Main Factors Affecting Freight Charges

The cost of transporting commodities from one place to another is affected by various factors.  Freight charges may vary from one destination to another but there are standard issues that influence shipping rates on a global level.  These include:

Mode of Transport:  This allows business owners to choose the right means of transportation depending on the size, perishability, and the fragile state of the cargo.  Large shipments require spacious cabins and well-equipped freight vehicles.  Some goods are too delicate to fit all in one truck, hence the option of cargo trains in transportation.  If you are transporting perishable items through the air, the cost will be higher than opting for a truck equipped with preservatives.  Water transportation takes longer and carries heavy equipment; therefore, freight rates differ according to the amount or the number of items in question.

Weight: The less than truckload shipping (LTL) rates are set in a manner that favors the heaviest loads.  According to carriers, LTL costs less per a hundred pounds for heavy cargo, but freight charges are distributed using the various weight groups set aside for all shipments.   On that account, more weight means high freight rates and vice versa.  For supply chains, full truckload (FTL) is cost effective and fast.  Their freight rates follow the same rules as the LTL, but the latter makes fewer or no stops.

Distance and Time: Shipping companies charge less while delivering within their geographical location, but they sometimes tend to receive items for clients beyond their reach.  Instead of returning the cargo, they transfer it to the nearest LTL carrier who in turn charges more for the final delivery.  Basically, the longer the distance, the higher the price.  Just in time (JIT) deliveries are charged more due to the urgency of the products in question.  Most carriers have a specific time assigned for transportation.  On that note, it will cost more to adjust the company’s schedule or ensure fast delivery.

Density and Classification of Freight: To determine density, shippers take the total weight of the cargo and divide it by mass. Also, include detailed information about the package’s physical appearance (i.e., protrusions or overhangs). The denser a shipment is, the lower the charges and the lighter it is, the higher the price. How so? The LTL freight rates are classified according to the various classes (ranging from 50-500) established by the NMFTA (National Motor Traffic Association). They fall into lower and higher-class levels. The former represents freights that are dense and easy to handle while the latter covers the light and fragile shipments.

Other factors include:

  • Extra services given by carriers beyond their usual routes, drop off points, or docks involve making deliveries inside a prison, jail, school or church. Adding another extra mile to their schedule means more fuel hence higher freight rates.
  • Negotiations can be carried out between a carrier and a client in cases where the shipment falls into the lower and higher class. Vendors transporting multiple commodities seek the Freight All Kinds (FAK) rates because the rates are cheaper despite the shipment’s weight.

Learn more about Matrix Transportation and the transportation services they offer including: dedicated truckloads, JIT truckloads, less than truckload (LTL), same day expedited FTL and LTL, full truckload, warehousing, cross-docking, and trailer rentals at www.matrixtransportation.com  To contact one of our trucking experts call toll free 888.896.2405 today.

This entry was posted in Uncategorized and tagged , , , , , , , , , , , . Bookmark the permalink.

Leave a Reply