Methods for Calculating Freight Charges for Breakbulk Cargo

 

There are four primary methods for calculating the freight charges for breakbulk cargo:

 

1. Freight Based on M3 (Cubic Meter): For cargo where the volume (M3) is greater than the weight (hereinafter, called "Bulky cargo"), the freight is calculated based on volume. For example, if the freight rate is $50, it would be expressed as $50 per M3.

2. Freight Based on Weight: For cargo where the weight is greater than the volume (hereinafter, called "Heavy cargo"), the freight is calculated based on weight. For example, if the freight rate is $50, it would be expressed as $50 per ton.

3. Comparing Volume and Weight to Calculate Freight: When there are multiple packages with some being Bulky cargo and others Heavy cargo, the freight is calculated based on the larger measure of either volume or weight. For example, if the freight rate is $50, it would be expressed as $50 per revenue ton. This method is known as the Revenue ton calculation.

4. Freight per Shipment: For heavy or lengthy cargo that require special arrangements, the freight is calculated per shipment. This method is known as Lumpsum. For example, if the freight rate is $50,000, it would be expressed as Lumpsum $50,000 per shipment.

5. Additional port calls to load 

For additional port calls to load, there is a risk that the actual tonnage loaded will be less than the estimated tonnage, leading to a loss. To mitigate this risk, the freight charges are determined as follows: until the cargo tonnage reaches a certain level, a lump sum freight charge is applied, and if this level is exceeded, the freight is charged per revenue ton. 

For example, up to 100 tons, a lump sum of $50,000 is charged, and for the portion exceeding 100 tons, $50 per revenue ton is charged. 

 

This condition can be expressed as: "Lumpsum $50,000 up to 100 revenue tons per shipment, and if exceeding 100 revenue tons, $50 per revenue ton".

 

Alternatively, this condition can be expressed as follows: "The freight charge is $50 per revenue ton, with a minimum cargo volume of 100 tons guaranteed." 

 

This ensures either the minimum freight charge or the minimum cargo volume is guaranteed.