Leading from our last blog post, A Guide to Understanding Your Freight Costs, we will discuss what...
Navigating your transportation options can be challenging, especially when it comes to cost. Ensuring you're getting a fair price involves understanding several key factors. Here's a breakdown to help you better understand what affects your costs and ensure you're getting a fair deal.
Navigating Freight Transportation Costs
1. Understand the Freight Basics
Understanding the basics of your freight is crucial. Consider the following:
Type of Freight: Determine what you need to transport. Evaluate its packaging, whether it's palletized, its temperature sensitivity, hazardous classification, and its value.- Dimensions and Weight: Understand the dimensions and weight of your shipment. Keep in mind that heavier and bulkier shipments generally incur higher transportation costs.
2. Determine the Mode of Transportation
Decide how you are going to transport your freight. Is it by road, rail, air, or boat? Consider whether it is a full load, multiple loads, or just a pallet or two. Full Truckload (FTL) rates differ from Less-Than-Truckload (LTL) rates, where multiple shipments share the same truck. Each mode—air, sea, rail—has its own pricing structures influenced by speed, distance, and capacity.
3. Calculate Distance and Route
Most freight is calculated on a $/mile basis. Once you know what you want to haul and the mode of transport, determine the distance your shipment needs to travel. Most trucking companies use PC*Miler to calculate distance, considering the size and weight of the truck. Google Maps can also provide a fairly accurate calculation. Generally, shorter distances have higher rates per mile, and as the distance increases, the rate per mile decreases.
4. Consider the Cost of Fuel
Fuel costs are a significant factor in transportation expenses. Most trucking companies charge a base rate plus a fuel surcharge. The fuel surcharge is based on the average national cost of diesel fuel and can increase as fuel prices rise. Some companies charge a percentage of the total base rate, while others charge a cents-per-mile fuel surcharge.
5. Assess Accessorial Charges
Assessing your product involves considering special handling or services required, such as power liftgate, residential delivery, inside delivery, and the method of loading and unloading. Additionally, be aware of handling fees that may apply for hazardous materials, oversized items, or special handling requirements.
6. Consider Freight Market Conditions
Market conditions significantly influence transportation costs:
- Supply and Demand: Rates fluctuate based on carrier availability and transportation demand.
- Seasonality: Peak seasons can drive up costs.
- Location: Shipping from a remote area or a major center can impact the price.
7. Account for Carrier Type and Reputation
The type of carrier you hire affects the price. Reputable carriers with more infrastructure tend to charge more than smaller, less reputable carriers. If you're dealing with a broker, they might get you a better rate, but there is a risk in not knowing who is hauling your freight. Brokers typically like to make 10-15%, which can affect the overall cost.
8. Incorporate Insurance Costs
Transportation can involve risks, including damage to freight due to negligence or accidents. To protect yourself, understand the value of your freight and the carrier’s limit of liability in the event of a damage claim.
9. Factor in Regulatory and Compliance Costs
Over-dimensional loads incur higher regulatory costs, including state and provincial permits and escorts. Timing can also be affected, as permits and escorts can take 2-3 weeks to arrange. Consider costs for toll roads, permits for oversized loads, etc.
Estimated Freight Costs
With all this information, you can see that many variables go into pricing freight, and all this information still doesn’t tell you exactly what it will cost to move your freight. While we cannot include every scenario here, we can give you a guide to what it may cost. All these costs will include a fuel surcharge.
| Freight Type | Description | Rate Range (per mile) |
| Dry Van Freight | Economical option for general freight transport | $1.50 - $3.00 |
| Refrigerated Freight | Specialized trailers required for temperature-sensitive goods | $1.70 - $3.25 |
| Open Deck Freight Legal Dimensions | Freight with irregular shapes requiring specialized handling | $2.00 - $4.00 |
| Over Dimensional Open Deck | Involves larger and more specialized freight, often requiring permits and escorts | $2.50 - $4.50 |
| Heavy Haul and Specialized Freight | Exceptionally heavy/complex freight where carriers with specific expertise and equipment are limited | $4.00 - $11.00+ |
On average, a truck and driver need to make $1000 - $1500 per day to be profitable. In a 10-hour day, a truck will cost about $150 per hour. For long-haul trucking, a truck can generally travel about 500 miles per day. Therefore, if you have a load that needs to travel 1500 miles, it would take approximately 3 days of travel, costing between $3000 and $4500.
Conclusion
Understanding freight costs involves navigating a complex landscape of variables. Each factor plays a crucial role in determining pricing. By staying informed and partnering with experienced carriers, such as Q-Line, businesses can optimize logistics, reduce costs, and ensure dependable transportation solutions tailored to their specific needs.
Troy Stimpson
Senior Director, Brokerage & Logistics
Troy brings over 25 years of transportation leadership to Q-Line as Senior Director of Logistics. With a deep understanding of transportation operations, he is dedicated to optimizing service delivery and building strong customer relationships. As a visionary, Troy leads his team towards continued excellence in logistics and surpassing industry standards.
