STRUCTURE OF LINER FREIGHT RATES

The article concentrates on stowage factors and the unit value of the commodities as the major determinants of liner freight rates. On the basis of a comparative route study, the author concludes that demand factors, especially unit value, are important in the fixing of liner rates. Comments are also made on the usual practice of applying rates on the basis of the revenue ton. It is argued that this policy does not reflect the opportunity cost of commodities carried and it tends to overstate the actual tonnage carried.