What factors go into truck shipping costs?
Controlling transportation costs is an important part of running a profitable business. And if you rely on truck shipping to get freight to its destination, you know how often those rates can change. Knowing what goes into Full Load Cargo (FTL) prices can help you manage costs more effectively and prepare you for better conversations with your transport partner.
The factors that affect full load rates fall into two broad categories: the market and the specific details of your shipment. And each category comes with its own mix of variables.
The impact of the market on FTL pricing
Supply and demand have a big impact on truck loading rates. But as supply and demand are influenced by multiple complex factors – including consumer spending patterns, manufacturing output, GDP growth and seasonal freight trends on the demand side and equipment levels and driver availability on the supply side – the cost of booking an expedition can rise and fall as quickly as trailers fill and empty. This is why spot rates can fluctuate daily (and sometimes even hourly). The more demand increases, the more tariffs will increase. Learn more about the complete truck market.
Another factor in the price of full truck loads is fuel. Since fuel prices vary based on season, demand, and location, carriers typically use a base rate and then charge a fuel surcharge if the base rate does not cover the actual cost. Talk to your carrier about when surcharges apply so you know what to expect.
How Shipping Details Affect Truck Loading Rates
Since truck shipments involve the exclusive use of a trailer, factors such as density and freight class do not determine the price. Instead, the source and destination markets, how far it goes, when you need it to pick up and deliver, the specific equipment required, and any special services are the details that matter when obtaining a quote.
The origin and destination of your shipment is important for two reasons: total mileage and the lane in which the freight is traveling. Total mileage affects fuel consumption and the time the driver spends on the road. The route has an impact on the ability levels. So while longer distances may result in higher rates to compensate for fuel and driver time, you may get a better price if your shipment is delivered to a location that needs more equipment. However, it also means that fares can increase in areas where it is more difficult to get return freight.
The time between pickup and delivery may influence your quote. If a driver does not have enough duty hours to meet a deadline, your shipment may require solutions such as team drivers or urgent service. The delivery time you provide can also affect the price – the more time a truckload broker has to shop and negotiate on your behalf, the more likely they are to find the capacity to move your freight.
Specialty equipment like refrigerated and flatbed trailers typically cost more than traditional dry vans due to limited availability and the additional driver experience required to operate them. And, if it is an oversized load (shipments taller or wider than 8.5 feet), there may be additional costs like loading permits and fuel for escort vehicles. Be sure to communicate the specific size and handling needs of your cargo to ensure the right equipment is booked and your quote is accurate.
Ship dangerous goods? Need the item delivered inside a residence? Exceed the free time allocated to you when loading or unloading? All of these circumstances will result in an assessment charge on your freight bill. And while these fees are generally predictable and don’t apply to all loads, understanding what they are and when they apply can ensure you’re prepared for the amount you’ll pay.
Suggested reading: The impact of driver detention
Discuss truck shipping costs with your carrier
When it comes to pricing, you have two options: play in the market through spot rates or negotiate contract prices. Both have their advantages (read spot rates and contract rates here for more), but if your freight needs are consistent, contract rates can usually offer savings in the long run. Not only do they help secure capacity and price consistency, but they also help you avoid downstream issues like stockouts and loss / damage – issues that can arise if you always prioritize costs. lowest transport costs. Download our white paper on Hidden Costs of Shipping for more information.
To start negotiating rates, you will need to go through a tendering process with the carriers you are considering. This will help you get accurate pricing and ensure that you partner with an operator who can meet your current needs and adapt to you as your business grows or changes. Once you’ve onboarded a transportation provider, you can continue to work with them to find opportunities to reduce costs and create efficiencies in your supply chain.
Ready to discuss your freight needs?
ArcBest Truck Loading Experts are here to help you navigate the market, get proper pricing, and make adjustments as your needs change. Learn more about our full load solution or log into your arcb.com account for an instant full load quote.