How to Calculate Sea Freight Rates (LCL)
Calculating sea freight rates, specifically for Less than Container Load (LCL) shipments, requires understanding the concept of "Revenue Tons" or "W/M" (Weight or Measure). Unlike standard parcel delivery services that charge primarily by simple dead weight, international sea freight charges based on shipping density.
What is W/M (Weight/Measure)?
Carriers look at your cargo in two ways: how much space it takes up (Volume) and how heavy it is (Weight). They will charge you based on whichever number is higher. This is to ensure that a container full of feathers (high volume, low weight) generates enough revenue compared to a container full of steel (low volume, high weight).
The standard conversion factor for LCL Sea Freight is:
- 1 Cubic Meter (CBM) = 1,000 Kilograms (1 Metric Ton)
The Calculation Formula
To determine your freight cost manually, follow these steps:
- Calculate Total Volume (CBM): Multiply Length × Width × Height (in meters) for all packages.
- Calculate Total Weight (Tons): Divide the total Gross Weight (in kg) by 1,000.
- Compare: The higher of the two numbers is your Billable Volume (Revenue Ton).
- Calculate Cost: Multiply the Revenue Ton by the Carrier's Freight Rate per W/M.
Example Calculation
Imagine you are shipping 2 pallets. Each pallet is 120cm x 100cm x 100cm and weighs 1,500 kg.
- Volume Calculation: 1.2m x 1.0m x 1.0m = 1.2 CBM per pallet. Total = 2.4 CBM.
- Weight Calculation: 1,500 kg = 1.5 Tons per pallet. Total = 3.0 Tons.
- Comparison: 3.0 Tons is greater than 2.4 CBM.
- Result: You will be charged for 3.0 Revenue Tons.
- If the rate is $50 per W/M, the cost is 3.0 × $50 = $150.00.
Why do my dimensions matter?
Even if your goods are light, poor packaging can increase your costs significantly. If you stack items inefficiently, you increase the CBM (Cubic Meters), which might cause the Volume charge to exceed the Weight charge. Always optimize your pallet stacking to minimize dead space.