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8 Factors That Affect the Cost of Shipping Freight rates

January 15, 2023
FS Logistics Website Editor/Admin
shipping freight rates

8 Factors That Affect the Cost of Shipping Freight rates

In order to operate a successful e-commerce firm, you must take a number of factors into account from creating consistent marketing tactics to ensuring the availability of high-quality products. However, nothing is perhaps more crucial than delivering your items to customers safely while also keeping shipping freight rates to a minimum for both parties.

The cost of shipping can make or break your company. In fact, they are the main cause of cart abandonment for 75% of online shoppers. Therefore, it’s crucial to keep these expenses under control.

Want to keep your delivery costs in check? Continue reading to learn the 8 main factors that affect your shipping freight rates.

8 main factors that affect shipping freight costs

1. Fuel prices

Fuel is a must for all kinds of courier services in order to transport your packages from point A to point B. This makes the rising and fluctuating cost of fuel the main element influencing freight costs.

The cost of operating trucks, cargo ships, and airplanes decreases as gasoline prices decline. In the end, this would reduce the cost of transportation. In contrast, greater fuel prices translate into more expensive shipping.

2. Distance

Freight rates can also be impacted by the cargo’s origin and destination.

Be aware that different ports of disembarkation have varying fees if you’re shipping through the ocean. You should be aware that shipping charges can vary depending on the currency rates between the various nations when transporting merchandise abroad by air.

It’s also crucial to be aware that shipping charges increase the further a shipment has to travel to reach its destination. For instance, shipping cargo domestically would be much less expensive than shipping it internationally.

Tip for you: The distance traveled is really out of your control as a business owner. However, in order to be closer to your clients, you might think about operating fulfillment centers close to important places. In the end, this would result in lower delivery costs.

3. Dimensions and weight of the package

The size and weight of the packing are deciding elements that determine freight charges.

The cost of shipping would increase as the size of the packaging increased. The weight of the cargo has a similar effect; bulkier shipments can incur far higher shipping costs than lighter ones.

Even though you can’t actually adjust the weight of your things, you may decide on the kind of packaging you’ll employ. Make sure the box or crate you purchase is big enough to hold your merchandise yet still snug. You can lessen the possibility of cargo damage during transit by choosing a packaging material that is precisely suited for the job. Avoid packing your cargo into a large container because it may bounce or shake more easily.

4. Demand Of Freight

Additionally, shipping prices would be influenced by the specific freight requirement. For instance, you could be tempted to charge more for these items plus delivery fees if stock is scarce but demand is great. In contrast, if business is sluggish, you can reduce product prices or even run “free shipping” specials to clear out the additional room in your warehouse.

5. Insurance And Tracking

The most affordable alternative on the market is not to use cargo insurance and tracking. In fact, it may sharply raise your delivery expenses.

Nevertheless, as a business owner, it’s still a factor you should take into account while exporting your goods because it offers several benefits for your company’s safety. It serves as evidence that you have previously sent the parcel to a courier service, for starters. In the event that the cargo is lost or damaged in transit, it also covers your expenses. In the end, this improves client satisfaction, which raises your revenue.

6. Duty And Customs

You’ll have to cope with many stringent customs laws if you frequently cater to and ship items to consumers overseas. You must pay additional charges for this, which can differ substantially depending on the nation.

Typically, consumers are responsible for these unforeseen additional delivery expenses. However, it’s crucial that you, as a business owner, incorporate this information in your shipping policy. You should clearly state that these unforeseen expenses are out of your control and that you will not be compensated for them.

7 .Geopolitical Activities

A variety of geopolitical developments can have an impact on international shipping prices in addition to customs and tariffs.

For instance, companies that primarily employ marine freight have been experiencing sizable losses as a result of international piracy. Additionally, courier companies are obliged to use longer transportation routes and pay higher insurance premiums as anxiety over pirates and rogue governments grows every day. In the end, this results in high freight charges.

Have You Heard? The World Bank estimates that piracy has cost the world $18 billion in losses.

8. Weather

The weather, unlike other elements, has a limited impact on freight rates, but it nevertheless affects how much you spend to ship your cargo.

Busy ports, for example, would still charge for delayed goods whether or not they were due to natural disasters. Major airlines (who are typically impacted by airport closures brought on by flooding) and haulage firms are also subject to this penalty (that may be affected by damaged roads due to extreme rains).

The distance traveled, the size and weight of the cargo, and other factors can significantly affect freight shipping rates. Fees for insurance and tracking, as well as additional payments for customs, may also have an impact. Fortunately, you may reduce the relatively big amount by being aware of these 8 elements that determine freight prices, which will ultimately result in future cost savings.

Four Sons Logistics – Logistics Company in San Diego

Are you looking for a logistics company in San Diego that provides trustworthy logistics services at affordable prices? With more than 25 years of experience in the field, Four Sons Logistics is dedicated to offering our clients top-notch freight forwarding services. For your needs in air freight, land freight, and sea freight, have a look at our selection of delivery and trucking services. To begin with, get in touch with us today!

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