The freight rate has two major components-basic ocean freight and

surcharges—and is commonly quoted and settled in U.S. dollars. Basic ocean

freight is charged by liners for each pricing unit (such as 1 FEU or TEU) of cargo

shipped under the CY/CY term. Surcharges are the additional fees charged

by liners according to the specific terms of carriage, fuel prices, peak or offpeak seasons, industry practices, etc. Examples include bunker fuel surcharge,

currency surcharge, peak season surcharge, war risk surcharge, congestion

surcharge, canal surcharge, International Security Port Surcharge, and inland

transshipment charges. In addition to the regular freight, international container

shippers also need to bear a list of expenses quoted in their local currencies,

such as terminal handling charges, documentation charges, telex release

charges, customs declaration charges, container loading charges, and trucking

charges.

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