Supply Chain Management

10 Shipping Factors That Affect Freight Shipping Costs

Freight Shipping Costs

You wear many hats when you run a business. You are responsible for making sure your business runs as smoothly as possible. All of this is done while maintaining economic efficiency and knowing how to adjust budgets. You will be surprised at how difficult it can be to estimate the freight shipping costs. The cost of your shipment is determined by a number of factors.

Knowing the factors that affect your freight shipping costs is the best way for you to determine if your business is getting the best price. You can make changes to your shipping strategies that are cost-effective by learning about these elements. These 10 factors will affect freight shipping costs and help you make the right logistics decisions for your business.

Top Factors that affect freight shipping costs

Shipping rates are affected by a number of factors, and nobody wants to pay for more freight than is necessary. The freight rates vary from one company to another, and different quotes can include different factors. Shipping costs are affected by a few main factors.

Your Freight Method

It’s crucial to know that the freight service you choose will affect your company’s costs. There are four types of common shipments:

  • Air freight
  • Rail freight
  • Land transport
  • Sea freight

You should consider your expectations and priorities when choosing a freight method. Each has its pros and cons. The two most common modes of transport are air and sea freight.

Air transportation is faster, but it costs more. Sea transport, on the other hand, is ideal for transporting heavy and bulky cargo. However, it will take longer for them to reach their destination.

Also read: What Is Supplier Development And How To Manage It

Freight Class

The standard for shipping pricing and classification is your freight class. It was created by the National Motor Freight Traffic Associates to provide a common platform for all LTL shipping companies and carriers. This system helps to make logistics and negotiations easier and more efficient.

These four elements determine freight class:

  • Easy handling
  • Density
  • Liability
  • Stowability

The Freight’s Class

Your Freight Class is the standard industry measurement and classification for shipping pricing. The density is the amount of space that your shipment takes up. This measurement helps determine the type of shipment and its overall price. The shipping process will be greatly affected by knowing the density of your freight.

Dimensions and Weight

The carrier will include the dimensions and weight in the final price. If you are shipping items by truck or trailer, you will be charged per hundred pounds or mile. If your shipment is LTL however, the weight and dimensions of your shipment will greatly affect its cost.

Fuel Cost

Fuel costs can affect the cost of shipping your freight. Fuel is our main source of transportation, so when fuel prices increase, shipping costs will also increase. Fuel is needed to move your goods by train, truck, cargo ship, or plane.

It’s important for those who ship within the United States to be aware that state-to-state shipping can affect your shipping costs. State fuel prices vary depending on local and state tax laws. It’s therefore important to estimate these surcharges and factor them into your budget.

Accessorial Fees

Shipping fees will be affected if your shipment needs special instructions from drivers. This could include residential deliveries, requests for redelivery, or private gate entry. Dock-to-dock is the best option for commercial shipping.

Any deviation is inconvenient for our drivers. If there are any issues, you may be charged an additional fee on your final invoice. Discuss with your 3PL service or carrier what they consider to be assessorial.

The Shipping Method

Shipping mode is a measure of how much freight you are shipping, and how quickly you want your shipment to reach its destination. If you need to ship something immediately, you can select expedited shipping. If you are more flexible, however, you can choose a delayed option.

The way that freight is shipped can also affect the cost of shipping. There are four modes of transport:

  • Full truckload (FTL): You need the full space that your hauler has to offer.
  • Less than truckload (LTL):¬†Your shipment does not fill the entire trailer. Your shipment may need extra handling if the carrier adds multiple loads to the trailer.
  • Partial truckload: The trailer is not filled to capacity. Carriers can maximize space, and the load stays in place because all the items are going to the same destination.
  • Intermodal: This method combines several shipping methods.

Also read: Supply Chain Planning: Definition, Process and Benefits

Supply Chain Demand

The freight shipping industry is also affected by supply chain changes, as well as an increase in demand. The carrier could increase the price if your transport method is limited in space. If shipping is slow you may see a drop in price. Shipping costs can be affected by the number of 3PLs and carriers in your area.

The Destination of Your Shipment

You may be charged extra if you have to make special instructions or if there are any inconveniences with your shipment. The same applies to the destination of your shipment. Freight shipping costs increase as the difficulty of delivering your cargo increases. You may be charged extra if you want your shipment delivered at the following locations:

  • School
  • Churches
  • Storage units
  • Extra security in establishments
  • Carnivals

The Distance Your Freight Travels

The farther your freight travels, the more expensive it is. Mileage will affect your shipping cost, whether you are shipping internationally, across the country, or regionally. Fuel and labor costs to transport your shipment will be accounted for by the company and included in the cost. It’s still important to shop around for the best price and compare quotes.

Written by
Barrett S

Barrett S is Sr. content manager of The Tech Trend. He is interested in the ways in which tech innovations can and will affect daily life. He loved to read books, magazines and music.

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