Rates, quotes, and bookings are all related terms that may be used differently across the supply chain. This article defines how we use them within the Chain.io application.
A rate represents the baseline information used to calculate the costs of multiple shipment before you have the details of any particular shipment. The simplest form of a rate would be, "$1000 per 40' container from Shanghai to Los Angeles" or "$3.10 per KG for airfreight from Singapore to Shanghai".
Rates can get a lot more complicated and include multiple rate lines like:
Shanghai to Oakland
- $1000 per container
- $300 BAF
- $84 customs clearance fee
- $25 / house bill origin document fee
- $0.50 / kg destination handling fee
Rates can also have other properties like a validity period (January 7, 2021 - January 21, 2021) and may also apply to all customers or an individual shipper.
A quote is what you get when you combine a rate and the particulars of an individual shipment. Let's say we have 4 forty foot containers in Shanghai that need to go to Los Angeles on or about January 10, 2021.
We can take the simple version of our rate above ($1000 per container) and multiply it by the number of containers and end up with a quote for that shipment of $4,000.
As we use the term at Chain.io a quote is always associated with the particulars of a shipment. It's the output of applying the rate formula to the shipment's details.
A booking is the result of someone deciding to accept a quote. It's like the result or clicking "buy now" on a website. It takes the quote and combines it with additional detail about the shipment and gives the logistics service provider the details they need to arrange for the shipment to actually happen.
There are a lot more steps to shipping beyond these three, but since they're often confused, we hope this helps to clarify. For detailed steps beyond the booking, we recommend reviewing the DCSA Industry Blueprint. While it is specific to ocean freight, the principles are generally transferable.