Page 264 - DCAP312_WEB_TECHNOLOGIES_II

Web Technologies-II

Notes Step 2: Calculate the freight with the greater amount either the mass or the dimension.
5 × INR 110.00 = INR 550.00
Freight would be paid on the measurement and not the weight. All shipping lines carrying cargo
in a break-bulk form insist on payment based on a minimum freight charge which is equivalent
to one freight ton, one cubic metre or one metric ton.
Full Container Load Calculations and Surcharges

Freight rates for containers are based on the container as a unit of freight irrespective of the
commodity or commodities loaded therein, (FAK) Freight All Kinds. The shipping lines quote per
box (container) either a six or twelve metre container. From time to time, abnormal or exceptional
costs arise in respect of which no provision has been made in the tariffs. For example a shipping
line cannot predict the movement of the US Dollar or the sudden increase of the international
oil price. These increases have to be taken into account by the shipping line in order to ensure
that the shipping line continues to operate at a profit. These increases are called surcharges.
All shipping lines accordingly retain the right to impose an adjustment factor upon their rates
taking into account these fluctuations. All surcharges are expressed as a percentage of the basic
freight rate. Surcharges are regularly reviewed in the light of unforeseen circumstances, which
may arise and bring cause for a surcharge increase.

Bunker Adjustment Factor (BAF)
“Bunkers” is the generic name given to fuels and lubricants that provide energy to power ships.
The cost of bunker oil fluctuates continually and with comparatively little warning.
Freight rate: Port Elizabeth to Singapore
Freight rate: INR: 1 250.00 per 6-M container
+ BAF 5.2%
INR 1 250.00 × 5.2% = INR 65.00
Add the two amounts together
Freight rate: INR 1 315.00
Currency Adjustment Factor (CAF)

The currency adjustment factor is a mechanism for taking into account fluctuations in exchange
rates, these fluctuations occur when expenses are paid in one currency and monies earned in
another by a shipping company. The currency adjustment factor is a mechanism for taking into
account these exchange rate fluctuations. It is always expressed as a percentage of the basic
freight and is subject to regular review.

Self Assessment Questions
1. ................... is commonly depleted for shipments from a variety of sources.
(a) Warehouse management system

(b) Telecommunication network
(c) E-Commerce inventory
(d) None of these

2. Shopping cart software and warehouses primarily communicate through methods:
(a) Batch Processing by Manual Import/Export
(b) Handling larger order volumes

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