Freight shipping moves an incredible variety of goods across the US and the globe. It’s a complex system that, in the big picture, delivers consistent results across the supply chain.
Understanding the costs of freight shipping can help you make a more informed decision for your business. Dependable carriers will give you estimates, for your specific load, of course. However, knowing what goes into calculating those costs can only help you when choosing a carrier.
Let’s take a look at the major factors involved in determining the cost of freight shipping. Then, we’ll take a look at drayage — the short-distance transport of intermodal containers using trucks — from the same perspective.
How are Freight Shipping Charges Calculated?
The cost to ship freight can change significantly from one shipment to the next. Weight and volume, distance traveled, freight class, and more all come into play. Here’s a review of the major factors involved in calculating freight shipment costs.
Weight and Volume
C.H. Robinson explains that weight and volume both come into play in terms of calculating freight costs.
Weight is important because trucks can only legally carry so much freight. The federal limit for gross vehicle weight is 80,000 lbs., according to the US Department of Transportation. These rules apply to interstate highways and the broader National Highway System.
Volume is a crucial consideration because carriers want to maximize the efficiency of each shipment. Ensuring a shipment can fit in a standard semi-truck trailer is also important logistically.
Freight Class and NMFC Code (for LTL Shipments)
Freight classes and NMFC codes help less-than-truckload (LTL) shippers define and categorize commodities shipped by truck. LTL shipments include smaller loads from several customers. That makes it especially important to understand the specifics of each piece of freight within an LTL shipment.
Coyote Logistics explains that:
- Freight class groups different types of items shipped into shared categories. These are largely but not totally based on density. They help carriers determine how easy or difficult it is to move a particular load.
- NMFC codes offer more specific information for items in each freight class. These take important attributes for carriers, like ease of handling and liability, into account. This concept is also referred to as transportability, the National Motor Freight Traffic Association explains.
These factors are less important for full truckload (FTL) shipments. Knowing shipment weight and volume provides enough information in this context.
Distance Traveled
How much does it cost to ship freight? A major part of the cost stems from the origin and destination of the load.
It’s ultimately a simple concept. The longer a load needs to travel, the more it will cost to ship that freight. As distance increases, more time and fuel are needed to complete a delivery.
A similar but distinct consideration is the ease (or difficulty) of delivery. If an appointment is needed or there is no loading dock, costs can rise.
Special Equipment
For shipments that fit into a standard trailer and don’t need temperature control, special equipment won’t come into play.
However, perishable items, oversized and overweight loads, and other types of shipments require special handling. That means using additional equipment, requesting special permits, and other tasks that can incur added costs.
Demand, Fuel Prices, and Similar Factors
An increase in demand can cause the cost of freight shipping to increase. So can a jump in fuel prices. Carriers need to maintain their profit margins, so they take these shifting factors into account when determining freight shipping charges.
Drayage Freight: Costs of Completing the Last Mile in Intermodal Freight Transport
In the supply chain, drayage refers to the short-distance transportation of intermodal shipping containers to and from ports. Drayage generally represents the start or end of a container’s journey.
Drayage costs are similar in the big picture to standard freight shipping costs. However, the specialized nature of this service, such as the need to work within busy, complex ports, also comes into play.
How much does freight shipping cost when it comes to drayage? These factors are foundational in determining the price of drayage.
Shipment Weight and Size
All drayage shipments fit into shipping containers. However, the weight and size of a specific load will influence the cost of delivery to the terminal or final destination. A higher weight means more fuel is needed to deliver the shipment, for example.
Distance, Total Mileage, Traffic Conditions and Terrain
Drayage pickups and deliveries might cover 1 mile or 100. Drayage pricing considers distance and total mileage to account for:
- Fuel costs
- Active driver time
- Equipment availability and wear and tear
Hauling a container across flat land is more fuel efficient than the same trip across hilly terrain. For heavy trucks hauling heavier containers, that has a major impact on cost.
A similar concept comes into play for traffic conditions. Drivers burn more fuel and spend more time in heavy traffic than they do when roads are open. That’s true even for trips of the same distance.
Time Spent By Driver on Job
If a driver has to wait for a shipment to go through customs, it adds time to the job. That takes the driver away from other profitable work. The same is true for situations like waiting for a loading dock to open up at the delivery point.
Port and Carrier Fees
Ports charge additional fees, called demurrage, when a container isn’t removed in an agreed-upon timeframe. Drayage providers charge pre-pull fees when they have to store and secure a customer container before delivery.
There are plenty of other examples when it comes to fees. Speaking with your carrier can help you understand which additional costs might apply, and how to avoid them.
Iraheta Bros. offers expert drayage services to and from the Port of Oakland. Our skilled drivers, specialized equipment, and commitment to excellent customer service deliver remarkable results.
Simplify your transportation needs today!