Components of a Freight Quote: What's included?

Shiplyst Ocean Freight quote breakup

When goods are shipped in different ways, this is called "freight," and the costs are listed in a "freight quotation." Ocean freight quotations typically comprise up to five components, which are:

1. Origin of Haulage

2. Origin Charges

3. Freight Charges

4. Destination Charges

5. Destination Haulage

Haulage at the origin or destination is the cost of moving goods from the inland point to the port (the origin) or from the port to the inland point (the destination).

Depending on the incoterms, haulage, and freight may be added together and given as a single price.

Freight rates are based on a number of things, such as the type of freight, the way it is transported, the weight of the cargo, the type of goods, and the distance traveled. In some trade lanes, the freight rate includes the bunker adjustment factor (BAF) and the currency adjustment factor (CAF). Some countries may also charge extra fees, such as piracy risk surcharges, canal surcharges, and congestion surcharges, when a ship arrives there.

Origin charges include customs formalities, handling charges (loading, temporary storage, unloading), and documentation fees. Destination charges include entry filing, customs, destination handling charges, and documentation fees at the entry port.

To avoid extra charges on the freight invoice, it's important for both the shipper and the recipient to understand what the freight quote says about costs.