Freight rate

This cost of transporting goods reflects a number of factors besides basic transport costs, such as the nature of the commodity. Non-breakable, non-perishable items, like coal, are carried most cheaply as they can be carried in bulk on open wagons. The more careful the handling required, the more expensive is the freight rate. Sophisticated manufactured goods can bear high freight rates because of their greater value. Raw materials are carried for less so that they can be moved over greater distances.

Distance is an important factor. Many freight rates are tapered; that is, the rate per tonne-mile or tonne-kilometre drops as the distance increases, but this change in rates is expressed in a series of distance ‘bands’ so that, on a graph, the relationship between cost over unit distance and distance would appear as a series of downward steps rather than a smooth diagonal line.

Competition between alternative modes of transport can also cut freight rates. Thus, because of competition with the New York State Barge Canal, rail freight rates from Chicago to New York are less than from Chicago to Philadelphia, even though the latter journey is slightly shorter.

The noun has one meaning:

Meaning #1: the charge for transporting something by common carrier
  Synonyms: freight, freightage

Admiralty law

History

Amalfian Laws Hanseatic League

Features

Freight rate · General average Marine insurance · Marine salvage Maritime lien · Ship transport · Shipping

Contracts of affreightment

Bill of lading · Charter-party

Types of charter-party

Bareboat charter · Demise charter Time charter · Voyage charter

Parties

Carrier · Charterer · Consignee Consignor · Shipbroker · Ship-manager Ship-owner · Shipper · Stevedore

Judiciary

Admiralty court Vice admiralty court

International conventions

Carriage of Goods by Sea Act Hague-Visby Rules Hamburg Rules Rotterdam Rules UNCLOS

International organisations

International Maritime Organization London Maritime Arbitrators Association

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A freight rate is a price at which a certain cargo/freight is delivered from one point to another. The price depends on the form of the cargo, the mode of transport (truck, ship, aircraft), the weight of the cargo, and the distance to the delivery destination. Many shipping services, especially air carriers, use dimensional weight for calculating the price, which takes into account both weight and volume of the cargo. For example, bulk coal long-distance rates in America are approximately 1 cent/ton-mile.^[1] So a 100 car train, each carrying 100 tons, over a distance of 1000 miles, would cost $100,000.

References

1. ^ Coal Transportation: Rates and Trends

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