These rates, however, would have shorter validities or are susceptible to changes depending on the markets.. So naturally, each line tries to optimise their liftings and try to strike a balance between TEU and Tonnage.. The shipment is based upon a separate rate than truckload rate. 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. When working in an alliance, each line has its own allocation in terms of TEUs and Weight which is apportioned based on the total DWCC of the ship.. 50 to 70 million price points are collected every month. As all our signed-up customers can pick and choose available vessels based on FAK levels on our booking platform SHIP it is a great differentiator. 1- Improve the Service and 2 – Reduce the Costs. 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. Carriers announcing additional blank sailings. Additional terms and fees to local agents of the line usually via port forwarding. We have a dedicated ocean freight rate management team that constantly works with data. The determination of the freight rates is different for different forms of shipping. Over that period of time, shippers were able to secure capacity from a variety of competing carriers at a lower cost. The shipment is based upon a separate rate than truckload rate. But many ask, why should shipping lines charge different freight rates for different commodities when they don’t handle the cargo inside the container and the handling costs are the same for all containers..?? What Affects Ocean Freight Rate? So in the line’s system, it will show the cargo is booked by the forwarder on behalf of the “named account” and for those shipments, this named account rate will apply.. There may be times when a shipping line is low on bookings on a specific vessel or during a specific period due to low demand.. Their ships may not be sailing with the optimal volumes.. Definition of FAK (Freight All Kinds) FAK is a term used within the freight and logistics industry when an LTL carrier assigns a single tariff classification for freight that would typically run under several NMFC codes.. 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. These FAK rates are traditionally slightly better than Open Rates but higher than Contract Rates, Tender Rates and Named Account Rates.. 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. 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.. Click on the topics that you need help with to find relevant articles related to your question.. Freight-rate boom could mean smooth sailing for shippers. 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. What is a letter of credit, how it works and who needs it.. What is a Switch Bill of Lading and when and why is it used..?? Mainly exporting fabrics to Europe, Africa and the U.S., the company has seen its freight rates more than triple since September. How does an FAK affect me? Counting 100 SMARTShip deployment and more View Article. Spot rates depend on various factors namely demand in that region, oil prices, bunker prices etc. Maersk Line is announcing an increase in FAK rates (Freight All Kinds). However some shippers figured out how to exploit the FAK to move … 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.. 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. Market Outlook March 2019 – Ocean Freight Rates Major Trades Market outlook on smaller trades available in the back-up O C E A N F R E I G H T R A T E S O U T L O O K ASPA – EURO The pick-up after the CNY holiday is slower than expected and there is some pressure on the FAK rates. FAK rates are non-discriminatory by treating all commodities the same way. Imagine the administration work involved for both shipping line and forwarder if all the rates were based on commodity and each rate had to be filed individually.. 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. But the sudden rise in freight rates has turned the seemingly good news around. Use them consistently throughout the year not only opportunistically. Spot freight rates are capacity driven and there is no commitment for such rates. You can order insurance and customs clearance for your shipment while you book your freight. CMA CGM Group announced the following Peak Season Surcharge effective February 1st, 2021 (date of loading in the … The process of freight quotation comes in a few different flavours. What Affects Ocean Freight Rate? Reason it is useful: It allows for much easier rating and reduces re-classification and billing errors for companies that ship a wide range of products. High demand coupled with equipment shortage continues to drive record freight increases on East Med. FAK agreements are rare, and it's likely they aren't the best option available to lower freight cost anyway. CMA CGM announces fresh Asia rates. FAK is just another added layer to the very complicated topic of freight classes. please be contact algeria office even for some exceptions such as promotional materials which is not for re-sale before you execute the shipments. 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. The ocean transport industry provides a wide range of shipping services, which may be broadly split into two main categories: liner shipping and tramp shipping. 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. Period of container can be divided into Demurrage and Detention. lcl consolidation is allowed . Ocean Rates and Surcharges according to the different trades; Details can be found under Tariff Records. 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.. FAK Rates - From Asia to North Africa. According to globalnegotiator.com , they are rates applicable to all types of goods and not restricted to … 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. CMA CGM … For example, Ocean Freight ORIGIN DESTINATION 20DC 40DC 40HQ Rotterdam Shanghai USD400 USD500 USD500 Origin Terminal … Less Than Truckload (LTL) Freight from several shippers loaded onto an individual trailer. Notify me of follow-up comments by email. 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. So the more contract rates they have, the better for them.. 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). While there are several processes and documentary flows involved in trade negotiations, there are even further processes involved in the actual movement of the goods from Point A to Point B.. One such process in the movement of goods that influences product pricing is the process of freight negotiation and freight quotation.. As we have seen, a freight quotation is a document that outlines the charges involved in the movement of cargo from Point A to Point B.. Learn how your comment data is processed. What would you like me to write about..?? Ocean Freight can be the cheapest option for any shipment above 200 kgs. As provided in the Shipping Act of 1984, a contract between a shipper (or a shippers' association) and an ocean common carrier (or conference) in which the shipper makes a commitment to provide a certain minimum quantity of cargo or freight revenue over a fixed time period, and the ocean common carrier or conference commits to a certain rate or rate schedule as well as a defined service … An important factor in negotiations will be the type of freight you ship . Shanghai Export Containerized Freight Index (SCFI) was officially launched as of October 16, 2009. HMM’s 4,600 twenty-foot equivalent unit container ship anchored at a terminal in Busan in December 2020. Inland Tariffs. Most of the shipping lines currently are part of global alliances.. 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. More than 1000 weblinks and 500 acronyms and abbreviations. Mainly exporting fabrics to Europe, Africa and the U.S., the company has seen its freight rates more than triple since September. 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. Named account rates are stable with a longer validity period and committed volume from a specific customer, FAK rates are very volatile and can trade below or above-named account rates. Freight that is prone to damage or theft is not profitable for a carrier and thus more expensive to ship. [YONHAP] Ocean freight rates are up as much as threefold on year, and the firmness of pricing could remain and help Korea’s shippers for the rest of 2021. Prices used in the index are rolling short term Freight All Kind (FAK) spot tariffs and related surcharges between carriers, freight forwarders and high-volume shippers. Ocean Freight Meaning: What Is Ocean Freight? CMA CGM announces fresh Asia rates. It was implemented to facilitate an easier pricing and billing communication between the shipper and the carrier. And it’s a tool used by the common LTL freight carriers. Liner Shipping . 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:. All information contained in the tariff is true and accurate and no unlawful alteration will be permitted. But FAK could be a good solution for your company if: Morning, Will it be cheaper to do imports myself or use a shipping agent.? You’ll be able to track your shipment right on the Freightos.com platform. Shipping freight is an expensive endeavor; therefore, it is your responsibility to get the best rates possible. 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. 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). Some customers who know how to plan their shipments, or are in the right place at the right time may benefit from these rates.. 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. 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. As provided in the Shipping Act of 1984, a contract between a shipper (or a shippers' association) and an ocean common carrier (or conference) in which the shipper makes a commitment to provide a certain minimum quantity of cargo or freight revenue over a fixed time period, and the ocean common carrier or conference commits to a certain rate or rate schedule as well as a defined service … Declared High-Value Cargo (Cargo Value exceeding $500.000 per container) ; High risk or sensitive cargoes such as Government or military cargo ; Special cargo types such as Out of Gauge Cargo. In most cases, contract rates are set for a one year period. 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.. Spot rates depend on various factors namely demand in that region, oil prices, bunker prices etc. The FAK proved to be very effective in its original design. Shipping Surcharges - CAF, BAF, All In. …..’. Key definitions of over 1500 useful international trade terms. A spot freight rate is a one time freight rate applicable for sea or air shipment and are valid for a particular shipment only. 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.. Export and Import Ocean tariffs; For further information regarding ocean or inland freight please contact the respective Sales Office in the Area. 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.. Essentially, FAKs were set up to help shippers who ship items at multiple freight classes ship all those shipments at the same class. 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. Counting 100 SMARTShip deployment and more View Article. Most medium to small forwarders operate on FAK and this is the main reason as to why these business battles against the corporates. 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. CMA CGM … News. FBX freight rate data is aggregated and anonymized from live business databases with tens of millions of price points updated on a daily basis. 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. Freight Tenders are an integral part of shipping and freight for the carrier, shippers and OTI (freight forwarder or NVOCC).. 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. Since the freight rate is decided on that particular day, it is to be counted as spot rate. 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.. In this option, the carrier will provide the forwarder a “special rate” only for that “named account”.. 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.. CMA CGM PSS for cargo from India to North Europe & the Mediterranean. You can order insurance and customs clearance for your shipment while you book your freight. Freight News . Difference between Maritime, Shipping, Freight, Logistics and Supply Chain. Reading a quote or invoice for ocean freight can be challenging if you don’t know all the acronyms. This index reflects the ocean freight and the associated seaborne surcharges of individual shipping routes on the spot market. Simple, right..?? These rates only show Basic Ocean Freight. There are some BCOs who choose to let a freight forwarder handle all their freight negotiations under an open revenue arrangement with the forwarder.. Ocean freight transport is the shipping of goods by sea via shipping containers. For example, in the case of freight under LILO, this means that in the U.S., except for freight, loading and unloading, also includes all related costs, such as BAF, CAF, etc. These new FAK rates will apply as follows: Ocean freight is the most common mode of transport that importers and exporters use. They are actually very useful for our customers who prioritize simplicity and transparency in pricing over discounting. An important factor in negotiations will be the type of freight you ship . How does demurrage, detention and port charges work..?? And what the FAK does, it essentially groups classification ranges so that they are billed at one specific class. FAK is not a good tool but with lower volume accounts it’s the only solution. 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. Depending on the current market. Read product reviews of some of the leading brands in the industry.. Forecasting freight volumes and rates is essential for building financial forecasts and budgets for companies that sell products that are shipped. A spot freight rate is a one time freight rate applicable for sea or air shipment and are valid for a particular shipment only. You’ll get support for any questions that arise. Freight / Our Services • / Shipping terms / Gate term (ICC) Gate term (ICC) Gate Term: Loading. 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. We have a dedicated ocean freight rate management team that constantly works with data. I order a 20 ft container monthly sometimes 2. The phrase fixed implies that the base rate agreed in the Contract cannot go down …we apply the rule ‘ fixing the ceiling but no the floor …….any Provider will always want to keep his Customer competitive …so when rates fall the incumbent Provider will want to lower the base rate to keep his customer competitive …after all the worse case is when the Customer has to call the Provider and say …..hey the market rates have fallen , whey didnt you tell me and offer me a lower base rate ? Over that period of time, shippers were able to secure capacity from a variety of competing carriers at a lower cost. FAK stands for Freight All Kinds. Additionally, it eliminates the headache of figuring out the NMFC classification of individual items each time a shipment is … CMA CGM Freight All Kinds (FAK) rates as follows as from February 1st, 2021 (date of loading in the origin ports) until further notice. FAK requires a lot of work and also a lot of research to maintain competitiveness. FAK rates are undeniably straightforward and easy to understand. When it comes to ocean freight transport, shippers have benefited from almost a decade long “down-cycle” as far as rates are concerned. This is a common INCOTERM employed by freight forwarding companies that act as a carrier for multiple … A container can be loaded with LCL cargo at a container freight station for LCL delivery. Freight All Kind (FAK) is one of those INCOTERMS and it is employed when different types of products are assembled in one single cargo to be shipped together and labeled as FAK. These spot rates usually will be for a specific voyage or a specific short time frame like a week or ten days.. However, the specific break down of named account rates versus FAK rates sold depends entirely upon the client base of each forwarder. 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.. Make sure you’re getting billed what you were quoting & make sure your customer is happy with the pricing and service they are getting. Try to concentrate your volumes on a main partner per alliance to get to the Tier 1 pricing level quickly. In fact, a full 90% of everything is shipped by ocean freight and sea freight. Ocean freight is the most common mode of transport that importers and exporters use. Rate, and it 's independent and neutral are valid for a carrier and thus more to. Carrier and thus more expensive to ship is combined with other freight from several loaded... You need help with to find relevant articles related to your question apply follows... 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S why CoLoadX focuses almost exclusively on offering forwarders & NVOCCs FAK rates sold depends entirely upon the base... Of all Kinds– it ’ s the only solution forwarder a “ special rate ” only for that “ account. Week or ten days to optimise their liftings and try to strike a balance between TEU and Tonnage unlawful... By the common LTL freight carriers % of everything is shipped by freight... Demurrage and Detention freight that is prone to damage or theft is not profitable a. Get you on the Freightos.com platform, Africa and the associated seaborne surcharges of individual shipping on. Supply Chain CGM PSS for cargo from India to North Europe & the Mediterranean are shipped by ocean rate! No commitment for such rates this, an import-export transaction can be divided into Demurrage and Detention ) from! Good news around ten days before you execute the shipments look fak rates ocean freight meaning, especially if don., freight of all Kinds– it ’ s a pricing tool mechanism that groups classes. Easy to understand rate historical charts you an F.A.K seaborne surcharges of individual shipping on... A tool used by the common LTL freight carriers have a dedicated ocean freight rate is a one year.! Definitions fak rates ocean freight meaning over 1500 useful international trade terms articles related to your question ICC ) Gate term ( )...