Freight charges are very complex to understand. But they are a very important part of the logistics industry. Sometimes very experienced and intelligent freight forwarders also face challenges in dealing with freight charges. And, one of the most common reasons for mistakes is the involvement of multiple parties in delivering cargo. But there are a few things that can help you reduce the chances of mistakes in this area. 

You should get all the information about freight charges including their types and calculation methods. Learning all these things will help you avoid shipping complications and ensure successful deliveries. Moreover, working with a professional international freight forwarder can help you in successful international cargo deliveries. In today’s article, you will learn about every aspect of freight charges. Along with that, you will also learn about the factors affecting freight rates. 

What Are Freight Charges? 

Freight charges are the expenses for shipping cargo or goods from one location to another. These charges include transportation costs and many other expenses. Moreover, these charges vary depending on the shipment size, weight, nature of cargo, mode of transportation, and other services. These charges also include the charges for insurance, customs clearance, and many other additional services. They are crucial for smooth streamlining any logistical operation. In general, the shipper, the receiver, or the logistics company pays the freight charges. 

Types of freight charges 

Depending on the mode of transportation, freight charges are primarily of three types. These include ocean, air, and truck freight charges. 

How To Calculate the Freight Charges? 

I have already mentioned that freight charges include many expenses used for cargo shipping. Now, the question is how one can calculate these charges. Well, many factors on which the freight charges depend, and those factors are:

Customer Demand: When the demand for shipping space is higher, it will increase the volume of goods to be transported. Due to this, the goods will be available in limited amounts and users will compete for them. As a result, shipping companies get a chance to charge more for the limited space available. And, when the demand for shipping services is low, shipping companies reduce their rates. By doing so they can help the consumers looking to ship their goods at affordable prices. 

Distance: One of the significant factors to calculate the freight cost is the distance where goods need to be transported. If the distance is greater, the charges will also be higher. 

Changing rules and regulations: In many countries, shipping companies work according to governmental regulations. So, any amendment to the governmental rules and regulations will also affect the freight charges. 

Type and weight of freight: For example, hazardous materials and heavy materials require special handling. So, the cost of transporting such goods is more expensive. 

Besides these factors, modes of transportation, fuel prices, insurance, customs clearance, and packaging also affect the freight charges. 

Factors Affecting the Freight Rates 

Flexibility and Speed: If you need to get your goods with speed, it will increase the shipping cost. Moreover, if you want goods delivered to a specific or customized place, it will also affect the freight rates. An experienced 3PL logistics company can help you with flexible and speedy delivery. 

Density of shipment: It is one of the most important factors affecting the freight charges. The bigger package will have more density and it will need more space for transportation. No matter what mode of transportation you choose, more manpower and space will be needed to transport the goods. As a result, you will have to pay more if the weight and density of the package are higher. 

Disruptions: Any kind of disruption impacts the whole supply chain, transportation needs, and freight costs as well. Weather changes, shortages, pandemics, and terrorism are some of the major factors that affect supply chains. Shipping companies will need to reroute the deliveries and adjust shipping needs to streamline any logistical project in such situations. These obstacles affect the budget finalized for the shipment and increase the freight rates at the last moment. 

The Bottom Line 

You must understand that freight charges are an important aspect for businesses that ship goods regularly. Every business that manufactures or sells goods needs good transportation services to send them to the market. As discussed above many factors affect these charges. And, it is crucial to know which factors affect the freight charges. Distance, weight, size, type of shipment, and some additional services play a crucial role in calculating the freight charges. 

Calculation of freight rates is very important for businesses to save costs and maximize profits. Knowledge of different charges applicable during the transportation of any freight helps businesses negotiate better. Understanding these factors can help businesses choose the best option that suits their budget and needs. 

For example, air transportation is the most expensive mode of transportation. Moreover, long-distance and cross-border shipments cost more than the domestic ones. Along with that, heavy-weight and large-size shipments will need more manpower and space. So, the shipment companies increase the freight charges in such cases. A professional freight forwarder can help you avoid misunderstandings. They will also ensure the successful transportation of your shipments. 

Amerigo Logistics offers budget-friendly and customized services to meet your business needs. Every business or consumer wants their goods to be delivered on time without any damage. Moreover, they want the whole transportation process to remain cost-effective. So, they look for logistics companies that offer them cost-effective and personalized solutions for their shipments