Photo from PexelsOriginally Posted On: https://ventsmagazine.com/2020/06/21/how-to-estimate-freight-shipping-costs-a-business-owners-guide/If you are running a business shipping is one of the most critical aspects that you will encounter. The cost of shipping can eat into your profits significantly.
If you want to maintain the profitability of your business you need to learn how to manage shipping costs. To manage shipping costs you must understand how to calculate the cost of shipping.
Here is a guide that will show you how to monitor and estimate freight shipping costs.
Taking a Look At Your Options
If you are looking to ship then you have two major options for your business. These are full truckload (FTL) or Less than Load (LTL). The one you choose will have a direct impact on your shipping cost.
The cheapest way to ship is to use LTL. It is ideal for small businesses. This type of shipping sees you sharing space with other people that need shipping. This means your cargo is not shipped by itself but with other people’s products so that you can share the cost.
The opposite is true for FTL. However, you do get faster turnaround times and it is ideal if you are shipping fragile products. Depending on the type of business you run this may be important to you.
Freight Classification
This is important because it will help you to determine how much your shipping will cost. Your freight class will be determined by density, stowabiity, handling, and liability. Freight class is a standardized classification system that all carriers must adhere to.
Density is the main thing that will determine your freight class. Density speaks to the number of pounds per cubic feet of your shipment. The lower the density of your shipment the lower the shipment and the lower the cost.
Stowabiity speaks to how easy or hard it is to stow your item for shipping. Items that have unusual shapes are much harder to stow. Shipments that contain hazardous materials can also be problematic. This will increase your shipping cost.
Handling is important, especially with LTL shipments which are unloaded and reloaded at different stops. The ability of your shipment to handle the pressure will determine your shipping costs.
Liability is the final factor, if your shipment is more likely to be damaged or is hazardous you can expect increase shipping costs.
How to Estimate Freight Shipping Cost
As you can see there is a lot that goes into determining your shipping costs. One of the best things that you can do is get a freight broker so that you don’t end up paying more than you have to.
The amount you pay highly dependent on the rates of your carrier. There are often freight calculators available online to help you calculate the cost of your shipment.
A Final Look
There is a lot that goes into an estimate of freight shipping costs. Pricing changes based on a lot of factors. With so much to consider you can go ahead and do it all yourself but if you don’t have the time you have the choice of hiring a broker to do it for you.
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