Basic Types
1. Conference line vessels:
These are ships operated by a line, which is a member of a shipping conference. Conferences are groups of shipping line. They establish common freight rates, regular scheduled departures and common shipping conditions. They provide international liner services for the carriage of Cargo on a specified route or routes.
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2. Non-conference vessels:
They are ships operated by shipping companies giving scheduled services but quoting freight rates independently.
3. Tramp ships:
These are ships operated by shipping companies giving scheduled services but quoting freight rates independently.
4. Charter ships:
These ships do not follow regular routes but travel as and where cargoes are available.
Of these types of shipping, the most commonly used are Conference Line Vessels, which make regular journeys and offer special discounts to exporters who use them regularly. The exporter or his Freight Forwarder may make such special arrangements with Conference Lines.
The Shipping Company will charge either by weight (W) or measure (M), whichever is greater.
In the case of particularly valuable cargo, the shipping company may charge an ad valorem freight rate. That is, an extra charge because the goods are so valuable, such as might be the case with a consignment of furs.
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A minimum charge may apply to freight charges if the goods are too small for a Shipping company to handle them strictly by volume or weight.
Freight rates may also be increased by a special surcharge in special situations, such as local unrest or disaster or the need for a longer journey than necessary, as for example, when the Suez Canal was closed.
Another possible form of surcharge is after a major devaluation of currency. Or there may be a ‘congestion surcharge’ which may be as high as 75%.
It is important that these possible ‘extras’ are taken into account when freight rates are estimated.