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It’s common knowledge that freight rates are on the high side recently. But why exactly do they cost so much? Or indeed go up and down so often?

 There are so many different cogs moving in the shipping world that it’s not a simple answer.

To give you an insight into why your quotes can vary so significantly, we’ll explore nine important factors influencing your freight rates in this blog.

Let’s go!

#1 – Cargo Type

What you’re shipping affects how much it costs to transport it from A to B. 

Hazardous goods that take time to process, for example, may well come in at a higher rate due to the time and manpower required to get your goods ready to load. The freight rates of valuable goods are also usually higher than average. 

#2 – Shipment Weight 

The weight of the goods being shipped is an important factor when it comes to the cost of freight rates. In freight shipping, pre-defined weight groups come set with a definite price bracket, meaning your shipment gets matched with a base freight rate depending on the category it falls into. 

Using high-quality, lower-weight packaging can help to mitigate costs on the weight front.

#3 – Shipment Density

Freight classes are used as a way to establish the transportability of commodities. Both the weight and density of cargo determine the freight class it’s put in, which, in turn, impacts freight costs. 

Cargo density is calculated taking into consideration the dimensions of the pallets and their packages, the carton and the weight of the pallet. These measurements allocate the cargo into a freight class, of which there are 18. Quite simply, the lower the freight class, the lower your freight quote due to the reduced risk of damage during transit.

#4 – Container Costs

How a consignment is packed also affects the cost of shipping it.

Container shipping costs vary, but in basic terms, you’ll either pay for a full container load (FCL), or a less-than-container load (LCL). And whilst opting for LCL might appear logical if your goods won’t fill a whole container, sharing the available capacity with other cargo means you’ll be faced with extra costs at the destination port to cover the time and manpower of separating the shipments.

Struggling to picture what a container load actually means? Read this blog to find out.

#5 – Lack Of Flexibility 

Flexibility in shipping can be tricky given the expectations and attitudes of one-click purchasing and same-day delivery, but rigidity around deliveries can harm your freight quotes.

Avoid being charged more expensive rates by planning ahead, optimising routes and being as flexible as you can where possible. 

#6 – Distance

Generally speaking, the further apart the source and destination, the higher the shipping cost. However, it’s not always quite that simple.  Geographical location and the complexity of both the trip and physical delivery all have a bearing on the price pit against your shipment being transported from A to B.

#7 – Seasonal Changes

Shipping costs rise during the holidays because transportation for goods is in high demand. Effective forecasting can help shipping companies gauge what to expect in the run-up to Christmas and other important calendar dates, meaning they are less likely to run into financial trouble unexpectedly.

#8 – Disruptions

Disruptions to the supply chain, as well as the transportation of shipments themselves, come in many forms, and all end up hiking freight rates skywards.

Worker strikes, adverse weather and even pandemics can hit, and with astronomical effects. A lack of bodies to process goods at busy ports, or ships awkwardly rerouted to avoid damage during rough storms, can cause disconnects in the process, long delays and increased costs all round. 

#9 – Mode Of Transport

How fast do you need your cargo to reach its destination?

Speed, security and cost are all determining factors when it comes to choosing how you want to ship your goods. And what you go for – sea, road or air freight – strongly impacts what you can expect from your freight quote. 

Not Sure Which Mode Of Transport Matches Your Shipping Needs?

We’ve got you covered.

Read our recent blog, ‘Air Freight Vs Sea Freight – Which Should You Choose?’, to explore the two most popular ways to ship your goods.