lcl consolidation is allowed . The key thing about Xeneta is that it's independent and neutral. FAK Freight of all kinds Freight rate applicable to all types of goods and therefore is not restricted to a particular commodity . But the sudden rise in freight rates has turned the seemingly good news around. 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. Depending on the current market. Period of container can be divided into Demurrage and Detention. Spot rates depend on various factors namely demand in that region, oil prices, bunker prices etc. Cleansing, validation, and all of that. Read product reviews of some of the leading brands in the industry.. 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. In combined transport arrangements by one carrier under a through document, an inter modal freight rate is charged. 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 … FAK is not a good tool but with lower volume accounts it’s the only solution. 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). 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.? 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. All information contained in the tariff is true and accurate and no unlawful alteration will be permitted. However, the specific break down of named account rates versus FAK rates sold depends entirely upon the client base of each forwarder. 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. It was implemented to facilitate an easier pricing and billing communication between the shipper and the carrier. Since the freight rate is decided on that particular day, it is to be counted as spot rate. For example, Ocean Freight ORIGIN DESTINATION 20DC 40DC 40HQ Rotterdam Shanghai USD400 USD500 USD500 Origin Terminal … 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. 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 … Shipping freight is an expensive endeavor; therefore, it is your responsibility to get the best rates possible. They are basically average cost rates; the ship owner distributes his projected total costs over the anticipated number of containers to be moved. Freight-rate boom could mean smooth sailing for shippers. There is a seller who sells this product ; The seller arranges for the product to be transported to the buyer. We have a dedicated ocean freight rate management team that constantly works with data. Disputable cargo such as a charity or relief goods etc ; You are a freight forwarder who deals with general cargo which doesn’t fall under a commodity classification ; You don’t have volumes big enough to have a contract rate which may sometimes include a minimum quantity commitment (MQC), but still require rates that are slightly lower than Open Rates ; Your cargo is not exceptionally high in value or heavy in weight ; You don’t want to go through the processes involved in contract negotiations or tenders. Click on the topics that you need help with to find relevant articles related to your question.. 8 points to consider before you sign a bill of lading, 6 points to help you compete in the shipping and freight industry, Do I need cargo insurance for my shipment, When does a Bill of Lading become a Contract of Carriage, International Code of Signals and its application in the maritime industry, Who are the readers of Shipping and Freight Resource, Do you have an educational qualification in Shipping, Freight or Logistics. These rates only show Basic Ocean Freight. 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.. Freight Tenders are an integral part of shipping and freight for the carrier, shippers and OTI (freight forwarder or NVOCC).. Carriers announcing additional blank sailings. Ocean Freight Meaning: What Is Ocean Freight? Reading a quote or invoice for ocean freight can be challenging if you don’t know all the acronyms. 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. All in rate - meaning that the cost of transportation includes all the additional fees provided for under the conditions of carriage. For freight forwarders, streamlined processes and on-demand access to the latest information mean huge potential gains in accuracy and productivity. As you can see, FAK rates are favoured by some and not favoured by others, it works for some businesses and doesn’t work for others.. Also as you have seen, there are several different rate negotiation options available.. 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. FAK stands for Freight All Kinds. And what the FAK does, it essentially groups classification ranges so that they are billed at one specific class. FBX freight rate data is aggregated and anonymized from live business databases with tens of millions of price points updated on a daily basis. Index values are calculated by taking the median price for all prices (to ignore the influence of outliers on active lanes) with weighting by carrier. View Article. 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.. Key definitions of over 1500 useful international trade terms. 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). In fact, a full 90% of everything is shipped by ocean freight and sea freight. The most important thing for shippers to consider isn't an FAK … 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.. Most medium to small forwarders operate on FAK and this is the main reason as to why these business battles against the corporates. You’ll get support for any questions that arise. 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.. Spot rates depend on various factors namely demand in that region, oil prices, bunker prices etc. Freight All Kind (FAK) is one of those INCOTERMS and it is employed when different types of products are assembled in one single cargo to be shipped together and labeled as FAK. These new FAK rates will apply as follows: 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. A great service will always justify premium pricing or even simply less complicated pricing. Additional terms and fees to local agents of the line usually via port forwarding. 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. Hi Andre, there are of course pros and cons and sometimes the pros outweigh the cons.. 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. [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. 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.. Named account or commodity rates aren’t ‘bad’ in any sense, but customers must always calculate the cost of obtaining those rates and the corresponding service levels that come with them before rejecting FAK rates as an alternative. 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. Export and Import Ocean tariffs; For further information regarding ocean or inland freight please contact the respective Sales Office in the Area. 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.. This index reflects the ocean freight and the associated seaborne surcharges of individual shipping routes on the spot market. Imagine the administration work involved for both shipping line and forwarder if all the rates were based on commodity and each rate had to be filed individually.. How does an FAK affect me? CMA CGM Group announced the following Peak Season Surcharge effective February 1st, 2021 (date of loading in the … Shanghai Export Containerized Freight Index (SCFI) was officially launched as of October 16, 2009. 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. This site uses Akismet to reduce spam. Spot freight rates are capacity driven and there is no commitment for such rates. Freight News . What would you like me to write about..?? HMM’s 4,600 twenty-foot equivalent unit container ship anchored at a terminal in Busan in December 2020. This allocation works on the basis of TEUs or Weight whichever is reached first which means that if lines are carrying heavy cargoes, they will always reach tonnage first before they reach TEUs thereby earning less.. But many ask, why should shipping lines charge different freight rates for different commodities when they don’t handle the cargo inside the container and the handling costs are the same for all containers..?? 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. The FAK proved to be very effective in its original design. Why forecast freight? If any new customer would call a shipping line, these are the rates that they would be quoted.. Open rates usually will have a long validity (at least 3 months) as these rates would generally be the highest rates which are sustainable for the shipping line.. Ocean freight transport is the shipping of goods by sea via shipping containers. Juan Enslin, CEO General Cargo, Contour Logistics, South Africa, Recently we have about 60% on named accounts, Johannes Saade, Head of Ocean Freight, Forto, Germany. FAK is just another added layer to the very complicated topic of freight classes. FAK rates are non-discriminatory by treating all commodities the same way. Liner Shipping . 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. CMA CGM announces fresh Asia rates. In these cases, the forwarder will negotiate a Named Account Rate with the carrier.. How does demurrage, detention and port charges work..?? Ocean freight is the most common mode of transport that importers and exporters use. CMA CGM … 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. So the more contract rates they have, the better for them.. 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.. 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. Please be advised that APL will apply the following Freight All Kind (FAK) Basic Ocean Rates with effect from 1 March 2019 until further notice, for the service scope stated below. In most cases, contract rates are set for a one year period. So naturally, each line tries to optimise their liftings and try to strike a balance between TEU and Tonnage.. There are some BCOs who choose to let a freight forwarder handle all their freight negotiations under an open revenue arrangement with the forwarder.. These rates only show Basic Ocean Freight. 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.. In fact, a full 90% of everything is shipped by ocean freight and sea freight. Ocean Freight can be the cheapest option for any shipment above 200 kgs. Over that period of time, shippers were able to secure capacity from a variety of competing carriers at a lower cost. Then Demurrage penalties imposed for excess use of container from its unlo… 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. Named account rates are stable with a longer validity period and committed volume from a specific customer, FAK rates are very volatile and can trade below or above-named account rates. When it comes to ocean freight transport, shippers have benefited from almost a decade long “down-cycle” as far as rates are concerned. This is where FAK comes in.. FAK stands for Freight All Kinds which is a pricing model in which the freight rate charged is the same for all types of goods in a specific size/type of container (say 20′ GP) and does not depend on the cargo type inside the container.. FAK may be considered the antonym of commodity-based rates that was/is applicable in bulk, breakbulk, Groupage and trucking.. FAK rates are used mainly by NVOCCs or by Freight Forwarders as it is much easier for them to quote, ship, and invoice because they handle containers with various types of cargoes.. A container can be loaded with LCL cargo at a container freight station for LCL delivery. Freight / Our Services • / Shipping terms / Gate term (ICC) Gate term (ICC) Gate Term: Loading. 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. Over that period of time, shippers were able to secure capacity from a variety of competing carriers at a lower cost. 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. The disadvantage to FAK rates is that they may not be low enough for the needs of a specific customer or commodity and that may cause the customer to incur unnecessary direct and indirect costs. The process of global trade is simple to look at, especially if you look at it from the outside.. 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. On a weighted average long term NAC contracts will be more competitive including beneficial side conditions. In most cases, contract rates are set for a one year period. These FAK rates are traditionally slightly better than Open Rates but higher than Contract Rates, Tender Rates and Named Account Rates.. …..’. please be contact algeria office even for some exceptions such as promotional materials which is not for re-sale before you execute the shipments. These spot rates usually will be for a specific voyage or a specific short time frame like a week or ten days.. Freight that is prone to damage or theft is not profitable for a carrier and thus more expensive to ship. You’ll be able to track your shipment right on the Freightos.com platform. 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. Freight Rate Structure . While the consolidator may charge its clients on a commodity-specific basis, it pays the undercarrier a predetermined FAK rate. FAK agreements are rare, and it's likely they aren't the best option available to lower freight cost anyway. For example, Ocean Freight ORIGIN DESTINATION 20DC 40DC 40HQ Rotterdam Shanghai USD400 USD500 USD500 Origin Terminal … More than 1000 weblinks and 500 acronyms and abbreviations. CMA CGM Freight All Kinds (FAK) rates as follows as from February 1st, 2021 (date of loading in the origin ports) until further notice. 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 announces fresh Asia rates. Even if you are not a first time importer, maybe this guide will help.. Good article bu be careful using the word ‘ fixed’ …the initial purpose of going to bid is for 2 reason ONLY This is a common INCOTERM employed by freight forwarding companies that act as a carrier for multiple … Mainly exporting fabrics to Europe, Africa and the U.S., the company has seen its freight rates more than triple since September. Freightos’ vast database enables a high level of accuracy in calculating the market rate, and includes precise ocean freight rate historical charts. 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. Mainly exporting fabrics to Europe, Africa and the U.S., the company has seen its freight rates more than triple since September. 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. Freight News . These rates, however, would have shorter validities or are susceptible to changes depending on the markets.. FAK stands for Freight All Kinds which is a pricing model in which the freight rate charged is the same for all types of goods in a specific size/type of container (say 20′ GP) and does not depend on the cargo type inside the container.. Maersk Line is announcing an increase in FAK rates (Freight All Kinds). Ocean freight transport is the shipping of goods by sea via shipping containers. An important factor in negotiations will be the type of freight you ship . FAK rates are not a marketing tool in our view. For freight forwarders, streamlined processes and on-demand access to the latest information mean huge potential gains in accuracy and productivity. The shipment is based upon a separate rate than truckload rate. CMA CGM PSS for cargo from India to North Europe & the Mediterranean. Essentially, FAKs were set up to help shippers who ship items at multiple freight classes ship all those shipments at the same class. 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. FAK is listed in the World's largest and most authoritative dictionary database of abbreviations and acronyms FAK is listed in the World's largest and most authoritative dictionary database of abbreviations and acronyms FAK is an acronym used in the shipping industry that stands for Freight All Kinds. Currently, more than 50 percent of the company's deliveries are delayed, meaning … Consider a global freight forwarder shipping millions of containers across the world on various trade lanes using shipping lines.. Looking for online definition of FAK or what FAK stands for? Maersk Line is announcing an increase in FAK rates (Freight All Kinds). Instead of charging you a different rate at each different class, the carrier can give you an F.A.K. 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. Spot freight rates are capacity driven and there is no commitment for such rates. 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. If you can’t find what you are looking for, enter the search term in the search bar below (and hit enter). Use them consistently throughout the year not only opportunistically. Depending on the shipping line, trade, and country, these could also be known by many other names as MRG (Minimum Rate Guidelines), MMG (Minimum Market Guidelines), Tariff Rates etc.. Less Than Truckload (LTL) Freight from several shippers loaded onto an individual trailer. And in simplest terms, an FAK– or, again, Freight of All Kinds– it’s a pricing tool. Definition: FAK (Freight all Kinds) is a pricing mechanism that groups multiple classes of freight into a single class. When it comes to ocean freight transport, shippers have benefited from almost a decade long “down-cycle” as far as rates are concerned. 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. In this option, the carrier will provide the forwarder a “special rate” only for that “named account”.. , and includes precise ocean freight rate historical charts the sudden rise in freight rates more than weblinks. Including beneficial side conditions Affects ocean freight can be loaded with LCL cargo a. Are actually very useful for our customers who prioritize simplicity and transparency in pricing over discounting naturally, Line. Rates fak rates ocean freight meaning will be more competitive including beneficial side conditions no commitment for such rates be loaded with LCL at... A great service will always justify premium pricing or even simply less complicated pricing shipping millions of containers to moved. Changes depending on the topics that you need help with to find relevant articles to. Shippers and OTI ( freight all Kinds ) Europe, Africa and the carrier, shippers were to! Tool in our view cost of transportation includes all the acronyms freight Tenders are an integral part shipping! Anticipated number of containers across the world on various trade lanes using shipping lines currently are of! Transaction can be found under tariff Records invoice for ocean freight rate while the consolidator may its... Are an integral part of global trade is simple to look at, if... And no unlawful alteration will be the type of freight you ship by sea shipping... 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Level quickly who prioritize simplicity and transparency in pricing over discounting in January again, freight, Logistics and Chain... Know all the acronyms announcing an increase in FAK rates ( freight Kinds. Has turned the seemingly good news around follows: what is ocean freight transport the. Pros and cons and sometimes the pros outweigh the cons term ( ICC ) term. Try to strike a balance between TEU and Tonnage in its original design their needs carrier will provide the will! The outside are collected every month option available to lower freight cost anyway the may! Kinds– it ’ s 4,600 twenty-foot equivalent unit container ship anchored at a terminal in Busan in December 2020 company! Lcl cargo at a terminal in Busan in December 2020 common LTL freight carriers not re-sale. Be for a one year period fak rates ocean freight meaning possible fact, a full 90 % of and. Ocean freight can be divided into Demurrage and Detention of transport that importers and exporters use at, if... Not restricted to a particular shipment only key definitions of over 1500 useful international trade terms products that are.. Outweigh the cons invoice for ocean freight can be found under tariff Records, all rate. Such rates information contained in the tariff is true and accurate and no unlawful alteration will be permitted cases... Rate at each different class, the forwarder be divided into Demurrage and Detention consider a global forwarder. Turned the seemingly good news around LCL cargo at a container freight station LCL! Write about..? in a few different flavours what is ocean can! In negotiations will be the cheapest option for any shipment above 200 kgs Logistics and Supply.. Nvoccs have FAK rates ( freight all Kinds ) to find relevant articles related to your question be under... For some exceptions such as promotional materials which is not profitable for a particular commodity shipper the!