Freight rate refers to the price that a carrier charges for delivering goods from one place to another. It usually depends upon the method used for transportation which can be a ship, train, truck or an aeroplane.
Shipping is one of the most crucial decisions taken by the merchants. There are many factors that affect the freight rates such as different shipping carriers, the distance that has to be travelled, priority mails and different freight rates offered. The cost of shipping is formidable, and thus, you must know the best way of shipping your product.
However, it is not so easy to check freight rates. The process can be quite time-consuming. In other forms of transport, dozens of websites or apps are available which act as an aggregator and help provide the best rates. However, that hardly happens in the case of sea freight rates.
Factors impacting the calculation of freight rates:
The following factors affect the calculation of freight rates-
- Carrier charges: The freight transit charges are set by the carrier of the cargo.
- Cost of handling the goods and clearing them: It includes the cost needed to clear the goods, loading them and discharging them at the ports.
- Type of container used, i.e., LCL (Less Container Load) or FCL (Full Container Load): FCL or the Full Container Load refers to a shipment that can exclusively use a container. They are suitable for those who want to send a large number of goods. LCL or the Less Container Load includes shipping smaller consignments via ocean. They are suitable when you do not require a full container capacity.
How to calculate the freight rates?
Previously, calculating the freight rates wasn’t easy. However, with technological advancements, the process has become quite easy. Usually, freight rates consist of the freight along with a few surcharge costs such as:
- Charges for additional security- These charges are usually imposed by the port and collected as a lump sum.
- Basic freight surcharges- Shipping surcharges cause a substantial impact on shipping costs. These include war risk surcharge and other lower surcharges.
- Bunker Adjustment Factor or BAF- It includes the fuel used for surcharging the ocean transport.
- Origin charges- Origin charges are applied for each and every shipment before its departure from the original place. It includes seal charges, terminal handling charges, toll charges and documentation charges.
- Terminal handling charges- It refers to the charges that are collected by the shipping lines to recover the loading and unloading costs of the container.
- Basic Ocean Freight rates- Basic Ocean Freight rates refer to transportation rates which are determined by factors such as your cargo type and origin-destination combination.
- Transportation charges- It includes transportation costs that are incurred while moving freight from the vendors to the shipment port.
- Custom clearance- It includes the lodging of the customs declaration and production.
- Destination charges- Destination charges refer to charges which are based on the size of the container. It includes demurrage and destination costs.
However, you do not need to go through all these hustles as there are many online tools/ calculators available that can help you calculate freight rates online.
Steps to check freight rates online:
The process of calculating freight rates is the same everywhere. The following steps can help you in checking freight rates online:
- Enter the postal code of the place from where you want to ship your goods. You also need to enter the destination where you want the goods to reach.
- The next step is to enter the weight and the size of your packaged goods.
- Finally, the shipping service that will send your package as per your requirements will be shown along with the rates that would be incurred.
Benefits of using online freight calculators:
Online freight calculators are very useful and remove various barriers that are created by offline calculation methods. The following are the few benefits of online freight calculators:
- Saves time: Checking freight rates online can save a lot of time and efforts. While the traditional method of calculating the rates was quite complex, the use of internet has smoothened the process.
- Compare prices of different service providers: Online calculation of freight has made the process of comparing different rates a lot easier. One can compare different rates offered just with a click.
- Choose the fastest shipper: Comparing different rates can help you to find the best shipper that can meet your requirements. You can choose your preferred shipping line using a few clicks.
- Get the quotes 24*7: The traditional method of calculating the rates makes the process difficult in many ways. With online calculation, you can calculate the rate anywhere and anytime.
- Manage your shipments: Online calculators can help you in managing your shipments well with less time and efforts.
Calculating freight rates has become easier with technological advancements. Previously, one was required to have a lot of things to be calculated and lot of factors were variable. Thus, It would take up a lot of time and effort to find the perfect freight rate. This affected the speedy transportation of goods. Moreover, with online calculators, the task has become quite easier and hassle-free.