Surely on more than one occasion you have asked yourself “How do I obtain the costs that logistics providers present to me in their rates?”, whether for the sake of learning or as a form of verification, the question is very valid. To delve into this topic, the first thing we must know is that each type of international cargo transportation has its own way of calculating these costs. Having said that, we must integrate the following concepts into our knowledge to understand how to obtain them:
– Net weight (NW): It is the weight of the product excluding the weight of the packaging, pallet, pallet, freight, or container (tare): “Net Weight = Gross Weight – Tare Weight”.
– Gross weight (GW): The gross weight is what the product weighs plus the packaging, pallet, pallet, freight, and/or container: “Gross Weight = Net Weight + Tare Weight”.
– Tare: The tare weight is that which measures the weight of the packaging, pallet, pallet, freight, and/or container without including the weight of the product or merchandise: “Tare Weight = Gross Weight – Net Weight”.
– Volume: Physical magnitude that expresses the extension of a body in three dimensions, length, width and height, and whose unit in the international system is the cubic meter (m3). To calculate the volume of a
Object multiplies its length by its width and height.
– Density: Magnitude referring to the amount of mass contained in a certain volume.
– Volume weight or volumetric weight: Form of measurement used in the transport and logistics sector for grouping or consolidation of cargo to obtain the equivalence in kilograms of the volume occupied by the merchandise (In FCL it does not apply), in other words, it is based in comparing the size of the packages (volume) with the actual weight of the shipment (gross weight).
The volumetric weight is of vital importance to calculate the transport rate since it is necessary to know if the rate will be determined by the dimension or by the actual weight of the packages. The result obtained from the highest of the 2 will be the one that will be taken. into consideration to calculate the rate, for example: What weighs more, a ton of goose down pillows or a ton of steel? This trick question that at some point in our lives we have surely heard and that with a little After reflection we would have answered that “Both products weigh the same”, in fact there is no difference in weight, but in terms of volume without a doubt the goose down pillows must take up a larger space compared to the ton of steel, This is because the latter has a greater density in a smaller space.
So in summary we can say that the rate of a consolidated freight will be determined
for 2 factors:
The volumetric weight in whose shipments the goods are bulky and light.
The actual weight where the goods are heavy and not very large in size
– Rateable weight, billable weight, chargeable weight, w/m or chargeable weight: It is the largest number between the gross weight and the volume weight and is used to calculate the costs to be invoiced by logistics providers for breakbulk cargo services in relation to what that the load takes up space and what
It really weighs.
LTL: Less-than-truckload or less than full truckload, refers to the transportation of a relatively small load that does not require the entire space of a truck.
LCL: Less Than Full Container Load, this type of maritime cargo transportation refers to the partial loading of goods within a container, that is, without occupying the entire container and sharing its space with the faces of other shippers who are similar or groupable together.
Consolidated Air Transportation: Consolidated air transportation allows us to contract the necessary space that fits our cargo, sharing space with other shippers.
As mentioned at the beginning, each type of transportation has its own particular way of obtaining shipping costs. To do this, the applicable formula or equivalence must be used according to the transportation to be used. These formulas will allow us to obtain the volume weight which We are going to compare it with the gross weight and the highest of the 2 will be our rateable weight with which we will do the calculations to obtain
transfer costs.
Formulas to obtain volume weight
Maritime consolidated (LCL): Volumetric weight (Kg) = volume (m3) x 1,000 Air transport: Volumetric weight (Kg) = volume (m3) x 167 Land consolidated (LTL): Volumetric weight (Kg) = volume (m3) x 333
Equivalences
Maritime consolidated (LCL): 1 m3 = 1 Ton Air transport: 1 m3 = 167 Kg Land consolidated (LTL): 1 m3 = 333.00 kg
How to calculate the rateable weight in LCL maritime transport.
LCL Sea Freight Rate
Sea freight: 25 USD W/M BAF: 15 USD W/M
BL: 65.00 USD per BL
To calculate the cost, we must first calculate the volumetric weight to compare it with the gross weight and determine which of the 2 is the rateable weight.
To begin, we must know the number of packages, pallets, pieces, boxes, etc., that will be sent, as well as the weights and measurements of each of them. There are other values to consider and that will influence the cost of the service such as whether the cargo is not stowable, if it is dangerous or refrigerated, however for practical purposes we will consider that the cargo is stowable, it is general cargo and it is not refrigerated, therefore you need to know this information:
- Number of packages
- Weight per package
- Measurement per package
Having this information we can proceed with the calculation:
Number of packages: 2 pallets
Weight per package: 1) 790.00 kg. 2) 1,010.00kg
Measurements per package: 1) 1.00 * 1.20 * 1.50 mt. 2) 1.00*1.20*1.50mt
Volume=
1) 1.00 * 1.20 * 0.80 mt. = 0.96 m3
2) 1.00 * 1.20 * 1.00 mt = 1.20 m3
Total: 2.16 m3 * 1,000.00 kg = 2,160.00 kg / 1,000.00 kg = 2.16 ton
Gross weight: 1,800.00 kg / 1,000.00 kg = 1.80 ton
To obtain the volume weight in LCL cargo the equivalence is 1 m3 = 1 ton, so we can identify that the highest of the gross weight and volume is the latter with 2.16 m3 being our rateable weight.
Now let’s calculate the costs:
Sea freight
$25 W/M means the cost is calculated as “$25 per ton or m3, whichever is higher.”
By weight: 25 USD/Ton x 1.80 Ton = 45.00 USD
By volume: 25 USD/m3 x 2.16 m3 = 54.00 USD
So the sea freight cost will be 54.00 USD
To verify what we saw above, we could go directly taking the highest value, which is 2.16 m3, as follows:
Volumetric Weight: 2.16 m3 x 1,000 Kg/m3 = 2,160.00 Kg / 1,000.00 = 2.16 Ton
Rateable Weight: Maximum (Gross Weight; Volumetric Weight) = Maximum (1.80 Ton; 2.16 Ton) = 2.16 Ton Cost = 2.16 Ton rateable weight x 25.00 USD/Ton = 54.00 USD
BAF
Volumetric Weight: 2.16 m3 x 15.00 USD = 32.40 USD
B.L.
BL= 60.00 USD
TOTAL SEA FREIGHT LCL: 146.40 USD
Having this information we can proceed with the calculation:
Number of packages: 2 pallets
Weight per package: 1) 790.00 kg. 2) 1,010.00kg
Measurements per package: 1) 1.00 * 1.20 * 1.50 mt. 2) 1.00*1.20*1.50mt
Volume=
1) 1.00 * 1.20 * 0.80 mt. = 0.96 m3
2) 1.00 * 1.20 * 1.00 mt = 1.20 m3
Total: 2.16 m3 * 1,000.00 kg = 2,160.00 kg / 1,000.00 kg = 2.16 ton
Gross weight: 1,800.00 kg / 1,000.00 kg = 1.80 ton
To obtain the volume weight in LCL cargo the equivalence is 1 m3 = 1 ton, so we can identify that the highest of the gross weight and volume is the latter with 2.16 m3 being our rateable weight.
Now let’s calculate the costs:
Sea freight
$25 W/M means the cost is calculated as “$25 per ton or m3, whichever is higher.”
By weight: 25 USD/Ton x 1.80 Ton = 45.00 USD
By volume: 25 USD/m3 x 2.16 m3 = 54.00 USD
So the sea freight cost will be 54.00 USD
To verify what we saw above, we could go directly taking the highest value, which is 2.16 m3, as follows:
Volumetric Weight: 2.16 m3 x 1,000 Kg/m3 = 2,160.00 Kg / 1,000.00 = 2.16 Ton
Rateable Weight: Maximum (Gross Weight; Volumetric Weight) = Maximum (1.80 Ton; 2.16 Ton) = 2.16 Ton Cost = 2.16 Ton rateable weight x 25.00 USD/Ton = 54.00 USD
BAF
Volumetric Weight: 2.16 m3 x 15.00 USD = 32.40 USD
B.L.
BL= 60.00 USD
TOTAL SEA FREIGHT LCL: 146.40 USD
How to calculate the rateable weight in air transport.
Air Freight Rate
Airfreight: 1.95 usd * kg/vol
FSC (Fuel Surcharge) 0.80 usd * kg/vol
SSC (Security Surcharge): 0.15 usd * kg/vol
AWB: 75.00 USD per AWB
To calculate the total cost of air freight, we must first obtain the volumetric weight to compare it with the gross weight and determine which of the two is the rateable weight.
As with LCL shipping, we must know the number of packages, pallets, pieces, boxes, etc., that will be sent, as well as the weights and measurements of each of them. Other values may also affect the value of the cost of the service (dangerous cargo, refrigerated, urgent, etc.), however for practical purposes we will consider that the cargo is general cargo, it is not refrigerated and not urgent, therefore it is necessary to know this information. :
- Number of packages
- Weight per package
- Measurement per package
Having this information we can proceed with the calculation:
Number of packages: 1 pallet
Weight per package: 183.00 kg
Measurements per package: 1) 1.00 * 1.20 * 0.91 mt.
Volume = 1) 1.00 * 1.20 * 0.91 mt. = 1.92 m3
Total: 1.92 m3 * 167.00 kg = 320.64 kg
Gross weight: 183.00 kg
To obtain the volume weight in air cargo, the equivalence is 1 m3 = 167.00 kg, so we can identify that the highest value of the gross weight and the volume weight is the latter with 320.64 kg, which is rounded to 321.00 kg, this being our weight. chargeable or chargeable weight (CW)
Now let’s calculate the costs:
Airfreight
1.95 usd * 321.00 kg = 625.95 usd
FSC (Fuel Surcharge)
0.80 usd * 321.00 kg = 256.80 usd
SSC (Security Surcharge)
0.15 usd * 321.00 kg = 48.15 usd
AWB
75.00 USD for 1 AWB = 75.00 usd
TOTAL SEA FREIGHT LCL: 1,005.90 USD
Note.
In the case of air export from Mexico to any part of the world, it is necessary to consider a 4% national VAT.
Having this information we can proceed with the calculation:
Number of packages: 1 pallet
Weight per package: 183.00 kg
Measurements per package: 1) 1.00 * 1.20 * 0.91 mt.
Volume = 1) 1.00 * 1.20 * 0.91 mt. = 1.92 m3
Total: 1.92 m3 * 167.00 kg = 320.64 kg
Gross weight: 183.00 kg
To obtain the volume weight in air cargo, the equivalence is 1 m3 = 167.00 kg, so we can identify that the highest value of the gross weight and the volume weight is the latter with 320.64 kg, which is rounded to 321.00 kg, this being our weight. chargeable or chargeable weight (CW)
Now let’s calculate the costs:
Airfreight
1.95 usd * 321.00 kg = 625.95 usd
FSC (Fuel Surcharge)
0.80 usd * 321.00 kg = 256.80 usd
SSC (Security Surcharge)
0.15 usd * 321.00 kg = 48.15 usd
AWB
75.00 USD for 1 AWB = 75.00 usd
TOTAL SEA FREIGHT LCL: 1,005.90 USD
Note.
In the case of air export from Mexico to any part of the world, it is necessary to consider a 4% national VAT.
How to calculate the rateable weight in LTL transportation.
LTL Freight Rate
LTL freight: 0.95 usd * kg
To calculate the total cost of LTL ground freight, like the previous exercises, the first thing we must do is obtain the volumetric weight to compare it with the gross weight and determine which of the two is our rateable weight.
As with Air and LCL shipping, it is necessary to know the number of packages, pallets, pieces, boxes, etc., that will be sent, as well as the weights and measurements of each of them. Other values may also affect the value of the cost of the service, such as whether it is non-stowable cargo, dangerous cargo, urgent cargo, etc. However, for the purposes of our exercise we will consider that it is general cargo, it is not refrigerated and it is not urgent due to Therefore, it will only be necessary to have this information:
- Number of packages
- Weight per package
- Measurement per package
Having this information we can proceed with the calculation:
Number of packages: 1 pallet
Weight per package: 200.00 kg
Measurements per package: 1) 1.00 * 1.20 * 1.00 mt. –
Volume=
1) 1.00 * 1.20 * 1.00 mt. = 1.20 m3
Total: 1.20 m3 * 333.00 kg = 399.60 kg
Gross weight: 200.00 kg
To obtain the volume weight in LTL cargo, the equivalence is 1 m3 = 167.00 kg, so we can identify that the highest value of the gross weight and the volume weight is the latter with 399.60 kg, which rises to 400.00 kg, this being our rateable weight. .
Now let’s calculate the costs:
LTL freight
0.95 usd * 400.00 kg = 380.00 usd
TOTAL LTL GROUND FREIGHT: 380.00 USD
Note.
In the case of LTL land freight made to the Mexican Republic, it is necessary to consider 12 or 16% national VAT, this will depend on the transportation provider used.
Having this information we can proceed with the calculation:
Number of packages: 1 pallet
Weight per package: 200.00 kg
Measurements per package: 1) 1.00 * 1.20 * 1.00 mt. –
Volume=
1) 1.00 * 1.20 * 1.00 mt. = 1.20 m3
Total: 1.20 m3 * 333.00 kg = 399.60 kg
Gross weight: 200.00 kg
To obtain the volume weight in LTL cargo, the equivalence is 1 m3 = 167.00 kg, so we can identify that the highest value of the gross weight and the volume weight is the latter with 399.60 kg, which rises to 400.00 kg, this being our rateable weight. .
Now let’s calculate the costs:
LTL freight
0.95 usd * 400.00 kg = 380.00 usd
TOTAL LTL GROUND FREIGHT: 380.00 USD
Note.
In the case of LTL land freight made to the Mexican Republic, it is necessary to consider 12 or 16% national VAT, this will depend on the transportation provider used.
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