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One of the most critical questions in the journey of steel spanning thousands of kilometers is: “From where to where, under what conditions, and at what cost will this cargo be transported?” The answer to this question is hidden in freight.
Steel undergoes a long and challenging journey from the moment it is produced until it reaches the customer’s factory. One of the most critical elements of this journey is freight.
Although the term “freight” might sound like merely a transportation fee, it is actually the heartbeat of commerce. It determines numerous details, from which transportation method will be chosen to who assumes responsibility at each stage.
For global steel producers like Hasçelik, freight is not just a logistical necessity; it is a strategic factor that directly impacts customer satisfaction.
Freight is the transportation fee paid to move cargo from one location to another. However, in modern commerce, freight is more than just a cost; it is the “invisible steering wheel” of the supply chain.
The etymology of the word also reflects this journey. “Freight” derives from the Latin word navis (ship) and was used during the Ottoman period to describe shipping costs via maritime routes. In other words, the term has a historically maritime origin.
Over time, as trade routes diversified and road, air, and rail logistics developed, “freight” evolved from a sea-bound concept into the universal language of logistics. Today, freight encompasses everything from a container traveling from Mersin Port to Hamburg to a truck moving from Kocaeli to Bucharest. In short, freight is not limited to a narrow context; it is a common denominator of global trade.
The successful execution of a shipment does not occur merely by sending a vehicle on its way. The real assurance comes from the freight contract.
A freight contract formalizes the responsibilities between the cargo owner and the carrier. It clarifies critical questions such as, “Where does my responsibility end, and where does yours begin?”
A proper freight contract typically includes:
Delivery location
Transit time
Scope of fees
Rights in case of damage, loss, or delay
Consider this scenario: Hasçelik is shipping steel from its Kocaeli factory to Germany. Without a freight contract, if the cargo is damaged at the port, ambiguity may arise regarding “Who is responsible?” On the other hand, a well-prepared contract resolves such potential issues from the start.
Freight charges often encompass more than just transportation costs. Sometimes, they also include:
Port charges
Loading and unloading
Customs procedures
Terminal handling fees
This is where Incoterms rules come into play. In brief, Incoterms are standard delivery terms in international trade that define at which point the seller and buyer assume responsibility and who bears the costs. In other words, questions like “Who pays the freight charges, and at what point does risk transfer?” are largely answered by Incoterms rules.
FOB (Free on Board): Once the cargo is loaded onto the ship, all risk and freight cost transfer to the buyer.
CIF (Cost, Insurance, and Freight): The seller pays both freight and insurance; the buyer only receives the goods.
DAP / DDP (Delivered at Place / Delivered Duty Paid): The seller assumes not only freight but also the customs clearance process.
In practice, if a Hasçelik customer says, “I want minimal involvement in the process,” CIF is preferred. In this case, Hasçelik covers both freight and insurance, and the customer receives the goods directly at their door.
Freight is not just about “keeping costs low.” Critical considerations include:
Timing: Shipments must not be delayed to avoid production line stoppages.
Safety: Proper securing of steel prevents damage.
Transparency: Real-time tracking of cargo provides customer confidence.
Flexibility: Offering alternative routes can be lifesaving in a crisis.
Environmental sensitivity: Green logistics solutions that reduce carbon emissions are increasingly preferred by customers.
Imagine this: a ship waiting at port could delay the cargo by several days. If the carrier can reroute the shipment to an alternative port, it represents a significant advantage for Hasçelik.
Freight charges are determined based on the type of cargo, quantity, distance, and chosen transportation mode. There are standardized calculation methods in international logistics, ensuring transparent cost determination between the carrier and the cargo owner.
Weight or Volume-Based (W/M – Weight or Measure)
Freight is calculated based on either the cargo’s weight or volume—whichever is higher.
Formula: Freight = Transportation rate × (Weight or Volume)
Container-Based (FCL – Full Container Load)
A fixed price is applied for 20-foot or 40-foot containers.
Example: Freight for a 40-foot container may be USD 2,000.
Partial Shipment (LCL – Less than Container Load)
Only a portion of the container is rented. Pricing is based on volume (CBM – cubic meter) or weight.
Example: USD 80 per CBM.
Example Calculation (Sea Freight – LCL):
Cargo: 10 CBM, 3 tons
Freight rate: USD 75/CBM
Calculation: 10 × 75 = USD 750 freight charge
Practical Example (40-foot Container):
Route: Istanbul → Hamburg
40-foot container price: USD 2,300
Port charges: USD 250
Insurance: USD 70
Total Freight Charge = USD 2,620
Every potential risk during transportation highlights the importance of freight insurance. Transporting valuable goods like steel without insurance is a significant gamble.
Types of insurance include:
All Risks: Comprehensive coverage, protecting against nearly all risks.
Total Loss Only: Covers only complete losses.
Additional coverage: Provides protection against extra risks such as pandemics, outbreaks, or natural disasters.
Consider this example: if a steel-loaded container overturns in a storm at sea, an uninsured buyer bears all the losses. In contrast, All Risks insurance secures the value of the cargo. This is why Hasçelik always prioritizes freight insurance.
Freight is not merely a cost item in trade; it is the backbone of safe and sustainable logistics. For Hasçelik, freight preserves the quality of steel from production to delivery and serves as a bridge of trust with customers. Hasçelik manages the journey of steel not only with transportation but also with reliability, transparency, and strategic vision.
