5 Factors That Affect Freight Shipping Costs
When choosing to ship cargo worldwide, there are various factors that can affect the cost of this. Understanding these factors is crucial for businesses that are looking to optimise their logistics operations and make cost-effective changes.
No one wants to be paying more than is necessary for their freight services, so by being aware of the key cost influencers, businesses can make more informed decisions that will benefit them in the long term.
Let’s take a look at the top 5 factors that shape freight shipping costs.
Freight Shipping Methods
The transportation method you choose to ship your cargo by, whether it be air, sea or road, is going to have the most impact on the cost of your freight. For instance, air freight, whilst being the quickest and most-effective method, is also the most expensive. This is due to the cost of fuel, handling charges at airports and the limited capacity aircrafts have for large shipments.
Sea freight on the other hand is a much more cost effective transport method if you have a large, bulky shipment that isn’t time sensitive. If you require cargo shipping to somewhere locally or within Europe, then consider road freight as your preferred transport method as it’s a more budget-conscious option for shorter distances.
You should always choose the transportation method of your freight based on your business requirements and the specific needs of your cargo.
Fuel Costs
Fuel costs are another major factor affecting freight shipping costs and can directly impact the rates that carriers charge across road, sea and air. Freight carriers will often adjust their pricing structures to accommodate the fluctuating prices which therefore passes on increased costs to the customer.
Cargo Weight and Dimensions
The weight and dimensions of cargo can play a significant role in determining the final cost of a freight shipment and it’s crucial to consider this. Heavier and larger shipments often require more resources and may need special handling to load and offload them, causing higher transportation costs.
When working with a freight forwarding company, it’s essential to provide accurate information about the size and dimensions of your cargo to ensure an accurate and cost-effective quote.
Supply Chain Demand
Depending on the situation of the supply chain and whether there has been a spike in demand, this can also affect freight shipping costs. In cases where transportation has limited space and its capacity is constrained, carriers could raise their prices to premium levels. Alternatively, if there’s a decrease in shipments and shipping is slow, prices could fall.
Mode of Shipment
When it comes to sea freight and road freight, there are different shipping modes you can use which can affect overall price. For example, if you’re shipping by sea but don’t have enough cargo to fill a full container, you may choose to opt for a less than full container load (LCL). This means that your cargo would share a container with another party’s cargo, however this is a much more cost-effective shipping option.
Similarly, road freight offers different options such as less-than-truckload (LTL) or full truckload (FTL), with the former being the more cost-effective option.
Understanding these factors and how they affect shipping rates can help you make informed decisions based on the size of your cargo, budget, and timeline. It’s important to work closely with your freight forwarder however to determine the best shipping mode that will meet your specific requirements.
The team here at Jenkar Shipping have the experience and knowledge needed to find the best solution for your shipping needs. Even better, our friendly team will work with you to get to know your business and build you a bespoke solution that is cost-effective and matches your requirements. Start your quote today to find the right freight solution for your business.