If your business depends on moving goods, shipping costs can add up quickly. Whether you’re managing a small operation or handling a lot of shipments, knowing what affects the cost of freight shipping can help you make smarter decisions and stay within budget.
Keep reading to learn more about the cost of shipping freight and the factors that affect it.
Key Takeaways
- The cost of freight shipping is influenced by factors like freight method, shipment size, and fuel prices.
- You can save money on freight shipping costs by optimizing shipments, conducting freight audits, or going green.
- Working with a freight forwarder can reduce costs over time.
Factors That Can Affect Freight Rates
As a business owner, keeping the costs of shipping freight low is important, especially if you ship goods often or in large amounts. To help you plan better and avoid surprises, it’s important to understand how factors like shipment details and weight can affect the cost of freight:
Freight Method
There are three primary freight methods: air freight, ocean freight, and ground freight. The services you choose can directly impact the cost of shipping goods. For example, air freight has a higher price tag but offers faster delivery. Ground freight, on the other hand, is considered a cost-effective option, while ocean freight is often the cheapest but slowest choice.
Freight Class
Primarily used in less-than-truckload (LTL) freight shipping, freight classification has to do with several factors, including things like how heavy your shipment is compared to its size, how easily it can be handled and stowed, and how likely that shipment is to become damaged or to damage other cargo. With this in mind, fragile or hazardous materials will likely cost more to ship.
Freight Density
Freight density is the weight of your shipment compared to the space it takes up. This measurement helps shipping carriers decide how to classify your freight and how much to charge. Shipments that are heavy but take up little space usually cost less than large, lightweight ones. So, before booking a shipment, calculate your freight density to avoid extra charges.
Freight Weight and Size
In freight shipping, both the shipment dimensions and weight can affect the cost. This is especially true in less-than-truckload shipping, where you share trailer space with other shippers. Larger or heavier freight takes up more space and usually costs more to move. That’s why it’s important to provide accurate weight details and measurements.
Fuel Costs
Fuel is necessary for all freight methods. When there’s an increase in the cost of fuel, carriers may charge more to cover higher fuel expenses. If this happens, your overall budget can be affected thanks to fuel surcharges.
Shipping Origin and Destination
If your shipment requires special handling or is being delivered to or picked up from a location that’s harder to access, you may face additional charges. This includes places with limited entry, specific delivery instructions, or services like inside delivery, which may come with extra fees. International shipments will also be subject to much higher shipping rates compared to domestic freight.
Supply Chain Demand
Changes in the supply chain and shifts in demand can also affect freight shipping costs. When there’s high demand and limited space on trucks, ships, or planes, carriers may raise their freight rates. On the other hand, when demand slows down, prices may drop. With this in mind, seasonal demand around Christmas and other major shipping dates is likely to lead to additional costs.
How To Save Money on Freight Shipping Costs
Freight shipping can take up a big part of your business expenses, but there are cheap ways to ship your goods without hurting your delivery speed or service. Here are some tips to help you save on freight shipping:
1. Conduct Regular Freight Audits
Reviewing your freight invoices regularly can help identify billing mistakes, hidden fees, and inefficiencies. When paired with smart route planning tools, you can avoid costly detours and improve delivery times.
2. Optimize Your Shipments
One effective way to cut freight costs is by combining smaller loads into larger ones. This is especially useful with LTL shipping, where grouping shipments means fewer trips and lower overall expenses.
3. Go Green
Eco-friendly shipping practices not only help the environment, but they can also lower your costs. Some things you can do to reduce fuel and material expenses include using less packaging, choosing fuel-efficient routes, or working with carriers that use electric or hybrid trucks.
Choosing the Right Shipping Method to Cut Freight Costs
With multiple shipping methods available, it can be difficult to know which one is right for your needs. To make the decision easier, here’s a simple way to choose the right freight option:
- Air Freight – Air freight is the best option if speed is your top priority or you’re shipping perishables. Keep in mind that it’s also the most expensive option.
- Ground Freight – Ground freight is usually the most cost-effective option for short to medium distances. It’s ideal if you’re shipping to distances that are out of reach for other freight options.
- Sea Freight – Sea freight is best for large, heavy shipments that aren’t time-sensitive. It’s slower, but much cheaper than air travel. If you’re shipping internationally and have some flexibility with delivery time, this is a reliable, cost-effective option.
By working with a freight broker rather than handling your shipment in-house, you can save money on staffing and resources while gaining access to improved amenities.
What a Freight Forwarder Can Do for You
Managing large-scale or international shipping on your own can get complicated fast, and more complication means more costs. That’s why you should consider working with a freight forwarder. They serve as a guiding hand for your shipments. Here’s what they can do for your business:
- Manage cargo insurance
- Handle customs compliance
- Streamline supply chain logistics
- Meet warehousing and storage needs
- Manage documentation preparation
- Handle cargo shipping by land, air, or sea
- Carry out consolidation and deconsolidation
Benefits of Working With a Freight Forwarder
Outsourcing freight might seem like an added expense, but working with a freight forwarder comes with several valuable benefits. Here are some of the benefits to consider:
- A freight forwarder can connect you with trusted carriers and providers worldwide.
- Freight forwarders can help you access discounted rates by combining shipments from different clients to lower the cost.
- A freight forwarder can guide you through legal and regulatory requirements.
- Freight forwarders can also help to handle accurate documentation to avoid delays or compliance issues.
- A freight forwarder offers flexible transportation services that adapt to your shipping needs.
- With tools provided by freight forwarders, you can track your cargo in real time.
How To Choose the Right Freight Services Company for Savings
Not all freight logistics service providers offer the same level of reliability, transparency, or value. So, you should choose a freight forwarder that understands your needs and has a solid track record. Here’s how you can choose the right freight service:
- Check if the forwarder has experience with your type of shipment.
- Ask the freight forwarder if they work with multiple carriers; this can give your business more flexibility and access to better rates.
- Find out what communication tools they use, such as freight tracking or regular shipment updates.
- Check reviews or request references to make sure they have a strong and reliable track record.
Make Freight Shipping Cheaper for Your Business With a Freight Forwarder
Determining freight rates and cutting costs can be simple if you turn to a reliable freight provider. With the right partner, you can find better ways to handle shipping, avoid delays, and reduce expenses.
At Santos International, we’re proud to be a hard-working McAllen logistics company. We help your business move goods efficiently while saving you time and money. We can handle freight forwarding and other services to keep your shipping process simple. To make your freight shipping process easy, contact us today.