Ad Valorem Freight
Definition
Ad valorem freight refers to a type of shipping charge that is calculated based on the value of the goods being transported. It is a percentage of the goods' declared value and is added to the overall transportation cost. Ad valorem freight is commonly used in international trade to ensure that higher-value goods bear a proportionate share of the shipping costs. By applying this freight rate, carriers can account for the increased risk and responsibility associated with transporting valuable cargo.
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