Freight rates or freight shipping rates refer to the cost of delivering items from one location (pick up point) to another (delivery destination). It’s a basic definition, but its simplicity ends there. Before a carrier can come up with their freight rates, they have to consider the following first: manpower cost, fuel cost, vehicle maintenance cost, insurance cost, regulatory compliance cost, other operational costs, and their revenue targets. Factoring all these considerations in, they’ll be able to derive their freight rates based on the following:
Type of Freight
The type of goods being shipped will directly affect the cost because this will dictate what kind of truck will be used. Typically, shipping of perishable items will cost more than shipping ordinary items like clothes, shoes, and other non-food items. The reason is simple: perishable items will require the use of a refrigerated truck which is more expensive than a regular truck.
Basically, the farther the destination, the higher the cost. Add to that the fact that some shippers only provide service at specific locations. So if your delivery destination is not part of their service coverage, your shipment will have to be transferred to another carrier before reaching its ultimate destination. And that will mean additional cost for you.
For goods that need to transported over long distances, shipping by rail is usually the most advisable, especially when there’s no time-sensitivity factor, meaning, there’s no rush to have the shipment delivered. But the cost will not end there since the shipment will likely be loaded on a truck before it gets to its final delivery stop. Again, that means extra cost for you.
Density, Size and Weight
Most shipping rates are computed based on the weight and density of the shipment. In other words, the heavier and larger the shipment, the more expensive it is to ship.
Required Delivery Time
The faster you need your shipment to be delivered, the more you should expect to pay for it.
Supply and Demand
Some regions in the U.S. experience seasonal demands that result in seasonal rate spikes. For example, it’s peak harvest season for oranges in Florida. During this period when there’s a big truck demand to ship those produce to different destinations, freight rates are bound to increase. When it’s back to off-season, truck demand decreases, and freight rates go back to normal too.
Surcharges/Accessorial Charges and other Special Handling Fees
If your shipment needs some kind of special handling or extra service, it will of course equate to an additional cost. For example, your shipment needs to be delivered to an area with limited or restricted access like an exclusive residential area, a military or naval base, a school, a church, a prison, or some other building of the sort. In such case, regular procedure might have to be deviated from to make the delivery of your shipment possible. And such deviation from procedure will necessarily be charged an additional fee for causing delay and a bit of inconvenience.
Natural Disasters and Inclement Weather Conditions
Bad weather and natural calamities affect the truck industry as it causes immobilization and drastic changes in delivery schedules. When goods get stuck, freight companies will be faced with over-capacity problems. To resolve this imbalance, trucking companies will resort to charging premium fees. Then while on the road, truck drivers are forced to divert from normal routine like make more stops, or take a different route to avoid impassable roads. This makes them use more fuel than usual and to compensate for this, they pass on the additional cost to their customers. Freight rates depend on several different factors. As such, it’s not realistic to expect that you’ll always be charged the same fee for shipping the same freight every time. Contact us for a free rate quote today…