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Word Count: 1,313
An amazing assortment of goods are moved over the worlds ocean trade routes Of necessity the carriers charge for the service they render These charges vary almost as widely as do the cargoes for they mirror both the shipowners costs and the special conditions prevailing on the trade routes traversed by the shipsOcean freight rates may be described as the prices charged for the services of water carriers Each ship operator develops its own rates usually without consultation with the shippers The charges reflect the cost of providing the carriage the value of this service to the owner of the goods the ability of the merchandise to support the expense of transportation and economic conditions in generalFreight rates truly reflect the working of the laws of supply and demand In tramp shipping particularly it is possible to observe how these factors influence the rise or fall of freight rates from day to day and from cargo to cargo Tramp ships transport in shipload or full cargo lots commodities which like coal grain ore and phosphate rock can be moved in bulk The fact that usually only one shipper and one commodity are involved simplifies the establishment of a freight rate for this particular movement To the capital charges of ownership and the expense of administration and overhead must be added the cost of running the ship handling the cargo and paying port fees and harbor dues Against this total is set the number of tons to be hauled and the resultant figure is what the tramp must charge per ton of cargo loaded to break even on the contemplated voyage If competitive conditions permit a margin for profit will form part of the quoted rate If however the prevailing economic climate is unfavorable the owner has the privilege of retiring the ship to a quit backwater there to wait until the financial skies are brighter The tramp operator does not depend upon the longterm goodwill
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