Factors effecting freight rates-
If your business utilizes freight shipping, you will know how surprisingly complicated it is to get an accurate cost. So many factors go into the overall price of your shipment haul. Understanding the factors that impact your freight cost is the best way to know if you’re getting the best deal out of your operations. Learning about the elements allows you to make cost-effective changes to your shipping strategy.
FACTORS THAT AFFECT FREIGHT SHIPPING COSTS:
Your Freight Method
When deciding which freight service is best suitable for your business, it’s important to understand that whichever method you choose the cost of your service. The four common types of shipments are:
Air freight
Rail freight
Land freight
Sea freight
Each freight method has advantages and disadvantages, but you should choose one based on your priorities and expectations. Air and sea freight transportation are the two most common transport methods.
While air transportation offers an expedited solution, it has a higher price tag. On the other hand, sea transport is perfect for those transporting bulky and heavy cargo but will take longer to reach its destination.
The Freight’s Class
Your freight class is the standard shipping industry pricing measurement and classification. Created by the National Motor Freight Traffic Associates, it helps provide a common ground for all LTL shipping businesses and carriers. This system makes logistics and negotiations more productive and smoother.
These four elements determine freight class:
Ease of handling
Density
Liability
Stow ability
Freight Density
One of the most important factors influencing freight shipping costs is your freight’s density. The density is the weight of the space your shipment occupies. This measurement will help determine your shipment’s type and overall pricing. Knowing your freight’s density will greatly affect your shipping operation.
Weight and Dimensions
The carrier will factor the dimensions and weight of your shipment into the overall pricing. You’re typically charged per mile or hundred pounds if you’re shipping your items in a trailer or truck. However, if your shipment is LTL, your shipment’s weight and dimension greatly influence the cost.
Fuel Costs
Similar to other markets, fuel costs can influence the pricing of your freight shipping expenses. When fuel costs increase, shipping rates will increase, and vice versa because fuel is the major source of our transportation. Our trains, plane, trucks, and cargo ships need fuel to transport your goods from one place to the next.
For those who ship domestically, it’s important to know that shipping items state-to-state can also influence your shipping costs. State fuel rates vary based on state and local tax laws. So, it’s important that you estimate these surcharges to factor them into your budget.
Accessorial Fees
If your shipment requires special instructions for drivers, as is the case with residential deliveries, redelivery requests, or private gate entries, those costs will also factor into your shipping fees. Ideally, commercial shipping is best suited to dock-to-dock shipping.
This makes it easier for our transporters, and any deviation can be inconvenient. Issues that arise could result in an accessorial charge on your final bill. Make sure to discuss with your 3PL or carrier service what they consider assessorial.
The Shipping Mode
The shipping mode refers to how much freight your are shipping and how fast you need your shipment delivered to its destination. You can choose expedited shipping if you need something shipped immediately. However, if you’re more flexible, you can select a deferred option.
Your freight shipping rates can also vary depending on how the freight ships. There are four types of modes:
Full truckload (FTL): You require the entire space your hauler provides.
Less than truckload (LTL): Your shipment doesn’t fill the entire trailer. The carrier may add multiple loads into the trailer, but your shipment may require extra handling.
Partial truckload (PTL): It doesn’t fill the entire trailer. Carriers can maximize their space; the load stays on because the items have a common destination.
Intermodal: This mode combines multiple shipping methods.
Supply Chain Demand
Unfortunately, supply chain changes and demand increases also impact the freight shipping industry. If your transport method has limited space, the carrier may increase its pricing to premium rates. However, if shipping is slow, you could see a dip in pricing. The number of carriers and 3PL businesses in your area can also influence your shipping cost.
Your Shipment’s Destination
As stated before, if your shipment poses any sort of inconvenience or requires special instruction, you could see additional charges. This aspect of the process also applies to your shipment’s destination. The harder it is to deliver your cargo, the more your freight shipping will cost. If you need your shipment delivered to the following location examples, you may see extra fees:
Schools
Churches
Storage units
Establishments with extra security
Carnivals
The Distance Your Freight Travels
The further your freight goes, the higher the cost. Whether you’re shipping your items internationally, regionally, or across the country, the mileage will influence your pricing. The fuel and labor required to get your shipment to its destination are things the company will account for and factor into the expense. However, it’s important to still shop around and compare quotes to get the best deal.
