How to Calculate Freight Cost

How to Calculate Freight Cost

How to Calculate Freight Shipping Cost?

Freight shipping cost is a complex number that consists of multiple changeable parameters. In addition, there are three shipping modes that have their own pricing. If you consider shipping your products, you obviously need to know how much money you will spend.

It might be pretty hard to figure out how freight cost is calculated due to many factors that affect the price. However, if you know what you need to ship and where – it becomes much easier. The main factors that affect shipping costs are:

• Chosen transportation mode (truck, rail, ocean, or air)
• Chosen shipping service (LTL, FTL, expedited, etc.)
• Freight classification
• Required services (extra handling, packaging, driver’s help, storage)
• Insurance
• Shipping origin and destination
• Seasonality

What is Freight Shipping Cost?

In definition form, freight shipping cost is a price you must pay for your cargo being delivered from point A to point B. This price depends on the factors that we’ve already listed before.

You can also minimize that price by getting special offers from the carriers, or for being a regular client. Also, small things like packaging your own cargo will help to save a few bucks.

How Do You Calculate Freight Rates?

If you wonder how to calculate freight cost, we have some advice. NMFTA has set freight classifications that make this process pretty simple. Each type of cargo has its own class, and these classes have their own transportation price. So, to know the approximate freight rates, you need to know:

• Freight class of your commodities
• Size and weight of the shipment
• The density of the shipment
• Location type
• Destination between pickup and delivery

If you can’t determine the freight class by yourself, you can always speak with your carriers. By providing information about your cargo and its properties, your carrier can classify your freight and provide shipping rates.

How to Calculate Freight Density?

To calculate your freight density, you need to measure your cargo’s height, width, and depth.

• Then, you need to multiply these numbers, and you will get the total cubic inches of your shipment. 
• This number should be divided by 1,728 (number of cubic inches in a cubic foot). It will be the total cubic feet of the cargo.
• Divide the freight weight (in pounds) by the total cubic feet. The result will be the density in pounds per cubic foot.

How Do You Calculate Freight Cost Per Unit?

Freight cost per unit is an important factor. If you ship lots of products over a year, you can significantly cut the expenses on freight transportation. 

To calculate the cost per unit, you need to divide the total freight cost by the number of units you have shipped per year or quarter.

How to Calculate Transportation Cost Per kg?

Cost per weight, whether it is pounds or kilograms, is also easy to calculate. You need to take the total transportation cost and divide it by the total weight of the shipment. Most shipments cost per weight vary between $0,06 and $0,75. The lower the number you get, the less expensive the delivery was.