Sea Freight and How It Is Calculated
Pricing sea freight by cargo type, with worked W/M, TCE and Worldscale examples, the ETS surcharge, Turkish law and the main market indices.
Freight is the price paid to a carrier for moving cargo by sea. How it is worked out depends on the trade: containers are priced per box with surcharges on top, breakbulk on weight or measurement, whichever yields more, dry bulk per tonne or as a daily hire, and tankers usually as a percentage of the Worldscale rate. Under Turkish law the contract for carriage of goods by sea is defined in Article 1138 of the Commercial Code No. 6102.[1]
Units Used to Price Sea Freight
A ship sells two kinds of capacity, deadweight and cubic space. Dense cargo brings the vessel down to its load line with empty space left in the holds, whereas light cargo fills the holds well before the weight limit is reached.[2] Each pricing unit is a way of charging for whichever capacity the cargo uses up.
| Cargo | Pricing unit | Usual contract | Reference |
|---|---|---|---|
| Containers | Per box or TEU | Liner bill of lading, annual contract | Drewry WCI, SCFI, FBX |
| Breakbulk | Tonne or cubic metre (W/M) | Liner bill of lading, voyage charter | Quoted by trade and parcel |
| Dry bulk | Per tonne or daily hire | Voyage charter, time charter | Baltic Exchange indices |
| Tankers | Worldscale, per tonne or lump sum | Voyage charter, time charter | BDTI, BCTI |
Container Freight and Surcharges
The standard unit is the TEU, a twenty-foot equivalent with an internal volume of about 33 cubic metres, and a forty-foot box counts as two. A quotation normally combines basic ocean freight with a list of additions: a bunker adjustment (BAF), terminal handling at both ends (THC), peak season charges and, on European trades, an emissions surcharge. Two quotes can only be compared once they cover the same items.
The emissions surcharge follows from shipping's entry into the EU Emissions Trading System in 2024. Companies must surrender allowances for 40% of their 2024 emissions and 70% of 2025 emissions, rising to all in-scope emissions from 2026.[3] Scope follows the route: all emissions between two EU or EEA ports, half on voyages to or from a port outside that area, and all emissions at berth.[3] Carriers pass the cost on in different ways, so surcharges on the same trade can differ noticeably.[4]
Weight or Measure for Breakbulk
Breakbulk freight is commonly charged on a W/M basis. One tonne is treated as equal to one cubic metre, and the carrier charges on the larger of the two figures, so it earns the same whether a parcel is heavy or bulky.[2]
Take an assumed rate of USD 60 per W/M. A consignment of machinery weighing 12 tonnes and measuring 30 cubic metres pays on 30 units, giving USD 1,800. Steel plate weighing 25 tonnes and measuring 10 cubic metres pays on 25 units, giving USD 1,500. The volume a tonne of cargo occupies is its stowage factor, and irregular shapes also lose space to broken stowage. The breakbulk guide treats both in more depth.
Dry Bulk and Charter Pricing
Dry bulk has two basic forms of contract. Under a voyage charter the owner carries a cargo between named ports for a rate per tonne or a lump sum and pays for fuel and port costs. Under a time charter the charterer hires the ship for a period at a daily rate and pays for fuel and port costs itself.
To compare the two, the voyage rate is converted into a time charter equivalent (TCE): freight minus voyage costs, divided by the days the voyage takes. The figures below are all assumptions.
| Item | Assumption | USD |
|---|---|---|
| Freight revenue | 60,000 t at USD 20/t | 1,200,000 |
| Bunker cost | 1,000 t at USD 500/t | 500,000 |
| Port and canal costs | Total | 200,000 |
| Net voyage revenue | 500,000 | |
| TCE | 40-day voyage | 12,500 per day |
The same numbers show how fuel feeds into freight. A USD 100 rise in the bunker price adds USD 100,000 of cost, so the rate would have to rise by about USD 1.70 per tonne for the owner to keep the same daily earnings. Time charter earnings leave fuel out of the sum, which is why the Baltic Dry Index is built on them.
Tanker Freight and Worldscale
Tanker rates are generally quoted against Worldscale, a system that grew out of work by London tanker brokers in 1952.[5] The Worldscale associations publish, route by route, a base rate in dollars per tonne worked out from a round voyage by a standard tanker. WS 100 is that rate and WS 150 is 150% of it.[5]
Suppose the base rate on a route is USD 10 per tonne and a fixture is agreed at WS 150. Freight is then USD 15 per tonne, or USD 1.2 million on an 80,000-tonne cargo. These figures are illustrative. Since base rates are reset each year, WS points from different years are not directly comparable.
What Moves Freight Rates
The balance between ship supply and cargo demand does most of the work. New tonnage takes years to arrive, so supply barely moves in the short term and small shifts in demand produce large rate swings. Distance acts on supply as well. Ships diverted from the Red Sea around the Cape of Good Hope take longer over the same cargo, reducing effective capacity, and UNCTAD identifies this rerouting as the main reason for the jump in ton-miles in 2024.[6]
Fuel is among the largest voyage costs and also decides the speed at which a ship sails. Berth queues, handling rates and time at anchor consume ship days and bunkers alike. Canal tolls, insurance and regional war-risk premiums add to the bill. Cargo value sets a ceiling of its own, because a low-value bulk commodity can bear far less freight than high-value goods in a box.
Legal Framework in Türkiye
The Turkish Commercial Code recognises two types of contract: voyage charter, where all or part of a ship or a specific space is allocated, and contracts for individual goods, known in Turkish as kırkambar. No particular form is required, although a party to a voyage charter may ask for a charter party to be drawn up.[1]
Laytime is the period allowed for loading and discharging, and demurrage is the money due when it runs out. Articles 1152 to 1157 cover notice of readiness, laytime and demurrage. As reported in the legal commentary, where freight has not been agreed the customary rate at the time and place of loading applies (Art. 1195), and claims for freight and demurrage are subject to a one-year limitation period (Art. 1246).[1]
Dead freight is what the charterer pays for space left empty when it ships less than the agreed quantity. Payment responsibility also connects to Incoterms in the sale contract: under FOB the buyer fixes the ship, under CFR and CIF the seller does. On the bill of lading, "freight prepaid" indicates payment at the loading end and "freight collect" at destination.
Freight Indices
An index shows the direction of the market and cannot stand in for the price of a given parcel. The Baltic Exchange's BDI family covers dry bulk, BDTI and BCTI cover tankers, while Drewry's WCI, the Shanghai SCFI and Freightos FBX are the usual references for containers. Actual contract prices reflect volume, duration, route and the surcharges included. The role of fuel purchasing in voyage costs is covered on the bunker trading page.
Frequently asked questions
What is freight?
Freight is the price paid to a carrier for moving cargo by sea. How it is worked out depends on the trade: containers are priced per box with surcharges on top, breakbulk on weight or measurement, whichever yields more, dry bulk per tonne or as a daily hire, and tankers usually as a percentage of the Worldscale rate.
How is freight different from storage charges?
Freight pays for carriage. Storage is charged when cargo stays in a warehouse or port beyond the free period.
Are demurrage and detention the same?
No. For containers, demurrage applies when a box stays in the terminal beyond free time and detention when it stays out of the terminal too long. Under a charter, demurrage is paid for exceeding laytime.
Who pays the freight?
That depends on the contracts. The Incoterms rule governs the sale side, and the bill of lading or charter party governs the carriage side.
Sources
- Kulaçoğlu Law Office. Navlun Sözleşmesi, summary of Turkish Commercial Code No. 6102, Art. 1138 onward.
- Handybulk. Cargo Stowage and Handling in Shipping: Stowage Factors, Bulk Cargo, Cargo Gear.
- UK P&I Club. EU ETS and Shipping from 1 January 2026; Siglar Carbon. EU Emissions Trading System.
- Seatrade Maritime. Container Shippers Confused by Carrier EU ETS Surcharge Variation.
- Wikipedia. Worldscale.
- UNCTAD. Review of Maritime Transport 2025, Chapter 1.
