Difference between Commodity and Cargo

Aren’t they the same, you may ask..?? The short answer is NO.. There is a difference between Commodity and Cargo..

Commodity maybe defined as a raw material or product that is traded, such as ores, grain, coffee etc..

Commodity becomes Cargo when it enters the transportation realm.. Cargo is what is transported..

There are several terms associated with Commodity and Cargo..

You may have heard the term “Commodity Trading”, never “Cargo Trading”.. Commodity is what is being bought and sold.. How and when commodity becomes cargo will be decided after the trade..

Trading is done mainly using International Commercial terms otherwise known as Incoterms®..

image for wheat comcargo

Wheat – Commodity and Cargo

Chrome Ore - Commodity and Cargo

Chrome Ore – Commodity and Cargo

You may have also heard the term “Cargo Operation or Handling”, never “Commodity Operation or Handling”.. This is because cargo is what is being transported and handled on board the ships, in port and on the roads.. As long as a “commodity” is being transported, it is referred to as “cargo”..

You may have also heard the terms “Commodity Brokers”, “Commodity Traders”, and “Cargo Brokers”.. Commodity brokers connect sellers and buyers for any specific commodity and Cargo Brokers connect “Commodity Traders” who trade in commodities and Ship owners for the carriage of the commodities..

Something to ponder about.. 🙂

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