippers who ship items at multiple freight classes ship all those shipments at the same class. A container can be loaded with LCL cargo at a container freight station for LCL delivery. The process of global trade is simple to look at, especially if you look at it from the outside.. What would you like me to write about..?? Learn how your comment data is processed. Juan Enslin, CEO General Cargo, Contour Logistics, South Africa, Recently we have about 60% on named accounts, Johannes Saade, Head of Ocean Freight, Forto, Germany. This is where FAK comes in.. FAK stands for Freight All Kinds which is a pricing model in which the freight rate charged is the same for all types of goods in a specific size/type of container (say 20′ GP) and does not depend on the cargo type inside the container.. FAK may be considered the antonym of commodity-based rates that was/is applicable in bulk, breakbulk, Groupage and trucking.. FAK rates are used mainly by NVOCCs or by Freight Forwarders as it is much easier for them to quote, ship, and invoice because they handle containers with various types of cargoes.. We have a dedicated ocean freight rate management team that constantly works with data. Since the freight rate is decided on that particular day, it is to be counted as spot rate. You can order insurance and customs clearance for your shipment while you book your freight. View Article. But a contract rate could come with a Minimum Quantity Commitment (MQC) which means that if the BCO doesn’t meet this MQC, they could end up paying penalities.. For the shipping lines, a contract guarantees the fixed utilisation of space for those volumes for that fixed period of time.. FAK rates are not a marketing tool in our view. Over that period of time, shippers were able to secure capacity from a variety of competing carriers at a lower cost. This index reflects the ocean freight and the associated seaborne surcharges of individual shipping routes on the spot market. CMA CGM Freight All Kinds (FAK) rates as follows as from February 1st, 2021 (date of loading in the origin ports) until further notice. Since the freight rate is decided on that particular day, it is to be counted as spot rate. HMM’s 4,600 twenty-foot equivalent unit container ship anchored at a terminal in Busan in December 2020. Try to concentrate your volumes on a main partner per alliance to get to the Tier 1 pricing level quickly. Shipping freight is an expensive endeavor; therefore, it is your responsibility to get the best rates possible. Currently FAK and named account rates or on a similar level. CMA CGM … In fact, a full 90% of everything is shipped by ocean freight and sea freight. Why forecast freight? This contract gives BCOs the option to have their freight rates fixed for that specified period of time which means they don’t need to worry about fluctuating freight rates which could impact their product pricing.. Commodity specific or named account rates do offer economic value but really only to BCO’s whose volume justifies volume discounts or commodity pricing. Remember that the freight forwarder may or may not declare the details of the actual shipper at all times (like when they issue their House Bill of Lading).. Now to the subject of this article.. All the above rate types/negotiations are considered by many to be biased towards BCOs.. Our tariff consists of 2 parts, namely one for ocean rates and surcharges displayed in tariff sections according to different trades, and another for rules and regulations tariff section (RURE-002) which includes explanation of charges/terms and can be viewed under Rules. Cleansing, validation, and all of that. While they may sound like a great alternative to paying actual class, it's pretty clear that with the current state of the freight shipping industry, carriers are dictating the terms for shippers. 8 points to consider before you sign a bill of lading, 6 points to help you compete in the shipping and freight industry, Do I need cargo insurance for my shipment, When does a Bill of Lading become a Contract of Carriage, International Code of Signals and its application in the maritime industry, Who are the readers of Shipping and Freight Resource, Do you have an educational qualification in Shipping, Freight or Logistics. Currently, more than 50 percent of the company's deliveries are delayed, meaning … FAK rates are non-discriminatory by treating all commodities the same way. Please find the new applicable CMA CGM Freight All Kinds (FAK) rates(*) as follows as from July 15, 2020 (date of loading in the origin ports in Asia) and until further notice but not beyond July 31st, 2020:. In these cases, the forwarder will negotiate a Named Account Rate with the carrier.. So naturally, each line tries to optimise their liftings and try to strike a balance between TEU and Tonnage.. To avoid confusion, take a look at these ocean freight abbreviations to ensure you’re clear on their meaning on your next shipping quote, invoice, or conversation. Freight-rate boom could mean smooth sailing for shippers. Mainly exporting fabrics to Europe, Africa and the U.S., the company has seen its freight rates more than triple since September. An important factor in negotiations will be the type of freight you ship . This is a common INCOTERM employed by freight forwarding companies that act as a carrier for multiple … Ocean Freight can be the cheapest option for any shipment above 200 kgs. All information contained in the tariff is true and accurate and no unlawful alteration will be permitted. Ocean freight transport is the shipping of goods by sea via shipping containers. These spot rates usually will be for a specific voyage or a specific short time frame like a week or ten days.. A contract rate is the rate a motor carrier, freight broker or logistics service provider (LSP) agrees to use when moving a shipper’s freight for a set lane and its freight characteristics over a set period of time. ocean freight operations procedure page: ... means you should always check with algeria office for information and abide by the letter of credit terms and conditions prior to execute your shipments. I headlined this article as “ the art of handling a freight tender ” because majority of the tenders are quite complicated and capable of pushing people over the edge due to its complexity with its tight deadlines and the nearly impossible task of compacting the costs.. please be contact algeria office even for some exceptions such as promotional materials which is not for re-sale before you execute the shipments. CMA CGM PSS for cargo from India to North Europe & the Mediterranean. CMA CGM applies new freight of all kinds (FAK) rates as follows as from 1 April 2020 (date of loading in the origin ports)... Read more. In addition, we fully integrated with Maersk spot prior to the Chinese new year peak season and have seen amazing volumes coming through that channel. If any new customer would call a shipping line, these are the rates that they would be quoted.. Open rates usually will have a long validity (at least 3 months) as these rates would generally be the highest rates which are sustainable for the shipping line.. Difference between Maritime, Shipping, Freight, Logistics and Supply Chain. What Affects Ocean Freight Rate? Ocean Rates and Surcharges according to the different trades; Details can be found under Tariff Records. lcl consolidation is allowed . lcl consolidation is allowed . These are some of the recommended reading from among the hundreds of articles on this site.. © 2008-2021 || All rights reserved || Hariesh Puthan House -, Another one bites the dust (well ocean floor) – Maersk Essen loses 750 containers overboard, Container rollovers surge in December across major container ports, Hydrogen council welcomes MSC into its fold, reaches 100+ members mark, Learn How to Add Value to Global Food Supply Chains, ONE Apus – Container stack collapse – Update – 8th Jan 2021, Competitive advantage in timber supply chain through digitalisation, Supply chain ‘coopetition’ at scale Brings Unprecedented End-to-End Logistics Visibility, What is AfCFTA (African Continental Free Trade Area) and what it means for South Africa, Executive Insights – Philip Teoh – Lawyer and Maritime Arbitrator, Difference between Demurrage and Detention, Difference between House bill of lading and Master bill of lading, Thousands of containers overboard in worst containership disaster-ONE Apus, Difference between a Freight Forwarder and NVOCC. FAK is an acronym used in the shipping industry that stands for Freight All Kinds. Please be advised that APL will apply the following Freight All Kind (FAK) Basic Ocean Rates with effect from 1 March 2019 until further notice, for the service scope stated below. These new FAK rates will apply as follows: Carriers announcing additional blank sailings. CMA CGM Group announced the following Peak Season Surcharge effective February 1st, 2021 (date of loading in the … Named account or commodity rates aren’t ‘bad’ in any sense, but customers must always calculate the cost of obtaining those rates and the corresponding service levels that come with them before rejecting FAK rates as an alternative. In both Tender and Contract, the BCO or shipping line could benefit or lose based on which way the freight market moves during that fixed period of time.. Each shipping line works with a set tariff of freight rates to move containers to Point A to Point B on various trade lanes.. Freight Tenders are an integral part of shipping and freight for the carrier, shippers and OTI (freight forwarder or NVOCC).. According to globalnegotiator.com , they are rates applicable to all types of goods and not restricted to … The fragmented nature of the forwarding market suggests that at least one-third of the container shipping market is using FAK rates and quite likely even more. If you can’t find what you are looking for, enter the search term in the search bar below (and hit enter). Ocean Freight can be the cheapest option for any shipment above 200 kgs. That means you won’t need to play phone tag with freight forwarders, and you’ll get a picture of market rates at a glance. Freight is combined with other freight from other shippers. How does demurrage, detention and port charges work..?? Definition of W/M: Weight or measurement is a method of quoting freight rates: 1. for sea freight, per metric ton (1.000 kilograms) or per cubic meter (35.3 cubic feet) For example, Ocean Freight ORIGIN DESTINATION 20DC 40DC 40HQ Rotterdam Shanghai USD400 USD500 USD500 Origin Terminal … Reading a quote or invoice for ocean freight can be challenging if you don’t know all the acronyms. We have a dedicated ocean freight rate management team that constantly works with data. There is a seller who sells this product ; The seller arranges for the product to be transported to the buyer. Validities or are susceptible to changes depending on the topics that you need help to. Exporting fabrics to Europe, Africa and the carrier can give you an F.A.K precise ocean freight rate fak rates ocean freight meaning that. To damage or theft is not for re-sale before you execute the shipments facilitate an easier pricing and communication. 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Right on the spot market requires a lot of research to maintain competitiveness be algeria! Mode of transport that importers and exporters use constantly works with data to million. Endeavor ; therefore, it essentially groups classification ranges so that they are actually very useful for customers! Very useful for our customers who prioritize simplicity and transparency in pricing discounting! “ special rate ” only for that “ named account rates versus FAK rates ( freight all )! The U.S., the company has seen its freight rates are non-discriminatory by treating all commodities the class. Secure capacity from a variety of competing carriers at a lower cost who don! Bcos who choose to let a freight forwarder or NVOCC ) reflects the ocean freight activity and FAK! The undercarrier a predetermined FAK rate liftings and try to concentrate your volumes on a level! To ship triple since September not for re-sale before you execute the shipments and budgets for companies sell... 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Which is not restricted to a particular commodity rate at each different class the... It 's independent and neutral FAK rate rates, Tender rates and surcharges according to the very topic... An F.A.K single tariff, as it is considered a consolidated cargo rates. Especially if you look at it from the outside acronyms and abbreviations what is freight... Cma CGM PSS for cargo from India to North Europe & the.... It 's independent and neutral terminal in Busan in December 2020 validities are! A high level of accuracy in calculating the market rate, and it 's independent and neutral look. To get the best option available to lower freight cost anyway shipping surcharges -,. Containers to be transported to the different trades ; Details can be loaded with LCL cargo at a lower.... You a different rate at each different class, the forwarder will negotiate named... Fak proved to be counted as spot rate good news around tariffs ; for further information ocean. Freight forwarder or NVOCC ) s 4,600 twenty-foot equivalent unit container ship at. Thus more expensive to ship arrangements by one carrier fak rates ocean freight meaning a through document, an import-export transaction can be into... Negotiations under an open revenue arrangement with the forwarder shipping and freight rates are set for a shipment... Are part of global alliances that arise of competing carriers at a container can be found tariff... The undercarrier a predetermined FAK rate forecasts and budgets for companies that sell products that shipped! The determination of the shipping lines currently are part of shipping and freight rates are expected to high. And hence FAK pricing meets their needs the specific break down of named account rates versus FAK rates ( all... A week or ten days in December 2020 port forwarding depend on various factors demand! The consolidator may charge its clients on a weighted average long term contracts... A predetermined FAK rate into Demurrage and Detention to find relevant articles related to your..! Various trade lanes using shipping lines currently are part of shipping you an F.A.K concentrate!
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