Module 7.4 Calculate seafreight and IMO

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7.4 - Calculate seafreight and IMO

International Regulations & Shipping Terms

• IMO (International Maritime Organization) – A specialized agency of the United Nations responsible for regulating shipping. It sets international standards for the safety, security, and environmental performance of international shipping.
• SOLAS (Safety of Life at Sea) – An international maritime treaty that sets minimum safety standards for ships and their equipment to ensure the safety of life at sea.

Freight Calculation & Charges

• Volume vs weight – A concept used in shipping to determine which factor (volume or weight) affects the freight cost more. Freight is typically charged based on the greater of the two measurements.
• Calculate freight – The process of determining the cost to ship goods, which can be based on various factors like distance, cargo weight/volume, and the type of cargo.
• Payment – Refers to the methods and terms by which freight charges and other fees are paid for shipping services.
• Surcharges – Additional fees that may be added to the basic freight cost. These can include factors like fuel costs, terminal fees, or security charges.
• BAF (Bunker Adjustment Factor) – A surcharge applied to cover fluctuations in fuel prices, which impact the cost of shipping.
• CAF (Currency Adjustment Factor) – A surcharge to account for currency exchange rate fluctuations between the time the freight charge is calculated and when it is actually paid.

Surcharges and Charges in Sea Freight

• PCS (Port Congestion Surcharge) – A fee charged when ports are congested, leading to delays in cargo handling.
• LWS (Low Water Surcharge) – A fee applied during periods of low water levels at a port, making it more difficult for vessels to dock or navigate.
• Winter – This may refer to seasonal surcharges or operational adjustments that occur during the winter months, affecting shipping routes or port operations.
• THC (Terminal Handling Charge) – A fee charged for handling cargo at a port or terminal, covering the cost of loading and unloading goods.
• ISPS (International Ship and Port Facility Security Code) – A set of security standards to safeguard ships and ports against threats like terrorism, piracy, or other criminal activity.
• HWC (Hazardous Cargo Charge) – A surcharge for the handling of hazardous materials that require special care, labeling, and regulatory compliance.
• LSS (Local Surcharge) – A surcharge applied to cover local costs that can vary by port or region, such as dock fees or other port-specific charges.
• ERS (Emergency Revenue Surcharge) – A surcharge implemented during emergencies, such as natural disasters, strikes, or other disruptions, to offset increased costs or revenue losses.

Operational Terms in Shipping

• Demurrage – Charges incurred when cargo remains at the port or terminal longer than the agreed-upon time, often due to delays in unloading or customs clearance.
• Detention – Charges for keeping equipment (like containers) beyond the agreed-upon time, often after cargo has been unloaded.
• FOB (Free on Board) Costs breakbulk – A shipping term indicating that the seller is responsible for delivering goods to a port and loading them onto a ship. In breakbulk shipping, cargo is transported in individual pieces rather than containers.
• Cut and run – A shipping term referring to a situation where a ship departs port before completing all its loading or unloading operations, often due to safety concerns, operational issues, or scheduling.
• LINER TERMS – A standard set of terms used in shipping, typically under a liner contract, where a shipping company agrees to transport goods for a set rate, often including provisions for freight rates, loading, unloading, and other services.