A CEO's Guide to Calculating Freight Costs

Freight costs are a necessary part of doing business, and calculating them correctly can be the difference between success and failure. It is important for CEOs to understand how to calculate freight costs so they can make informed decisions and ensure their businesses are able to remain competitive in the market. Let's take a look at how to calculate freight costs.

Freight Classifications

The first step in calculating freight costs is understanding the different classifications used by the shipping industry. Freight is typically classified according to three categories: standard freight, priority freight, and special freight. Each type of classification has its own associated weight and size restrictions, as well as varying levels of service offered. The cost of shipping will depend on which type of classification you choose, so it's important to be aware of these distinctions when calculating your total cost.

Determining Shipping Weight And Volume

Once you have determined which classification you need, the next step is to determine the weight and volume of your shipment. This information will be used by your shipper when creating an estimate for your shipment costs. The most accurate way to measure your shipment’s weight is with a digital scale. The volume on the other hand is calculated by multiplying the measurements of the width, length, and height of the shipment. Even if you have an approximate idea of the weight and volume, it’s worth taking time to get exact measurements before calculating your total shipping cost. If you are shipping regularly you might be better off purchasing a digital scale that can also determine the volume with overhead sensors.

Calculating Your Costs

Once you know the classification, weight, and volume of your shipment, you can begin calculating your total shipping cost. To do this, you'll need access to a rate calculator that takes into account fuel surcharges, discounts for large shipments, etc., and allows you to compare rates from multiple carriers so that you can find the best deal for your needs. You may also want to factor in additional fees such as storage or delivery charges when calculating your total cost.

Calculating freight costs may seem daunting at first glance but with a little guidance, it can become much easier! By understanding freight classifications, determining shipping weights accurately, and using rate calculators that take into account all fees associated with shipping goods internationally or domestically you can easily calculate your own freight costs with confidence!

An experienced freight forwarder like Harry Heinsen & Co, can in most cases provide a simplified rate that encompasses most variables in a single number to be calculated with your weight and volume. The guidance of a professional can be invaluable in ensuring a safe, efficient, and reliable supply chain for your business.

With this knowledge in hand, you will be able to make more informed decisions about your operations and remain competitive in today’s market.

Happy Shipping!