Freight in cargo transportation
Logistics involves a long list of concepts and terms, with “freight” often being one of the most commonly used. Let’s explore what freight means.
Freight is the payment for transporting cargo by various types of vehicles, as outlined in contracts or international agreements.
Initially, “freight” applied solely to maritime transportation. Later, with the emergence of cargo air transportation, the term “air freight” was introduced and applied to aviation. In modern terminology, “freight” also applies to land transport.
Types of Freight
Transport for freight can be provided for a single trip or multiple shipments. Depending on the type of shipment, there are the following types of freight:
- International;
- Interregional;
- Domestic.
Today, many types of mixed freight agreements exist, with the most common being daily-charter, slot-charter, and ship management contracts.
Freight transportation can occur on a single mode of transport, like a ship, or multiple modes, such as ship and train.
What Determines the Cost of Freight?
Freight service payments are defined in the freight contract and are generally based on:
- Distance and route specifics;
- Cargo dimensions;
- Type of packaging;
- Loading and unloading processes;
- Customs and duty fees;
- Seasonal pricing policies of transport companies.
Using container freight is an economical choice. It’s a universal option across various transport modes and saves on time spent loading and unloading, storage rental and more. Containers are produced to specific standards that work across different transport modes, but the cargo must also meet specified requirements.
Advantages and Disadvantages of Freight
One of the advantages of freight is transportation by sea, which takes longer, but allows for larger volumes at significantly lower costs — even as sea freight costs hit record highs today.
A base rate for freight transportation is formed based on the route’s distance and the cargo’s size. Additionally, the customer is charged for handling in the port, preparation of freight documents and fuel and oil charges, compensating for the vessel owner’s variable costs.
Air freight, on the other hand, enables quick movement of urgent and valuable cargo, like medical supplies, urgently needed parts, cultural artifacts or valuables. The cost of air freight depends on factors like cargo dimensions, departure and destination airports, type of goods, cargo weight and the item’s value.