Freight rate

The freight rate is the cost of shipping a commodity by sea, quoted per tonne or as a day rate for chartering a vessel.

The freight rate is what it costs to move a commodity by sea, quoted either as a rate per tonne for a specific route or as a day rate for chartering an entire vessel, depending on how the shipment is arranged. It responds to the balance between how much cargo needs moving and how many ships are available to move it.

Freight rates are the main reason a FOB price at the loading port and a CIF price at the destination port differ for the same cargo. When shipping is scarce relative to cargo, rates rise and that gap widens; when there are more ships than cargo, rates fall and the gap narrows. The Baltic Dry Index tracks freight rates for dry bulk cargoes specifically, while tanker rates for oil are tracked separately. See FOB, CIF and Incoterms.