Calculating Freight Rates

Let us go through the various factors and how it’s possible to decide what an overall shipment rate must be.

Lane – Origin to Destination

Mileage, of course, will dictate overall cost, yet not all lanes will cost the same. A lot of it will depend on freight volumes out of and in an area. For example, Florida will consume more than it produces. There’s more opportunities for freight going into Florida then are coming out of it. Therefore, usually it’ll cost more to ship a truck into Florida then out. Multiply that all over North America and you’ll have countless lanes to consider. Oftentimes, trucking companies will have a guide to help them referred to as the “state to state rate matrix”.

Equipment – Type of Trailer

The type of trailer may have a lot to do with its rate:

  • Specialized
  • Double Drop
  • Stepdeck
  • Flatbed
  • Van

Dimensions- Weight and size of commodities

The height may dictate the required trailer type Even though the larger something is the more it costs, usually it’s more about weight. Weight will use more fuel to haul, therefore it has a more direct expense related to it. It is vital to point out that overweight and oversize hauling add extra costs.

Time of Year

Like the cost changes inside the lane you’re shipping in, so will the time of year. As a matter of fact, it may change on a daily, weekly, or monthly basis in some instances. Where the fourth quarter may be busy and thereby rates increase, the 1st quarter will slow and rates often can dip. Oftentimes, manufactures attempt to ship inventory during the end of the month; therefore, truck demand increases and thereby rates may increase.

FSC – Fuel Surcharge

There once was a period when trucking companies did not have a fuel surcharge. However, as the price of diesel kept dramatically rising, carriers scrambled to begin adding fuel surcharges to their rates.

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