What is "freight rate"

n. the charge for transporting something by common carrier; "we pay the freight"; "the freight rate is usually cheaper" [syn: freight, freightage]

A freight rate (historically and in ship chartering simply freight) is a price at which a certain cargo is delivered from one point to another. The price depends on the form of the cargo, the mode of transport ( truck, ship, train, aircraft), the weight of the cargo, and the distance to the delivery destination. Many shipping services, especially air carriers, use dimensional weight for calculating the price, which takes into account both weight and volume of the cargo.

For example, bulk coal long-distance rates in America are approximately 1 cent/ton-mile. So a 100 car train, each carrying 100 tons, over a distance of 1000 miles, would cost $100,000. On the other hand, Intermodal container shipping rates depend heavily on the route taken over the weight of the cargo, just as long as the container weight does not exceed the maximum lading capacity. Prices can vary between $400-$10,000 per Twenty foot equivalent unit (TEU) depending on the supply and demand of a given route.

In ship chartering, freight is the price which a charterer pays a shipowner for the use of a ship in a voyage charter.