Submitted by: Submitted by korinaki
Views: 307
Words: 352
Pages: 2
Category: Business and Industry
Date Submitted: 03/15/2011 07:58 PM
The amount that the carrier (e.g. shipowner or
charterer) charges for transporting cargo overseas is
known as the freight rate. In addition to the freight rate,
a carrier may levy other charges, such as BAF, CAF
and THC,1 war risk premiums, piracy surcharges, a
container sealing fee, an electronic release of cargo
fee, and late fees (e.g. for late collection of a bill of
lading, or late issuance of shipping instructions).2, 3
Freight rates can be obtained through an agent or a
shipbroker. In some cases, such as in the liner sector,
notice of freight rates has traditionally been published
in newspapers. Today, the internet is the preferred
medium. Some shipbrokers also calculate, maintain
and publish indices together with historical data to give
an indication of how the market is performing. Each
segment of the market (e.g. tanker, bulk, containers
etc.) has it own characteristics and is influenced by
different factors. In the bulk cargo market, vessels
are usually chartered for a specific period of time or
for a particular voyage. Rates for time charters will be
different from voyage charters, with the former more
focused on the long-term trend. In general, freight
rates are affected by the supply of vessels and by the
demand for the goods being carried. Thus, transport
services are a derived demand (that is to say, it is not
the transport service per se that is demanded, but the
good that is being moved). The number of competitors,
the availability of alternative transport modes, and
short-term fluctuations in demand and supply will also
have an effect on prices. Most manufactured goods
are shipped by container vessels, and competition
for transport is high. When there is no demand for
manufactured goods, these vessels may sometimes
carry alternative cargoes, such as scrap goods for
recycling. However, oil can only be shipped in tankers
(pipelines excepted), and therefore wild fluctuations
in freight rates can occur. Other...