When considering LTL shipping options, product safety and shipping convenience are usually top of mind. However, there are other important factors that affect LTL freight rates you may not be aware of. LTL rates can be very confusing, but by understanding what affects them, you can come to a better conclusion of what may be right for your business.
Here are the top 10 factors that affect LTL rates when it comes to ground freight within North America.
Size is an influential factor for determining freight rates. Carriers have to optimize space while making sure no product is damaged, and coordinate pricing based of these organizational factors.
Weight is another important determinant for freight rates. This is based, again, on carriers building their trucks appropriately. Carriers need to ensure freight weight is evenly distributed throughout the truck while abiding by provincial and state laws regarding maximum weight.
3. Freight class
When shipping in the United States, freight rates are based on freight class. This is determined by the National Motor Freight Classification (NMFC) system. Each product is categorized based on density, value, or product specifications that determine transportability.
The origin and destination of the freight determines the “lane” it will be shipped through. Each lane has a different rate based on the volume of freight that is regularly shipped to that destination. This means that despite some lanes having a smaller distance, they won’t necessarily have a lower rate.
Shipping to locations outside of main cities will increase the cost of shipping. If a shipment is sent to a location outside a carrier’s normal service area, it will need to be transferred to another LTL for delivery. This results in higher costs based off the distance your shipment needs to travel.
6. Required transit time
Rates vary depending on the required transit time. If your freight has a strict deadline and expedited or air service is required, the rate can be substantially higher.
7. Rating System
Freight rates are often based on a hundred weight rate (CWT) when shipping within Canada. This means that the carrier has set a rate per hundred pounds of freight; this allows the carriers to charge for the specific weight of the freight.
8. Minimum charges
All carriers have a minimum charge. This ensures that they are able to ship packages of any size without the risk of losing money. If your freight is small enough, a more cost effective mail service option may be more suited to your needs than LTL carrier.
9. Additional charges
In addition to your shipping costs, carriers charge extra for required accessorial charges like the use of a power tailgate, or a residential and driver assist delivery. Depending on the importance of these options, these fees can be reduced by arranging for the consignee to pick the freight up from the nearest carrier depot.
Last, but definitely not least, carriers offer better rates for customers that ship higher volumes of freight. The benefit of using third party freight forwarders is that they have likely built up the loyalty discounts that they can then pass along to their customers.
At Radius Logistics, we do the legwork to create the best combination of rates & service to ensure your shipment is delivered on time! Contact us today to discuss how we can accommodate your shipping needs.