A minimum bill of lading---minimum billing or minimum charge---is often required in a freight service.
In ocean freight, a minimum of usually 2 or 3 CBM (cubic meters) is required. The freight consolidator may specify the minimum requirement in a dollar amount, instead in CBM.
In air freight, a minimum of usually 1 kilogram is required. If a consignment is light and small, it is more economical to ship by air rather than by sea considering the benefits of air freight.
In road and rail freight, the minimum requirements vary widely among carriers.
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Case Sample:
Weight or Measure
Assuming that an ocean carrier or a freight consolidator offers an exporter US$65 W/M for the shipment of 665 cartons of product DX.
The gross weight of each carton is 10.5 kgs. and its length-width-height is 1.5' x 1' x 1', which is 1.5 cu. ft. or 0.04248 CBM per carton.
The specified weight is per 1,000 kgs.
and measure is per cubic meter.
The consignment has
a weight of 6,982.5 kgs. (i.e., 10.5 kgs. x 665)
and a measure of 997.5 cu. ft. (i.e., 1.5 cu. ft. x 665) or 28.25 CBM (i.e., 0.04248 CBM x 665).
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Freight Cost Calculation |
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The freight cost by weight is: |
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US$65 x (6,982.5 1,000) |
= |
US$ 453.86 |
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The freight cost by measure is: |
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US$65 x 28.25 |
= |
US$ 1,836.25 |
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The measure of product DX is large in relation to its weight, that is, the freight cost by measure gives the carrier or the consolidator a higher revenue, thus the exporter pays US$1,836.25.
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