Freight is a commercial as well as a technical aspect of International Transaction and Transportation.

Commercially it can be paid at Both the end. Means Either at the loading Station of cargo or at the Discharge Station of Cargo Station.

AIR FREIGHT SEA FREIGHT ROAD AND RAIL FREIGHT

Sea Freight :- Normally this type of freight is paid in USD ($).

Air Freight :- Normally this type of freight is paid in Local Currency.

Road and Rail Freight :- This kind of Freight is also paid in Local Currency.

If a passenger travels then it is called fare not freight.

If a cargo is transported then it is called freight not fare.

Normally freight terminology is related to international transportation from one port to another port or from one place to another place

Demand and Supply :-Freight from China to India is approx 800-900 USD and Freight from India to China is approx 200 USD.

Inventory :-Higher the Inventory, Lower the freight and Vice Versa.

Circumstantial :- This kind of parameter relates to Seasonal or Time Bound charges means PSS i.e. (PICK SEASON SURCHARGE) for Sea transport, ECDS i.e.(EXPRESS CARGO DELIVERY SURCHARGE) which is mainly meant for Air transport

Situational :- In this case, one of the classic example is Gulf War, due to this, it adds few components like War Risk charges, Security Surcharge

Geographical :- Freight over here depends upon distance between two destinations, the route chosen, the weather conditions etc. because of the geographical locations

Because of all these above mentioned parameters, freight is volatile in nature.

Freight is expressed documentarily by various documents and it depends upon Mode of Transport

1.Road Transport :- The Document is known as Lorry Receipt (L.R Copy)

o Here, it can be Prepaid or Collect.o It is applicable for Import as well as Export.

2. Rail Transport :- This document used in Rail Transport is known as Rail Receipt(R.R)

o Over here, the freight can be prepaid or collect

o It also applicable for Import as well as Export.

3. Air Transport :- Document used is Airway Bill i.e.(AWB)

o Over here, the freight can be prepaid or collect

o It also applicable for Import as well as Export.

4. Sea Transport :- Document used is Bill of Lading i.e.(B/L)

o Over here, the freight can be prepaid or collect

o It also applicable for Import as well as Export.

The custom valuation of an international cargo is as per the assessable value.

Assessable value comprises cost of cargo, insurance, freight and loading/Unloading charges.

This automatically explain the significance of “Freight”

Higher the Freight Higher the Custom Duty. Custom Valuation is only possible on the

ground of Freight Certificate

Freight Certificate includes freight amount and Freight Tariff issued by concerned agent/carrier.

If it is not “Freight Certificate” then Custom has the power to charge the duty,

20% of total cargo shipment + 1.125% of Insurance value.

Freight has technical importance as per the Inco-Terms.

As per the Inco-Terms, Freight can be paid by below categories.

GROUP E: EXW Ex works :– Seller has minimum obligations and the buyer has maximum responsibility.

GROUP F: FCA Free Carrier :- Irrespective of place, seller has obligation to load the cargo and not to unload the cargo

FAS Free alongside Ship :- Seller has obligation upto the cargo get’s load on board, then all the risk and responsibilty lies to consignee