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How does it impact on unit price of cargo, if in case freight rate is double?

What will happen, container freight is doubled (for a route from China to USA or Middle east)2-Impact on vessel charter rates Regards, Fawad Buzyb Shipping agencies

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Question added by Ahmed Fawad Khan , Logistics Consultant , Free Lancer
Date Posted: 2013/08/02
zohair Siddiqui
by zohair Siddiqui , Warehouse Associate , Numerous Warehouses

If the freight rate is double, the overall product unit price increased from standard unit to prorated to shipment cost. It's important to perform Activity Based Costing or unit price breakeven analysis before any further buying or selling practices because the unit price will go according to the new transportation rates.

Shahan Arshad
by Shahan Arshad , Senior Analyst , Pakistan Business Council

In the spreadsheet calculations, where you have divided freight rate by total quantity of cargo to get cost of freight included in per unit of cargo, simply double the freight rate and see how that affects per unit price.
For example (based on a similar previous project of mine): freight rate was2500 USD.
Added rest of the charges including trucking, bunkering, THC, handling, customs, genset, warehousing and other costs and divided the sum by total quantity of cargo to get freight cost per kilo.
Freight cost per kilo was0.52 USD.
I added that together with the purchase price per unit of the cargo, tax per unit cargo and the final cost of the cargo per unit (inclusive of other costs). 
  If I double the freight rate from2500 USD to5000 USD, my spreadsheet shows that freight cost per unit would be0.81 USD per kilo of cargo.
This is an increase of0.29 USD from the original.
When I add that to purchase price of cargo per unit and taxes etc, the final cost per unit cargo shows an similar increase.
All in all, the freight cost per unit of cargo and the final cost per unit of cargo depend on the quantity of the cargo since that is the denominator in the equation.
  N.B.
If cargo is being shipped to the Middle East or USA from China.
do not forget to convert all of your costs into the relevant currencies in your spreadsheet calculations.

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