Although most orders for garments are placed by buyers
on FOB basis, with buyers to pay for freight at the shipping destination, it is
still necessary for the shipper or the agent to know how to calculate sea freight
and air freight as buyers always need to know how much freight the merchandise
cost per dz. If you are required to sell on CIF basis, (with the shipper to
prepay for freight at the shipping port) you will need to calculate the freight
accurately for your own costing.
Sea freight: Sea freight
is usually charged based on volume—how much per CBM (cubic meter)—very rarely
by weight as “density cargo”. In fact ANERA (Asia North America eastbound rate
agreement) has designed the freight tariff more based on the usual value of the
type of goods, than the usual weight of them, taking into consideration that
for low value merchandise they should give a low freight rate in order to make
it possible for the importers to buy goods overseas. However, for high value
merchandise, they should charge a high freight rate, as it is believed that the
buyer can afford to pay more on freight. The have designed the freight tariff
in such a way that everybody can do business and there is sufficient profit for
the shipping lines.
Container size
|
Calculated Capacity
|
Practical capacity
|
Container FCL rate
|
FCL rate for CBM
|
LCL Rate per CBM
|
20” Capacity
|
29.5 CBM
|
27 CBM
|
3500
|
130
|
160
|
40” Normal
|
61.32 CBM
|
54 CBM
|
5000
|
92
|
160
|
40” Hi Cube
|
69.15 CBM
|
62 CBM
|
6500
|
92
|
160
|
Note: FCL: Full
container Loading
LCL: Loose container Loading
LCL: Loose container Loading
If you ship very
heavy goods as loose cargo because the size of the shipment is very small, the
shipping lines will charge you by weight or by volume whichever is higher.
1 CBM (100 cm X 100 cm X 100 cm) = 1000 Kg
1 CBM (100 cm X 100 cm X 100 cm) = 1000 Kg
Air
freight: Unlike
sea freight, the airlines have decided to charge for the heavy merchandise
(high density goods) by weight, and lightweight merchandise (low density goods)
by volume. However, as airplanes can take less weight than ocean liners, the
way they
Set the standard, in the garment industry, when you ship goods by air, you have a 70% chance to be charged by weight, about 30% chance by volume.
The followings are the relationship between weight and volume as set by IATA (International air transport association).
From most shipping locations in the Far East to the U.S. destinations and Canada 7000 cubic cm = 1 kilo.
From certain locations in the Far east to the U.S. destinations and Canada 6000 cubic cm = 1 kilo
Therefore when you have low density goods to ship by air, in order to determine if you should try to make the cartons as small as possible to save freight. First you check with the local air forwarding agent by asking him in the country where you are, how many cubic cm is considered 1 kilo in weight. They will tell you either 7000 or 6000. This is the answer you need.
Then you physically
check the weight and measurements of the good s packed for the air shipment.
Now we have the 3 answers as follows, for example:
The country is Bangladesh and the formula is 6000 cubic cm = 1 kilo
The measurements of the cartons are 50cmX 60cmX 40cm
The gross weight of the cartons are 16 kilo per carton.
The country is Bangladesh and the formula is 6000 cubic cm = 1 kilo
The measurements of the cartons are 50cmX 60cmX 40cm
The gross weight of the cartons are 16 kilo per carton.
Now let us find out if we should try to make
the cartons smaller to save air freight by doing the following calculation,
Multiply 5 by 60 by 40 = 120000 cubic cm.
120000 cubic cm divided by 6000= 20 kilo
Now you know, by volume the one carton is of 2 kilo, but by actual weight the carton is of only 16 kilo. You also know the airline will charge whichever is higher, in this case, they will charge you for 20 kilo, by volume. If the air freight rate is 2.80 per kilo this carton will cost you $56.00.
Multiply 5 by 60 by 40 = 120000 cubic cm.
120000 cubic cm divided by 6000= 20 kilo
Now you know, by volume the one carton is of 2 kilo, but by actual weight the carton is of only 16 kilo. You also know the airline will charge whichever is higher, in this case, they will charge you for 20 kilo, by volume. If the air freight rate is 2.80 per kilo this carton will cost you $56.00.
Now, in order to save some
money, let us try to make the carton smaller, usually by cutting the height of
the carton. Let’s say we have succeeded in cutting down the height by 5 cm, and
see how much money we can save.
** Original size of the carton: 50 X 60 X 35 cm (=20 kilo)
** Now cut down to 50 X60 X 35 cm= 105000 cubic cm.
105000 / 6000 = 17.5 kilo
Now by using the new carton, we have saved 2.5 kilo and this carton will cost only $ 49.00 (17.5 Kilo X 2.80)
Courtesy: DBL group, Bangladesh
** Original size of the carton: 50 X 60 X 35 cm (=20 kilo)
** Now cut down to 50 X60 X 35 cm= 105000 cubic cm.
105000 / 6000 = 17.5 kilo
Now by using the new carton, we have saved 2.5 kilo and this carton will cost only $ 49.00 (17.5 Kilo X 2.80)
Courtesy: DBL group, Bangladesh