Freight Rates and Surcharges Flashcards
6 cards from real Ocean Sea Freight practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 6 Freight Rates and Surcharges flashcards as text
What is the 'Federal Maritime Commission' (FMC) and its role in US ocean freight?
Answer: The US government agency that regulates international ocean shipping to and from US ports
The FMC regulates common carriers, NVOCCs, ocean freight forwarders, and marine terminal operators serving US foreign trade, enforcing the Shipping Act and investigating unfair practices.
What is 'slow steaming' and how does it affect ocean freight rates?
Answer: Reducing vessel speed to save fuel — it lowers carrier costs but increases transit times and can require more vessel capacity to maintain schedules
Slow steaming reduces fuel consumption significantly (fuel burns roughly with the cube of vessel speed), helping carriers control costs, but means longer transit times, requiring more vessels to cover the same schedule frequency.
What is 'rolling' in ocean freight booking?
Answer: When a carrier moves a confirmed booking to the next sailing due to vessel overbooking or space constraints
Rolling (or being 'rolled') occurs when the carrier cannot accommodate confirmed cargo on the scheduled vessel and moves the booking to the next available sailing — causing delays and potential demurrage at origin.
What is a 'Dead Freight' charge in ocean freight?
Answer: A charge levied when a shipper books container space but fails to use all or part of it
Dead Freight is a compensation charge the shipper owes the carrier for unused space on a vessel that was contractually reserved — it compensates the carrier for lost revenue from the unfilled space.
What does 'FAK' (Freight All Kinds) rate mean in ocean freight?
Answer: A single uniform freight rate applied regardless of the type of commodity being shipped
FAK rates simplify pricing by charging the same rate for any commodity — rather than maintaining complex commodity-specific tariff schedules, carriers quote one rate that covers all types of cargo.
What is a 'Named Account Rate' (NAR) in ocean freight?
Answer: A confidential rate negotiated specifically for a high-volume shipper, lower than published tariff rates
A NAR (or account-specific rate) is a private, negotiated rate offered by a carrier to a specific shipper based on their volume, loyalty, or strategic value — typically more favorable than spot or standard tariff rates.