Understand the different types of rates in maritime transport

1. Fret All Kinds - FAK

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FAK, or “All Kinds Freight”, is a standard rate offered by shipping companies to freight forwarders, and ultimately to Shippers. These rates are not associated with no guarantee of equipment and boarding, which means that access to equipment and the loading of containers depend on market conditions.

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While this does not necessarily mean that the containers will not be loaded, there is uncertainty related to equipment availability and boarding capacity. FAK rates are generally valid for a period of fifteen days to one month.

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2. Premium spot rate

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Premium rates are spot rates that guarantee privileged access to equipment. Unlike FAK rates, these premium rates offer additional assurances as to the availability of containers and the loading of goods. These rates offered at higher rates than FAK rates allow shippers to secure the loading of containers in a spot manner.

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3. Nominated Account Contract - NAC

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The NAC is a contract in which the customer is recognized by the shipping company as a privileged customer through the freight forwarder. This status guarantees access to equipment and capacity. NAC contracts are generally longer in duration, ranging from six months to a year or more.

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There are two types of NAC:

• NAC Strict : The customer is directly identified by the company and has reserved capacity on the ships in his name.
• NAC Basket : The freight forwarder has a reserved capacity for a limited range of customers.

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Freight forwarders generally only offer these allowances to their regular customers. Access to these contracts usually requires, on the part of the Chargeurs, a commitment to a minimum volume.

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Some contracts include “dead freight” clauses, i.e. penalties if a minimum volume is not provided by the Shipper.

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4. Beneficial Cargo Owner - BCO

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The BCO, or “Beneficial Cargo Owner”, is reserved for the largest shippers who contract directly with shipping companies. This type of contract offers the best possible equipment and boarding guarantees. BCOs benefit from long-term contracts, often annual or even multi-year, thus offering great stability.

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Companies like Maison du Monde and Ikea use this type of contract to secure their supply chains.

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Conclusion

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The choice between FAK, premium rate, allocations/NAC and BCO depends on the frequency and volume of Shippers' shipments as well as on their strategic choices.

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Freight forwarders play a crucial role in negotiating and offering these different options to their customers, thus making it possible to meet Shippers' diverse requirements.

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