Calculation Method for Container Ocean Freight: Billing Based on Minimum Container Utilization Rate
1. What is the Minimum Utilization Rate?
Generally speaking, when liner conferences calculate container ocean freight, they usually only calculate the tonnage of the cargo loaded inside the container and do not charge for the weight or volume of the container itself. However, there is a minimum requirement for the container's loading utilization rate, known as the "minimum utilization rate".
Nevertheless, for some carriers or liner conferences, the freight for the container itself is only not charged when using dedicated container ships to transport containers. When using conventional ships to transport containers, ocean freight is charged based on the total weight (including the weight of the cargo inside the container) or total volume of the container.
2. Main Purpose of the Minimum Utilization Rate
The main purpose of stipulating the minimum container utilization rate is to ensure the carrier's interests by calculating freight based on the corresponding revenue tons at that minimum utilization rate, if the tonnage (weight or volume) of the loaded cargo does not meet the stipulated requirement.
When determining the minimum utilization rate for a container, it usually includes the weight or volume of the pallets. The size of the minimum utilization rate mainly depends on the type and size of the container and the operational strategy followed by the container liner company.
Of course, in the tariff of some liner conferences, the minimum utilization rate of a container is usually only related to the size of the box, without considering the type of container.
3. Forms of Freight Collection Based on Minimum Utilization Rate
Currently, there are three main forms of freight collection based on the container minimum utilization rate: minimum loading tonnage, minimum freight amount, and a hybrid form of the above two.
The minimum loading tonnage can be a weight ton or a volume ton, or it can be a percentage of the container's carrying capacity (payload weight or volume).
The minimum loading tonnage, expressed as weight ton or volume ton, usually varies depending on the type and size of the container, but in some cases, it can also be the same.
When the minimum loading tonnage is determined as a certain percentage of the container's carrying capacity, this percentage is usually, but not always, the same for both the weight capacity and the volume capacity of the container.
The minimum freight amount stipulates a minimum sum of freight per ton or per container, the latter being also referred to as "minimum box rate freight".
As for the hybrid form of the above two, the minimum container utilization rate is determined according to the following methods:
① A certain percentage of the container's weight or volume capacity plus a minimum freight amount stipulated per unit of volume or per container;
② A minimum weight ton or volume ton plus a certain percentage of the container's volume capacity.
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