No matter what form of transport you choose to ship your goods, calculating freight rates is a crucial process. Shipping rates vary between providers, meaning you should always shop around to compare shipping quotes. Economic factors, truck drivers’ availability, fuel prices, and other variables constantly change freight rates.
As well as inquiring about shipping services for freight quotes, exporters can use a freight shipping calculator to determine the cost. To accurately estimate costs, you’ll need to know specific details about your shipment, such as the dimensions and weights of goods.
Two of the most popular methods of shipping are air and ocean freight. The following guide breaks down the costs associated with each of these approaches, enabling you to use a freight cost calculator to estimate shipping expenses.
What Determines Shipping Costs?
Several factors combine to determine shipping costs. The most crucial detail is the mode of transport. Air and sea transport rates are different, and each transport type uses a different algorithm to calculate the costs. However, all shipping modes use similar criteria, such as:
Freight classification is a way to differentiate products for transport. The National Motor Freight Traffic Association (NMFTA) developed 18 classifications. Each classification is determined by a combination of attributes, including ease of handling, value, weight, height, length, density, and liability.
This standardized classification method allows shipping companies to streamline operations, creating a more efficient logistics system. This information enables them to plan and facilitate smooth transit.
Dimensional weight is calculated by multiplying the length, width, and height of a package. It demonstrates what space and weight an item will take up, making freight capacity calculations a lot easier. Dimensional weight is significant in determining less-than-truckload (LTL) shipments.
Some air freight companies either charge by actual weight or dimensional weight, depending on which is higher.
Distance has an enormous impact on shipping costs. Predictably, the longer the distance traveled, the higher the price tends to be. For international shipping, there can be additional costs for specific regions, such as taxes and duties.
For all shipments, essential documents such as bills of lading are needed for goods to pass through customs.
How Fast You Need to Ship Goods
Transit time is another influential factor in determining shipping costs. Typically, the more time-sensitive shipping is, the higher the cost. Sea freight is generally a lot cheaper than air freight. However, it takes much longer. Ocean shipments from China to the US take around 30 days. Air shipments are instant freight in comparison, taking only a few hours.
Certain items, such as heavy machinery, fragile goods, or hazardous materials, may require special handling throughout the shipping journey. This will increase shipping costs.
In addition to the main criteria, several additional fees may include:
- Security surcharges
- Terminal handling
- Fuel surcharges
- Airport transfers
- Customer service
- Customs brokerage
The chargeable weight mainly determines air freight costs. The actual weight or the cargo’s volumetric weight becomes the chargeable amount, depending on which number is larger.
Ocean freight is determined by volumetric weight. Large shipping vessels must be packed carefully in terms of space and weight to ensure goods are delivered safely and timely.
There are two main types of ocean freight:
- Full container load (FCL): when an exporter has enough cargo to fill an entire shipping container.
- Less than container load (LCL): some shipping companies consolidate shipments by combining cargo from multiple exporters that don’t have enough cargo for a full load.
LCL is an excellent option for businesses that don’t ship in large quantities as they pay only for the space they need. However, due to the additional work that goes into this process, it is usually slower.
Calculate Costs Before Choosing a Shipping Method
Freight rates are rarely static for long periods. Businesses need to be vigilant of changing prices to ensure they remain as profitable as possible. Shipping companies often offer reduced rates at late notice if they have space remaining.
For shipping advice from a leading international shipping company, contact Asiana USA at (855) 500-1808. Our staff can provide you with whatever additional information you need.