Large and small businesses are always looking for ways to cut costs and increase operational efficiency. Shipping costs account for a significant portion of a company’s overhead. In 2017, U.S. companies spent over $1.7 trillion on shipping costs.
One of the biggest reasons businesses choose freight shipping is its cost-effectiveness. In an increasingly competitive global market, it’s no surprise that many are seeking the cheapest way to ship freight to save money.
Factors Determining Freight Shipping Rates
Freight rates are calculated based on several elements. Knowing the factors that may affect your shipping costs is an excellent first step to saving your company money.
Shipping Method
One of the primary factors affecting your freight shipping rates is the shipping method used. The most common types of freight shipping methods are Full Truckload (FTL), Less Than Truckload (LTL), and Partial Truckload (PTL).
- FTL freight refers to shipments that take up an entire container, truck trailer, tanker, or the equivalent storage space of a transportation vehicle. Although you will pay higher prices for FTL shipping (cost-per-miles is the basis of FTL freight quotes), the FTL shipping method ensures your freight goes directly to its destination without making stops elsewhere, making it one of the quickest and safest ways to ship freight.
- LTL freight shipping is for shipments (typically 4,000 lbs. or less) that occupies part of a 40-foot container, truck trailer, or storage unit. Your shipment shares space with freight from other business shippers, even if they are intended for other destinations. If you’re looking for cheap freight shipping, LTL may be the shipping method you need because you only pay for a fraction of the truck’s space. However, it comes at the cost of longer transit times, as the other shipments have to be delivered to different destinations first.
- PTL freight is a hybrid between LTL and FTL, with shipment quantities larger than LTL but less than an entire container, such as in FTL. Using PTL freight offers a compromise between FTL and LTL, with faster shipping than LTL but costing less than FTL. PTL freight transportation costs usually fall between LTL and FTL.
Freight Class
Freight classification is a standard method designed by the National Motor Freight Traffic Association (NMFTA) and the National Motor Freight Classification (NMFC) to categorize freight by density and durability. Freight class is a way to separate more fragile items from more durable ones when shipping LTL or PTL.
Business shippers opting for FTL shipments don’t need to worry about freight class because the entire vehicle is filled with one type of freight.
The freight class of a shipment is calculated according to its density, fragility, need for special measures against theft or mishandling, and how easy it is to stow in a container.
The freight class chart features 18 classes and number codes, ranging from 50 to 500. The lower the freight class code number, the denser the cargo type.
Freight classes affect your freight costs based on how quickly shipping staff can load and unload the shipment. The more durable and easier to handle, the quicker they can get the job done, resulting in lower freight pricing. However, your freight costs will increase if your shipment requires more care and precautions.
Size and Weight of the Shipment
Your shipment’s size and dimensional weight are vital components in determining shipping costs. Heavy items are naturally more expensive to ship than smaller, lighter loads as they require more fuel resources and labor costs.
Many shipping carriers offer freight shipping calculators, letting you enter your shipment dimensions and exact weight to determine the dimensional weight and associated costs.
Mode of Transportation
How your goods are shipped will play a significant role in how much your shipping costs will be. The primary freight shipping transportation methods are air freight (by cargo plane), ocean freight (by cargo ship), and ground freight. Ground freight is further subdivided into road freight (by truck) and rail freight (by train).
- Air freight is the fastest mode of transport but also the most expensive. Shipping via air subjects your cargo to a restrictive size and weight limit.
- Ocean freight is the slowest but also the cheapest option. Sea freighters also support the heaviest load shipments; the largest cargo ship types can support over 20,000 shipping containers.
- Both ground shipping methods (road and rail) allow for delivery times between those of air and ocean freight. However, they each depend on specific infrastructure; the road and rail networks.
- Truckload shipping by road is more flexible, as the road network is denser and can reach more remote rural locations, but a single flatbed truck rarely supports more than one 40-foot shipping container (or two 20-foot ones).
- Shipping by rail is slightly faster and supports more cargo than shipping by truck. A typical freight train can support ten containers per railcar. Some railcars support container double-stacking. It isn’t uncommon for freight trains to carry over 200 containers at once, making it suitable for large shipments.
Shipping Origin and Destination
The further the distance between the point of origin and the point of destination, the more it will cost to ship. Also, proximity to major urban centers can significantly affect freight shipping rates.
Generally, shipping freight in cities and metropolitan areas is typically more affordable than in remote rural locations. The more distant the destination, the longer the delivery times, sometimes adding extra business days to the ETA.
Time Sensitivity
Expedited shipments typically incur higher rates and fees than a load that isn’t time-sensitive. When delivery time is of the essence, companies may spend more money to get their goods to their customers on time.
Special Handling Needs
Some goods require special attention when they’re shipped. If your shipment needs to be refrigerated or contains hazardous materials, it will require special handling and packaging, costing more.
Saving Money on Freight Shipping
If freight shipping is an essential part of your business, it’s critical to understand the factors that freight brokers use to determine the exact shipping rates. In your quest for the cheapest rates based on these factors, consider the following:
Research Freight Carriers and 3PL Companies
You’re probably not going to find the best rates without thoroughly researching all of your available options. Understanding prevailing rates and options can help you select the best freight shipping service provider for your business, ultimately saving you money.
The shipping market offers a diversity of providers, each with specific policies regarding pricing and discounts. A third-party logistics (3PL) company provides expertise in the shipping industry and has a broad network of connections that they can use to get you the lowest shipping rates possible. If you frequently ship items overseas, consider consulting a 3PL to minimize your freight shipping costs.
Don’t Be Fooled by Discounts
Although some companies may advertise huge discounts on shipping rates, look closely for all the details. These discounts are often based on inflated prices. Make sure you study pricing logistics thoroughly and ensure that the discounted rates help you save money.
Plan in Advance
Last-minute shipping will always be more expensive no matter which freight shippers you hire. Planning can help you avoid overpaying and allows you to take advantage of real discounts. It can also provide added flexibility in choosing a shipping service.
Hire an Experienced Shipping Company
Planning, researching, and reading all the fine print can be overwhelming and time-consuming for a business owner juggling multiple responsibilities.
Hiring a trustworthy company that understands global delivery services and the shipping process can take the stress out of price shopping, freeing you up to work on your business. Their knowledge and experience with global logistics can help you save time and money.
Different goods and businesses will have different needs in terms of time and cost. Asiana USA comprises a complex network of shippers that offer shipping options to suit everyone and custom-build the best shipping plan for you.
Asiana USA Can Help You Get the Cheapest Freight Shipping Rates
Asiana USA is a trusted leader in shipping and global logistics specializing in finding competitive rates for our clients from qualified shipping carriers. From shipping labels to your product’s final destination delivery, we will optimize your experience and offer unparalleled cost savings for all your global logistics needs.
Your trusted partner in shipping and logistics, Asiana USA, can help you streamline your company’s shipping process to save you valuable time and money. Call our team today for a free freight quote and information on how we can help you estimate your shipping costs.
