x Do you have export or import shipments and need to learn more about Freight Charge in freight transport?
x You are not sure how to calculate Freight Charge most accurately and what factors determine this fee?
x Do you want to know what the role and significance of Freight Charge is in freight transport?
At Proship.vn, we will use this sharing article to answer in more detail and specifically what Freight Charge is, how to calculate Freight Charge, factors that determine Freight Charge freight charges, what role does Freight Charge play? What is the role and meaning,...as well as important notes when negotiating Freight Charge.
What does Freight Charge mean?
What is Freight Charge? Freight Charge is the shipping fee, the cost of transporting goods from the starting point to the final destination in the logistics process that the shipper must pay for transporting goods through the transport service unit or Company. forwarding company.
Freight Charge includes many components, from actual shipping costs, goods handling, to additional services such as insurance, to ensure goods are transported on time and safely to the destination.
Freight Charge can include many related costs such as: transportation costs, cargo handling fees, container loading and unloading fees, insurance costs, and other surcharges.
Freight Charge depends on the weight of the goods, size, type of transport (sea, air, road), distance between sending point and receiving point, and transport contract conditions such as Freight Collect or Freight Prepaid.
What factors affect Freight Charge rates?
What are the factors that affect Freight Charge rates? There are 9 main factors that affect freight charges:
Demand
The laws of supply and demand also apply to the shipping industry. As demand for transportation services increases, rates also increase. High demand can be due to seasonal trends or economic growth.
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Type of Freight
The type of goods is the most important factor in determining freight charges. The goods may be perishable goods, dangerous goods, or standard goods.
Type of Transport
Freight transportation can be done by different means such as full truckload (FTL) or shared truckload (LTL). FTL is often cost-effective for large shipments, while LTL is suitable for smaller shipments that share space with other shippers.
Freight Weight and Dimension
The weight and size of goods directly affect freight rates. Heavy and bulky shipments often cost more because they require more space and handling during transport.
Destination and Delivery Time
Distance to destination and urgency of delivery are important factors. Long distances often result in higher costs due to fuel and time consumption. Urgent deliveries also require higher fees because of the need for expedited shipping services.
Shortage of Truck Drivers
The shortage of truck drivers is a current challenge in the logistics industry. As demand for freight increases, a shortage of drivers can lead to carriers having to pay higher wages to attract and retain drivers, increasing rates.
Fuel Costs
Fuel costs can significantly affect total freight charges (Freight Charge). As fuel prices increase, operating vehicles becomes more expensive, leading to higher freight rates. Conversely, low fuel prices can reduce freight rates.
Seasonal Influences
Seasonal factors also strongly affect freight rates (Freight Charge). For example, in the summer, the need to transport goods that require refrigeration increases, leading to increased transportation costs.
Economic and Political Situation
Economic and political factors such as inflation or geopolitical conflicts can affect freight rates. These situations can result in additional costs due to special trade routes and market stability.
How to calculate Freight Charge freight
Freight Charge is usually calculated according to: Freight Charge per unit, Freight Charge per kilometer and Freight Charge Percentage. :
Freight Charge Per Unit
This method is based on calculating the freight per unit of measurement of the goods. For example: Kilogram rate: $0.50 per kilogram; Cubic meter rate: $1.20 per cubic meter.
Based on these standard rates, shippers can estimate shipping costs based on the weight or volume of their goods.
Freight Charge Percentage
Another method is to calculate freight based on a percentage of the value of the goods. For example, if the freight rate is 5% and the value of the goods is €1,000, the shipping cost will be €50 (5% of €1,000).
This method is often used for high-value items, making it easier to determine shipping costs based on the value of the goods.
Freight Charge Per Kilometer
This method is based on distance traveled. Different types of vehicles have different fares:
- Van and Solo Truck: €0.40 – €0.60 per kilometer;
- Standard Truck: €1.00 – €1.20 per kilometer;
- ADR Vehicle (Dangerous Goods): €1.20 – €1.60 per kilometer;
- FRIGO Vehicle (refrigerated transport, temperature up to 0 degrees Celsius) (FRIGO Vehicle): €1.20 – €1.60 per kilometer;
- FRIGO Vehicle (refrigerated transport, sub-zero temperature) (FRIGO Vehicle): €1.40 – €1.80 per kilometer;
- Tanker: €1.50 – €3.00 per kilometer.
Meaning and role of Freight Charge
What is the role and meaning of Freight Charge? Freight Charge directly affects the cost and profit of the business, helps determine the total cost of the product and set a reasonable selling price. Specifically:
Supply chain optimization
Good management of shipping costs helps optimize logistics operations, ensure goods arrive on time and minimize costs.
Ensure business efficiency
Calculating reasonable Freight Charge helps businesses choose the appropriate shipping method, balancing cost and delivery time.
Increase transparency
Freight Charge creates clarity on payment responsibilities between sender and recipient, helping to avoid disputes and promote cooperation.
Shipping costs impact the choice of fast or economical transportation methods, helping businesses make decisions that suit their business needs.
What is Freight Charge and how to calculate freight charges are the specialized export and import knowledge that Proship Logistics wants to share with shippers, businesses, etc. Any questions related to Freight Services multimodal goods or Freight Charge, you can contact us via 0909 344 247 .
