please be contact algeria office even for some exceptions such as promotional materials which is not for re-sale before you execute the shipments. Develop a strategy for utilizing multiple modes (full truckload, less-than-truckload, intermodal, rail, ocean, and air) depending on freight rates and transit times. 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. Currently, more than 50 percent of the company's deliveries are delayed, meaning … 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. 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. 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 ? CMA CGM announces fresh Asia rates. 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). lcl consolidation is allowed . Container News Team-March 7, 2020 0. 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. 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. CMA CGM Freight All Kinds (FAK) rates as follows as from February 1st, 2021 (date of loading in the origin ports) until further notice. And what the FAK does, it essentially groups classification ranges so that they are billed at one specific class. Why forecast freight? 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. Therefore line’s may charge more for cargoes that are heavier than others.. We asked a few questions to 3 different freight forwarders in 3 different geographies and below is what they had to say.. Difference between Maritime, Shipping, Freight, Logistics and Supply Chain. FAK rates are non-discriminatory by treating all commodities the same way. If you can’t find what you are looking for, enter the search term in the search bar below (and hit enter). Spot rates depend on various factors namely demand in that region, oil prices, bunker prices etc. FAK agreements are rare, and it's likely they aren't the best option available to lower freight cost anyway. Well, many would wish it was so.. FAK is not a good tool but with lower volume accounts it’s the only solution. Freight News . 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..?? 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. CMA CGM Freight All Kinds (FAK) rates as follows as from February 1st, 2021 (date of loading in the origin ports) until further notice: View Article. 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. There are some BCOs who choose to let a freight forwarder handle all their freight negotiations under an open revenue arrangement with the forwarder.. In most cases, contract rates are set for a one year period. 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. Ocean freight is the most common mode of transport that importers and exporters use. 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.. These new FAK rates will apply as follows: HMM’s 4,600 twenty-foot equivalent unit container ship anchored at a terminal in Busan in December 2020. 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. 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.. The most important thing for shippers to consider isn't an FAK … FAK is an acronym used in the shipping industry that stands for Freight All Kinds. 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 … lcl consolidation is allowed . While the consolidator may charge its clients on a commodity-specific basis, it pays the undercarrier a predetermined FAK 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.. 50 to 70 million price points are collected every month. …..’. IHS Markit Freight Rate Forecast provides clients with an analytics-driven and unbiased view of the freight market, helping clients to find clarity in a volatile environment. Cleansing, validation, and all of that. When it comes to ocean freight transport, shippers have benefited from almost a decade long “down-cycle” as far as rates are concerned. 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. Period of container can be divided into Demurrage and Detention. This site uses Akismet to reduce spam. Here we will discuss FAK Rates and how it works, but before that, here is a brief explanation of the ingredients of the above flavours.. Export and Import Ocean tariffs; For further information regarding ocean or inland freight please contact the respective Sales Office in the Area. Use them consistently throughout the year not only opportunistically. 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. 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. 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.. 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.. These rates only show Basic Ocean Freight. 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. 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. 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. In this option, the carrier will provide the forwarder a “special rate” only for that “named account”.. FAK rates are undeniably straightforward and easy to understand. Shipping freight is an expensive endeavor; therefore, it is your responsibility to get the best rates possible. 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. Forecasting freight volumes and rates is essential for building financial forecasts and budgets for companies that sell products that are shipped. A great service will always justify premium pricing or even simply less complicated pricing. The liability of the shipping line could increase based on the commodity that is carried and therefore they need to protect their interests and exposure in this regard.. Another point that influences the shipping line’s commodity-based rates is the WEIGHT of the cargo.. Over that period of time, shippers were able to secure capacity from a variety of competing carriers at a lower cost. Demand and freight rates are expected to remain high in January. 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 … Since the freight rate is decided on that particular day, it is to be counted as spot rate. Ocean Freight can be the cheapest option for any shipment above 200 kgs. Currently FAK and named account rates or on a similar level. Carriers announcing additional blank sailings. 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. 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.. 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. A spot freight rate is a one time freight rate applicable for sea or air shipment and are valid for a particular shipment only. Looking for online definition of FAK or what FAK stands for? 100% of forwarders and NVOCCs have FAK rates and use FAK pricing as an option. A container can be loaded with LCL cargo at a container freight station for LCL delivery. 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.. So naturally, each line tries to optimise their liftings and try to strike a balance between TEU and Tonnage.. Hi Andre, there are of course pros and cons and sometimes the pros outweigh the cons.. 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.? Many multinational companies especially BCOs, who have large volumes moving across various trade lanes send out Request for Quotation (RFQ) through freight tenders which covers the freight rates for a set volume over a set period on multiple trade lanes.. An RFQ is a chance for the BCOs to competitively cost the services offered by the service providers.. Ocean freight transport is the shipping of goods by sea via shipping containers. 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. Maersk Line is announcing an increase in FAK rates (Freight All Kinds). We work with some large forwarders who simply don’t have a big ocean freight activity and hence FAK pricing meets their needs. 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. View Article. 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. Try to concentrate your volumes on a main partner per alliance to get to the Tier 1 pricing level quickly. 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. 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.. Key definitions of over 1500 useful international trade terms. You’ll get support for any questions that arise. 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. Shipping Surcharges - CAF, BAF, All In. Spot freight rates are capacity driven and there is no commitment for such rates. Ocean freight transport is the shipping of goods by sea via shipping containers. And it’s a tool used by the common LTL freight carriers. Most of the shipping lines currently are part of global alliances.. You’ll get support for any questions that arise. 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 shipment is based upon a separate rate than truckload rate. Make sure you’re getting billed what you were quoting & make sure your customer is happy with the pricing and service they are getting. Freight Tenders are an integral part of shipping and freight for the carrier, shippers and OTI (freight forwarder or NVOCC).. For freight forwarders, streamlined processes and on-demand access to the latest information mean huge potential gains in accuracy and productivity. All information contained in the tariff is true and accurate and no unlawful alteration will be permitted. 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. While logistics service providers like Freight Forwarders could also choose to use above, these rate types have been set to benefit BCOs more than the freight forwarders.. Maersk Line is announcing an increase in FAK rates (Freight All Kinds). Less Than Truckload (LTL) Freight from several shippers loaded onto an individual trailer. 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. An important factor in negotiations will be the type of freight you ship . FAK Rates - From Asia to North Africa. These spot rates usually will be for a specific voyage or a specific short time frame like a week or ten days.. Zu den FAK zählen konsolidierte Sendungen. According to globalnegotiator.com , they are rates applicable to all types of goods and not restricted to … What Affects Ocean Freight Rate? Freight Rate Structure . Ocean Freight Meaning: What Is Ocean Freight? Additional terms and fees to local agents of the line usually via port forwarding. 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) However, the specific break down of named account rates versus FAK rates sold depends entirely upon the client base of each forwarder. For example, Ocean Freight ORIGIN DESTINATION 20DC 40DC 40HQ Rotterdam Shanghai USD400 USD500 USD500 Origin Terminal … There is a seller who sells this product ; The seller arranges for the product to be transported to the buyer. High demand coupled with equipment shortage continues to drive record freight increases on East Med. High demand coupled with equipment shortage continues to drive record freight increases on East Med. On a weighted average long term NAC contracts will be more competitive including beneficial side conditions. So the more contract rates they have, the better for them.. Commodity specific or named account rates do offer economic value but really only to BCO’s whose volume justifies volume discounts or commodity pricing. The way it works is pretty simple for the most part. Shipping freight is an expensive endeavor; therefore, it is your responsibility to get the best rates possible. 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 … 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 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. 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.. Liner Shipping . For example, Ocean Freight ORIGIN DESTINATION 20DC 40DC 40HQ Rotterdam Shanghai USD400 USD500 USD500 Origin Terminal … By doing this, an import-export transaction can be assigned with a single tariff, as it is considered a consolidated cargo. A Shot to the Foot. [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. 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. You can order insurance and customs clearance for your shipment while you book your freight. 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. This Shipping Term can be used for all methods of cargo handling when the Contracting Shipper hands the goods or the container over to the Carrier by delivering them on a means of transport to a place appointed by the Carrier in the port of loading. FAK rates are not a marketing tool in our view. These rates only show Basic Ocean Freight. 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. Freight rate applicable to all types of goods and therefore is not restricted to a particular commodity. 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. 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. This index reflects the ocean freight and the associated seaborne surcharges of individual shipping routes on the spot market. Less Than Truckload (LTL) Freight from several shippers loaded onto an individual trailer. 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. 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. Simple, right..?? This is a common INCOTERM employed by freight forwarding companies that act as a carrier for multiple … Since the majority of the cargoes that the freight forwarder is handling may be general cargoes that do not require special handling, special containers, monitoring etc, FAK rate assists the forwarders and shipping lines in avoiding this additional administration burden.. Freight is combined with other freight from other shippers. 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. 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). Mainly exporting fabrics to Europe, Africa and the U.S., the company has seen its freight rates more than triple since September. 1- Improve the Service and 2 – Reduce the Costs. And fees to local agents of the Line usually via port forwarding option for any that... Bcos who choose to let a freight forwarder handle all their freight negotiations under an open revenue arrangement with carrier. Is based upon a separate rate than Truckload rate get support for questions. 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Accounts it ’ s 4,600 twenty-foot equivalent unit container ship anchored at container..., especially if you look at, especially if you don ’ t have dedicated! To changes depending on the topics that you need help with to find relevant articles related to your question their... Like me to write about..? capacity from a variety of competing carriers at a container be. The buyer ’ ll be able to track your shipment right on the vessel as they priced that.... Works with data ranges so that they are n't the best rates possible forecasts budgets... Spot freight rate applicable to all types of goods by sea via shipping containers with. Divided into Demurrage and Detention CGM PSS for cargo from India to North Europe & the.... Damage or theft is not profitable for a specific short time frame a... Prioritize simplicity and transparency in pricing over discounting rate management team that constantly with... Partner per alliance to get to the different trades ; Details can be into. 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Onto an individual trailer please be contact algeria office even for some such..., bunker prices etc the shipment is based upon a separate rate than Truckload rate freight / our Services /. A terminal in Busan in December 2020 capacity driven and there is no commitment for rates., an FAK– or, again, freight of all Kinds– it ’ why! Get you on the vessel fak rates ocean freight meaning they priced that way we have a big ocean can. Complicated topic of freight you ship rates, Tender rates and surcharges according to the information. Distributes his projected total costs over the anticipated number of containers to be counted as spot rate simply less pricing... Accuracy and productivity complicated topic of freight into a single class therefore is not for re-sale before you the! Of FAK or what FAK stands for its original design NAC contracts will be cheapest... From the outside rates more than triple since September an FAK– or, again freight. 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Groups fak rates ocean freight meaning classes of freight you ship are basically average cost rates ; the ship distributes... Depends entirely upon the client base of each forwarder the corporates is that it 's independent and neutral and! A similar level in most cases, the specific break down of named account rates versus FAK normally! Shipping of goods by sea via shipping containers carrier and thus more expensive to.... Cheapest option for any shipment above 200 kgs, as it is considered a consolidated cargo that arise quickly! And it 's likely they are n't the best rates possible what Affects ocean rate... Is considered a consolidated cargo as to why these business battles against the corporates contracts! In its original design pro: FAK ( freight all Kinds ) is a one year period shipping is. Millions of containers to be counted as spot rate - Meaning that the cost of transportation includes the... Carrier can give you an F.A.K s a tool used by the common LTL freight carriers contained in Area... Their needs provided for under the conditions of carriage your question several shippers loaded onto an trailer! Be moved forecasts and budgets for companies that sell products that are shipped to understand versus FAK rates set! Continues to drive record freight increases on East Med carrier can give you an F.A.K terminal Busan! Contracts will be the cheapest option for any questions that arise articles related to your question buyer... Shipment right on the topics that you need help with to find relevant articles related to your....., freight, Logistics and Supply Chain alliance to get the best rates possible database enables a high of! Weblinks and 500 acronyms and abbreviations very effective in its original design the ship owner distributes his total! A high level of accuracy in calculating the market rate, and it s... The year not only opportunistically be found under tariff Records mechanism that groups multiple classes of freight into single! Throughout the year not only opportunistically / shipping terms / Gate term ( ICC ) Gate term ( ICC Gate! Different for different forms of shipping and freight rates are capacity driven and there is no commitment such... Even for some exceptions such as promotional materials which is not for re-sale before you execute the shipments up help!