How to calculate chargeable weight

Por Javier Romeu

Chargeable weight is a term we regularly come across in the various different types of international carriage services we offer as forwarders. Each type of services calculates the chargeable weight in a different way which, in practice, is a nuisance for exporters and importers. This is why we have put together a quick guide to understanding forwarders’ quotes and invoices which talk about chargeable weight, w/v, w/m and other ways of basically saying the same thing.

Basic dimensions of a consignment

Firstly, let’s have a look at the definition of the different dimensions a forwarder may ask us for to give us a quote for a consignment.

• Net weight: the weight of the goods, excluding any packaging such as boxes or pallets etc. Net weight is often abbreviated to NW. It can be expressed in kilogrammes (kg) or tonnes (t), although in English-speaking countries, it may be expressed in pounds (lbs).
• Gross weight: the weight of the goods including all of the packaging. Gross weight is often abbreviated to GW and is expressed in the same units as net weight.
• Volume: the cubic volume of the goods, generally expressed in cubic metres (m3 or cbm). The volume of a rectangular package is easy to work out by multiplying length by width by height.

How to calculate the volumetric weight and the chargeable weight

Apart from full container load consignments, the forwarder generally needs to calculate what we call the volumetric weight and then the chargeable weight. Let’s have a look at what they both are:

Volumetric weight

The volumetric weight is a value in kilos converted from the volume occupied by the goods. It is a measure of the density of the consignment, that is the space (volume) that it occupies in relation to what it weighs. There is a different conversion factor for each mode of transport, and generally speaking the following factors are applied:

Maritime groupage (LCL)

Volumetric weight (Kg) = volume (m3) x 1,000

Air freight

Volumetric weight (Kg) = volume (m3) x 167

Haulage groupage (LTL)

Volumetric weight (Kg) = volume (m3) x 333

These three ‘weight/volume conversion factors’ are also generally expressed respectively as:

1 m3 = 1 t

1 m3 = 167 Kg

1 t = 3 m3

Chargeable weight

Also known as billable weight, the chargeable weight is worked out by taking whichever is the greater of the gross weight and the volumetric weight. The chargeable weight is used a lot in forwarders’ quotes and invoices given that we (or our suppliers) invoice for our break bulk cargo services according to what the cargo weighs and the space it occupies.

It is important to remember that transport prices based on weight are almost always calculated using chargeable weight. Only a few air freight surcharges are still based on gross weight but these are becoming fewer and far between.

We must not forget that as the formula for calculating volumetric weight changes with the mode of transport, when our consignment uses more than one mode of transport, different chargeable weights will have to be calculated to work out the overall cost.

Example: chargeable weight calculation in multi-modal transport

The best way to understand all of this is with an example. Suppose we need to export a consignment by maritime groupage of two x 1m high American pallets each with a net weight of 850 Kg and a gross weight of 860 Kg.

A typical quote might include, among other things, the following items:

Sea freight: 45 USD W/M

BAF: 15 USD W/M

Collection: 0.05 EUR / Kg (*)

Handling: 12 EUR t/m3

Clearance: 65 EUR.

In order to calculate the cost, first we have to calculate the chargeable weight and to do that, we need the volumetric weight and before that the volume. We will start with this last one. An American pallet measures 100 cm x 120 cm at the base. Therefore, the volume of two 1m American pallets is:

Volume = 2 pallets x 1m high x 1m wide x 1.2m long = 2.4 m3

The gross weight is 2 x 860 Kg = 1.72 t

Let’s see how we calculate the cost:

Sea freight

45 USD W/M means the cost is calculated as 45 USD per tonne or m3, whichever is the greater.

By weight: 45 USD/t x 1.72 t = 77.4 USD

By volume: 45 USD/m3 x 2.4 m3 = 108 USD

Therefore, the sea freight cost will be 108 USD.

In fact, it would have been the same if the forwarder had quoted us ‘45 USD per t’ applying the maritime groupage conversion factor because we would have done the following calculation:

Volumetric weight: 2.4 m3 x 1,000 Kg/m3 = 2,400 Kg = 2.4 t > Chargeable weight: Maximum (net weight, volumetric weight) = Maximum (1.72 t, 2.4 t) = 2.4 t

Cost = 2.4 t chargeable weight x 45 USD/t = 108 USD

BAF

The BAF would be calculated in the same way, to obtain a cost of 36 USD.

Collection

Collection is a haulage service where, if we remember, the applicable conversion factor is 333 Kg per m3 or, what is essentially the same, 1 t = 3 m3. Therefore, although the calculation logic is the same, we have to use the correct conversion factor.

Volumetric weight: 2.4 m3 x 333 Kg/m3 = 799 Kg = 0.8 t

Chargeable weight: Maximum (Gross weight, volumetric weight) = Maximum (1.72 t, 0.8 t) = 1.72 t

Cost = 1.72 t chargeable weight x 0.05 EUR/Kg = 86 EUR

Handling

Handling is expressed in t/m3 and so we calculate both values and use whichever is the greater, in this case:

12 EUR x 2.4 m3 = 28.8 EUR

Hence, the total quote is:

(Exchange rate USD – EUR: 0.90)

We have seen how to calculate the chargeable weight for a consignment involving two different modes of transport. We need to remember that if the consignment had involved air freight, the applicable conversion factor would be different again.

We hope this explanation and example of a calculation of chargeable weight for maritime groupage consignments (collected by truck) have been useful. We will leave the comments section open so that you can post any questions you may have.