Freight rates

What Factors Can Affect Freight Rates?

Freight rates can vary a lot! Most of the time through no fault of the shipping provider themselves, there’s a multitude of factors that play into the increase and decrease in rates available. Each factor has a unique influence on how much transportation companies charge to transport different cargo. So, understanding how these changes and fluctuations in price work is crucial to business owners and operators alike, to be able to get the best rates possible, whether that means waiting to ship (given the shipment is not urgent) or shipping at a very specific time to beat seasonal rush. With a more in depth knowledge of how these pricings work, it’ll help you to be able to budget accordingly for the most part and perhaps create more efficient plans to avoid higher rates.

Let’s get straight into it…here are some factors that can affect freight rates significantly…

Factors Affecting Freight Rates πŸ’°

Freight rates

Seasons πŸŽ„

We thought this would be very fitting as we are right in the middle of the festive season as we write this. It’s times like these when demand has increased significantly for truck loads and there isn’t as much availability of trucks due to limited capacity.

This means freight prices may be increased over the holiday periods, so watch out for those hikes in prices.

To avoid under-budgeting, when there are holiday periods on the horizon perhaps forecast as closely as possible to previous years’ budgets and partner with a fantastic shipping provider who can help to stick to yourΒ budget while there are market fluctuations.


Disruptions β›ˆ

Disruptions like severe weather, natural disasters, pandemics are all factors that can again influence fluctuations in freight rates. When transportation companies are faced with these awful conditions, it can lead to having to adjust shipment needs, completely rerouting deliveries, and significantly increase transit times which can be incredibly costly in money and time for the logistics company.

There isn’t much advice we can give when it comes to natural disasters as they’re completely out of everyone’s control. We guess, the best piece of advice we can give is having a contingency plan for all of your shipments.

Distance πŸ›£

Freight rates

For obvious reasons, distance is one of the fundamental factors that affect how much transporting your goods will cost. Typically, the longer the distance, the higher the cost for the job, due to increased fuel consumption, lengthy transit times and also increased operational expenses incurred.

To reduce costs, again partner with a great logistics provider who can strategise ways to minimize costs , but also if your freight does not fill an entire truck and isn’t of the utmost urgency, opt for an LTL service where possible and share the truck trailer with other loads. This will reduce transportation costs significantly.


Weight & Shape πŸ‹οΈβ€β™€οΈ

Just like the distance, freight rates are pre-determined on the weight, size, shape and density of your cargo. The larger, heavier shipments that require more “man-power” and specialized equipment are going to come with higher costs.

There isn’t much wiggle room around this one, as some freight simply cannot be broken down into smaller pieces and you can’t change the dimensions and weight of the freight. So again, the best advise we can give is to partner with a best-in-class specialized shipping provider (like PEI πŸ˜‰) to negotiate the best rates.

Speed & Flexibility πŸ’¨

Emergency, expedited and flexible shipments come with a significantly higher price tag also. All of these services are classed as ‘premium’ options. They work to deliver your goods as quick as possible with flexible pick up and drop off times. Due to these types of shipments taking priority over others in every aspect, including: planning, handling and shipping, the higher price tag is justified.

Obviously emergency shipments cannot be avoided. However, where possible planning out transportation with notice and as far in advance as possible can reduce rates. Also, without sounding like a broken record again, be sure to partner with an expert logistics provider that offers these quick turn around services, so you’re not left wondering how to fulfil an urgent shipment should one arise.

We are experts at PEI at emergency, expedited and rescue shipments just so you know for future reference πŸ˜„

Freight rates

Fuel Prices & Operating Costs ⛽️

As you can imagine, fluctuations in fuel price directly impact freight rates and operational costs for transportation companies. Logistics companies seem to have been hit with higher fuel costs over the past few years. Therefore, leaving transportation companies with no choice but to make adjustments to their freight rates to off-set these fluctuations.

At PEI we are completely transparent with our fuel surcharges and send the up to date charges in a weekly newsletter to our wonderful customers.

Type of Truck 🚚

Whether your freight demands a flatbed, conestoga, step deck or cargo van each truck type has different pricing points for use. For example, a conestoga truck is typically going to cost more than a cargo van. This is because of the specialized, large and heavy nature of the freight they can accommodate.

Perhaps one piece of advise would be, if your freight can fit onto many truck types, get a quote for each and weigh up the pros and cons of the different type of truck before making any decisions. However, most good logistics companies should already do this for you, guide you on the best form of transportation and give you the best quote they can.

Conclusion πŸ€”

As we’ve spoken about above, all of these, plus more factors contribute to the ever fluctuating freight rates. Having an understanding of these factors helps businesses to consider and adapt their operations to optimize transportation strategies. They can also then effectively manage freight costs and stick to transportation budgets. A recurring theme we can see throughout this blog, is that partnering with an expert shipping provider can save you money on your important shipments.

How Can PEI Help?

At PEI we are experts in our field of specialized shipping and believe we are always fair with our pricing and try our best to stay competitive. Why not see how we could help with any of your logistical needs?

Have a friendly no strings attached chat with one of us on Phone: 888-SHIP-911, someone is always available 24/7/365. We can’t wait to hear from you or use the link below πŸ˜„


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