What the “FAK”

What the “FAK”?

International trade is easy. If there’s a buyer, a seller, and a forwarder to ship the actual products, we got all covered, right? It is a big no-no.

If international trade sounds simple to you, you are probably not a part of the ecosystem.

Buying/selling and transporting products from point A to B is a business for professionals. It is super important to understand the difference between pricing methods to understand what the best practice is,

And in which cases we can take advantage of the different terms.

Today we will dive into a familiar term to those involved in maritime trade, even though everyone involved in international trade must know and understand—”FAK” commodity rates.

So you have a super cool product, and sales are great! It’s time to start selling internationally. The moment is here. You just closed the deal, and thousand of your products will be shipped to Asia, got a buyer who is thrilled to import and distribute your product all over Asia… More than 2000 TEU (equals 1000 20ft containers)  You need to ship the goods. So you know a few forwarders that a friend recommended, and you start to negotiate freight prices. STOP. Now it’s time to read this article.

Ocean freight quotation comes in a few different ways, and it’s up to you to choose the right option – choosing the right options can save you thousand of dollars, delays, and unhappy customers.

1. Freight tender / RFQ (from few forwarders)
2. Open rates
3. Spot rates
4. Contract rate
5. Named account
6. FAK rates

Probably – your freight service providers will send you rates based on their “FAK” tariff. FAK stands for Freight All Kinds, a pricing model in which the freight rate charged is the same for all types of goods (for all ).