Whether you’re looking to improve your eCommerce operations or reduce freight costs, understanding shipping rates is essential. Freight cost increases can be the result of a variety of influencing factors.
Luckily, you can take a few simple steps to lower shipping rates. FreightWaves breaks down the top 5 factors that determine pallet shipping rates.
Freight Class
Whether you’re shipping items on a standard pallet or a custom one, the size of your freight plays a significant role in its classification. Freight classes are based on your shipment’s dimensions and weight and how it is packaged. Proper type ensures that you’re paying the correct rate for your freight and that it’s accurately categorized according to industry standards.
Freight class is the defining factor in how much your less-than-truckload (LTL) freight costs. The lower your freight class, the more affordable it is. But how does cargo get classified? Primarily, it’s determined by its density, but factors like liability, handling, and stowing also impact the price you pay to move your goods.
To calculate freight density, divide your total shipment’s weight by its dimensions. This will give you the pounds per cubic foot or freight class. To keep your freight costs low, ensure your items are as compact as possible and have transparent load-bearing surfaces. This will help prevent your load from taking up more space than necessary, which can increase class and cost.
Weight
For shippers that utilize pallet freight, it is crucial to understand how carriers determine rates. They can be charged based on their dimensional weight, a theoretical number for disproportionate sizes and weights (like a pallet of Ping-Pong balls taking up the same space as a set of dumbbells).
When calculating a shipment’s density and stability, carriers may also use factors like the packaging’s thickness and fasteners. In general, more compact and tightly packed packaging tends to have a higher density and lower stability rating, which could result in lower shipping costs.
Pallet pricing offers a simplified way to calculate rates, making it easier for shippers and carriers to manage costs. However, the lack of flexibility in this method can lead to invoice discrepancies, shipment delays, and claims issues. Moreover, it can be challenging to calculate the actual weight of a pallet of goods, which makes it difficult to get an accurate freight quote. However, proper packing techniques can help minimize this issue and improve efficiency.
Distance
The longer your shipment has to travel, the more it will cost. This is because carriers must spend more time and fuel getting your pallets from point A to point B. Furthermore, if your pallets have to go overseas, this will also cost more as you incur extra customs charges and miles on vehicles.
The size of your pallets will also impact your shipping costs. If you use oversized, bulky pallets that are difficult to stack, then this will mean that your goods will take up more space, and therefore, the price of your freight will increase.
Similarly, correctly packing your goods on pallets will help lower your shipping rates as this condenses your products and falls into a cheaper freight class. It is also worth noting that consolidating multiple orders into one pallet might be more cost-effective if you have multiple orders going to the same place. This will save transport costs and reduce the risk of damage to individual packages in transit.
Packaging
The type of packaging you use for your shipment plays a crucial role in its final cost. A well-designed package can save you money by reducing shipping costs and enabling your customers to quickly identify the products they buy. It can also help you increase your profit margins by reducing the costs associated with theft and spoilage.
The packaging material used depends partly on the nature of the product. For example, grains like sugar, cement, and food items like biscuits are usually packed in gunny or jute bags, while liquid products such as oils and ghee are typically stored in metallic jars or glass bottles. The package is also designed to be attractive and appealing to the buyer.
In addition to the freight class, packaging can affect your shipping costs. A pallet’s dimensions and weight are essential in determining the shipping rate, as are the number of pallets per shipment and the distance it needs to travel. To calculate your pallet shipment’s density, divide its weight in pounds by its total cubic feet.
Consolidation
During peak freight shipping seasons, such as spring and summer for fresh produce and November and December for holiday orders, truck space becomes more valuable, driving up rates. To mitigate this rate spike, shippers should look to consolidate their shipments with more reliable carriers or seek a third-party logistics provider offering carrier consolidation programs.
Consolidation also involves more brilliant packing strategies, which can reduce dunnage and give more space utilization in the back of a trailer. This, in turn, translates into lower overall freight costs.
A flat-rate pallet pricing system can help your business save money by guaranteeing accurate freight invoices from your carrier. Using this method, your page can calculate the total cubic space of your shipment, eliminating the need for freight classes and weighing.
Finally, a palletized load minimizes the risk of damage to single packages in transit. This can be especially important for temperature-sensitive products that may be spoiled in uncontrolled warehouses. It also helps protect workers in warehousing and distribution centers by keeping them safe from falling goods or irregular edges that could cause injuries.