How freight rates are determined

Freight rates are the price at which cargo is transported from one location to another. Freight rates are determined by numerous factors. These factors include the mode of transport, the type of cargo, the weight of the cargo and the delivery distance. Read below for more about how freight rates are determined:


Different modes of transport charge different rates. There are four main modes of transport used for freight services; road, rail air and sea. Road is generally used for local and national deliveries. Rail, air and sea are most commonly used for international delivery, though, air freight can be used for faster domestic deliveries. The rates for air and sea freight is usually higher than road and rail freight.


The type of cargo plays a role in freight rates. Is the cargo loose, or is it containerised? Roll on, roll off cargo, liquid bulk and dry bulk are all examples of loose cargo. Containerised cargo is simply cargo transported by container. The rates will change depending on the type of cargo being transported as well as the amount transported.


The weight or volume of the freight is a factor in deciding the rates. Two different types of container loads can be discussed regarding the volume of freight; LCL and FCL. LCL is your best bet when you are not shipping a large amount of cargo while FCL is for full shipments. The price varies between the two and the rates may depend on your freight service provider and whether they can get discounted rates.


The distance of the delivery is a major factor in the rates of freight transport. Delivering freight locally will be much less expensive than delivering freight overseas. Though, short distance deliveries by plane will be more expensive than short distance deliveries by vehicle.