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How to Determine Freight Cost

11th January 2021

 

With new businesses popping up daily, one of the biggest challenges they have is understanding one of the most important factors in getting goods across the country and world..freight class. Which freight class do they fall into? What are the things that determine freight class? What determines the price of that freight class?

 

Freight class is very important because it determines pricing of your freight. If you get this wrong or miss label something it can be a very costly mistake for your business. There are 4 parts to a freight class that you have to consider before shipping  your goods out into the world. Commodity or density, stowability, handling and liability.

 

Let’s first talk about commodities or density. 

 

Commodity, noun, a raw material or primary agricultural product that can be bought and sold, such as copper or coffee.

 

Some commodities are density-based while others are not and already have a predefined freight class, so no calculations are needed. For commodities that are density-based, they are calculated and determined by the total cubic feet divided by total weight in pounds. The lower your density on your freight, the higher your freight class is going to be, which means more green backs out of your piggy bank!

 

Next up is stowability. We’re talking about how easy it is to get your freight on and off of the truck that is transporting them. Hopefully, your packaging skills are top notch which is only going to help stow your goods on trucks, trains, boats, planes and other things….whatever those might be. 

 

If your freight is very much on the heavy side, has some sort of odd protrusions here and there or is a bit on the long side, it can be pretty difficult to load. Make sure you have clearly marked surfaces that can be stacked on or not as to not cause damage to your freight, again risking separating you from your hard earned money with a damage claim. Every now and then, you will come across situations where your freight is regulated by local governments. Certain types of freight might also be restricted to being loaded with other items. What this all boils down to is if your freight is a pain in the neck to load, the freight class will be higher which will cause the shipping cost to be much higher as well.

 

Now let’s move on to handling, which means actually getting your freight on and off the truck at the terminal or destination. How easy is it? Keep in mind that once your freight has left the security of your hands and facility, there are going to be multiple checkpoints and distribution facilities before it finds its new home at its final destination. Once again, if you are a packing expert and have nestled your freight nice and tight in whatever it is traveling in, you shouldn’t have any problems from point A to point B. Going back to the stowability of your freight, if it is hard to stow, if it’s heavy, fragile, shaped strange, or might be a hazardous material that needs special handling to not hurt people or damage anything; carriers tend to classify freight like this higher than others.

 

Last but not least, let’s talk about liability! We are talking about the likelihood that your freight might damage something else it is traveling with, get damaged itself or might be stolen. Is it dangerous to transport, can someone break themselves while handling it, are the materials within your freight hazardous? If you answered yes to any of those questions, than the liability for transporting your freight is much higher than normal and will be classified in a higher freight class, which, you guessed it, will cost you more money to ship it out.

 

Those are the four factors that go into making up the freight class for your goods. Are you considering those? Do you have them properly calculated into your costs? This can really have an impact on your bottom line and really be a headache if you get it wrong. Has this been a headache for you in the past? Reach and let us know what struggles your business is having in the freight department and see how InXpress can help.