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How Are Truckload Freight Rates Calculated?

Truckload freight rates play a significant role for shippers when deciding on the carrier or the company to move your freight. However, before landing a freight quote, it’s important to know which factors impact truckload rates and how they are calculated.  Truckload quotes are formed in a rather simple way compared to LTL rates, where density and freight class define the final cost of the shipment. In truckload shipping, freight rates are flat and mostly depend on mileage or door-to-door standard price. Commodity type rarely impacts the shipping cost as long as there is enough freight to fill in a 48 ft trailer.

What factors affect truckload freight rates?

Mileage

The main factor that determines the cost of truckload shipping is mileage. The longer is the distance, the higher the rate is. Since it’s not the only factor that impacts a freight rate, sometimes, there can be a different shipping cost for the same distance.

Seasonality

Freight seasons greatly affect the fluctuation of the rates. It also means changeable capacity, since the seasonal spike in truck demand causes capacity to shrink. Therefore, the rates start to go up. There are different peak seasons for various freight types. For example, produce season begins at the end of April and reaches its peak throughout the summer, which causes a high demand for refrigerated trucks capacity.

Lead time

Lead time is a general time that the shipper or broker spends on searching and arranging the load. The earlier you plan the shipment, the lower the shipping cost.

Fuel price

Essentially, fuel prices are constantly changing. The ups and downs of the diesel market define how the freight rates are calculated. Generally, the fuel surcharge is included in your freight quote, and it depends on the current price per fuel gallon.

Shipping time

Shipment’s flexibility also matters when freight rates are calculated. If you ship long distance, it may be more useful for the driver to have a delivery window or longer transit time. But the more urgent your freight is, the higher the overall shipment cost will be.

There are many other minor factors that impact shipment costs, such as assessorial charges, service fees, etc. Knowing which factors impact freight rates will help you understand rate fluctuations and make getting a freight quote easier.

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