Definition: Freight all kind (FAK) is a consolidated cargo that contains different kinds of goods but it is charged at one unique rate. In other words, a group of goods are pooled together for shipping purposes with no regard of their class.
What Does Freight All Kind Mean?
In shipping and customs, the Harmonized System (HS) identifies different kinds of products and classifies them properly for them to be identified when a cargo is being sent. This helps custom agents to charge different rates for different goods. On the other hand, there are also different international commercial terms, also known as INCOTERMS, that define trade conditions.
Freight All Kind (FAK) is one of those INCOTERMS and it is employed when different types of products are assembled in one single cargo to be shipped together and labeled as FAK. By doing this, an import-export transaction can be assigned with a single tariff, as it is considered a consolidated cargo. This is a common INCOTERM employed by freight forwarding companies that act as a carrier for multiple different sources and recipients, normally for small size shipments. By consolidating everything in a single cargo it allows them to provide a standard rate for the shipment and facilitate customs procedures.
Example
A company called Laser Shipping LLC. is based on Miami, Florida. The company’s business is to consolidate small shipments that customers send to its warehouse from their online purchases. Laser Shipping’s main service is to forward those shipments to different places in South America like Ecuador, Peru and Panama. They charge cheaper rates than regular carriers and they take care of all customs procedures.
Internally, what the company does is to consolidate everything in one single cargo for each of the countries they serve and then the shipment is classified as Freight All Kind (FAK). This way customs agents charge them a standard tariff for the whole cargo’s value and customers get what they bought worry-free.
