How to Calculate the Best Truck Freight Rates

When you need to ship cargo, there are usually two major concerns: 1) what will get the cargo there on time and 2) how much will it cost. While there are many variables that go into calculating trucking freight rates, rates are nearly always charged based on miles.

This per mile rate takes into account overhead and other unseen costs to the carrier. There may be some exceptions to this with certain charges listed separately from the hourly rates but there is always some kind of hourly rate

Here we will look at how truck freight rates are calculated and tips for getting the best truck freight rates.

What Influences Truck Freight Rates?

Chargeable Weight

Weight is a pretty obvious factor in how much shipping will cost. For many shipments this number will be a straightforward measurement of the actual weight. However, volume must also be taken into consideration. When calculating chargeable weight, the dimensions or volume of the shipment are converted into a weight measurement. For example, 1 cubic foot may equal 10 kilograms. This measurement is then called the “dimensional” or “volumetric weight.” Or, more simply, the the density of the cargo.

Chargeable weight is then based on which measurement is greater: actual weight or dimensional weight. This is to account for shipments of very light items that take up significant space such as pillows, cotton balls, and other items that are light for their size. On the upside, shipping denser cargo will reduce your per pound rate

Classification

Density, weight, and several other factors contribute to how the freight is classified. When discussing classification, we are looking at the National Motor Freight Classification. This system will give cargo a rating based on its density and how difficult it is to handle. Dense objects that are difficult to break are easier to handle which will give them a lower classification and make their rate cheaper.

Distance

Distance is another fairly self explanatory factor in freight rates. Unsurprisingly, longer distances will cost more per mile. This is largely due to the fact that a carrier may not be able to transport your cargo all the way to its final destination since carriers all have designated areas that they operate in. When your cargo must be shipped outside your carrier’s area, the items will be passed to a different carrier.

When there are multiple carriers like this, it is often more difficult to negotiate cheaper rates. This is why it is important to consider your carrier’s service area. Passing shipments to another carrier is not an inherently bad thing but the cost can be greater and transferring the cargo leaves more chance for items to be damaged or lost.

Base Rates

Though longer distances may incur additional fees, some smaller shipments traveling shorter distances can also be comparatively expensive because of the minimum rates the carrier has set. Base rates and minimums represent the lowest amount a carrier can accept to make the job possible. This is to cover expenses that are associated with all shipments regardless of distance such as the labour cost of loading the truck. Whether a truck has to go 10 miles or a thousand, you will still need to account for the time it takes to load.

Other Variable Costs

While base rates took into account many fees, they may not reflect other fluctuating costs such as the price of fuel. Fuel and other changing costs will also be factored into your total. This may also include any special handling needs such as a refrigerated truck or fragile handling instructions.

Speed

Expedited shipments will also be more expensive. While part of this extra fee is simply to hold a spot in the carrier’s schedule, there are also additional fees associated with shipping more quickly. Namely, multiple drivers are typically needed in order to ensure the truck does not need to stop to wait for a single driver to be rested enough to continue.

Tips for Negotiating Best Truck Freight Rates

Hire a Freight Broker: How can spending money to hire someone end up costing you less? Because freight brokers’ primary job is to save you money and get your items where they need to be on time. With an experienced broker, you will have someone on your side who understands how to negotiate rates, proper documents to file, and much more. Their connections are invaluable when seeking the best rates. Though not strictly required, they are an asset to consider.

Palletize Your Cargo: the easier cargo is to load and haul, the cheaper the rates can be. This is why, whenever possible, smaller items should be palletized together. Also, whenever possible, cargo should be condensed to further lower cost.

Question Fees: When discussing rates with a carrier, you should feel comfortable asking about individual fees. Having this conversation upfront will help you get a discount when possible and ensure there are no big surprises on the final bill. For example, you should ask about tolls that may need to be paid on the route. If there are, are they already included in the price or will they be added later? For long distance trucking on toll roads a factor like this can really add up.

Choose a Carrier who Can go the Distance: As mentioned above, longer distances will mean greater cost per mile since the cargo will likely need to be transferred. Look for a carrier who can take your shipment the whole way to reduce this cost. This can be especially important to cost savings if you regularly ship to and from the same areas.

Tips for Negotiating

Why Do Shipping Rates Fluctuate So Much?

Freight rates can vary wildly even from just one day to the next. This is frustrating for both the shipper, the person sending cargo, and the carrier, the company transporting that cargo because price increases are rarely just because the carrier wants to increase rates. Instead, these fluctuations are because of changing fuel costs, availability of drivers, delays due to weather, and many other factors that are outside of anyone’s control.

However, if you regularly ship the same type of cargo on the same route, it is reasonable to question the rates. Though it might not be possible to get a previous rate, you may be able to come to a compromise between the new and old rate.

Free Estimate on the Best Truck Freight Rates

When you plan to ship freight, the easiest and best way to calculate the costs is to simply ask an experienced freight shipping company. At RoadLinx, we offer free quotes for all your shipping needs including options for refrigerated trucks, intermodal shipping, and more. We also pride ourselves on providing a quality customer experience with dedicated shipping logistics experts who act as your main point of contact and who will keep you informed of changing routes and rates. To request your quote, call us at 905-760-1141.

Get a quote today!



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