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8 Factors That Go Into Your LTL Freight Rates

Less Than Truckload (LTL) freight shipping refers to the consignment that doesn’t demand the use of a full truck. Instead, multiple shipments are being transported in one single truck in order to reduce the costs. For LTL, multiple shipments with different bill of lading from different owners are put into one trailer and shipped towards their intended delivery destinations. Before coming to the determinants for cost of LTL, Ianis Cargo welcomes you to access our lowest possible freight quotes if you have visited us looking for reliable LTL freight shipping. We work relentlessly on reducing the freight rates despite the influential factors. Because we are handling a plethora of shipments in a single day and operates without any middlemen, the rates would be much lower you expect as opposed to other transportation logistics companies in Romania. There are no hidden rates and the absence of intermediary make us the most reliable among the top freight and logistics services in Romania. So, get started from Ianis Cargo, to make your LTL shipment needs fulfilled.  

Coming back to LTL shipment, as a shipper you want to make the most out of your payment. While you receive a quote for an LTL shipment, you are paying for it right from the beginning. Evidently, the shipment rate affects your budget estimates pertaining to freight. Therefore, it would be ideal to understand what really affects your freight cost and the reasons why shipping and transportation service companies charge you with the rates for the haulage and delivery of goods. Here we take a closer look.  

Weight of the Shipment 

The first and foremost determinant of freight quote is the shipment weight. As per the standard rule, for a shipment to be qualified as LTL freight, it should weigh between 150 and 20000 pounds. However, rather than paying less on a lighter shipment in LTL, you will get a low freight quote for shipment with more weight per hundred pounds. This is also referred to as ‘weight break’ or weight threshold’. Therefore, more the weight of the shipment, less will be the LTL freight quote rate per hundred pounds. In fact, such a price arrangement is made to protect the interests of haulers too because lighter orders take a toll on the carriers compared to the haulage of heavy items.  Also note that, different shipping companies offer different weight breaks. While you receive the LTL freight rate estimates, weight breaks offered by each carrier will get reflected on it. 

Dimensions 

LTL freight shipment quote takes in to consideration the space a package occupies when it is loaded on to a trailer. As LTL shipments carry multiple freights as well, it becomes imperative for the carrier company to charge your freight based on the space it consumes inside the truck. In addition to this, they will usually assess an order’s transportation difficulty in terms of dimensions. For instance, the carrier company verifies if your freight can be stacked and stowed by the side of other pallets and packages without hassle. That implies orders/packages that don’t manage well with others are charged a bit more than others that go perfectly into the trailer along with other LTL freight. Also, make sure you choose the measurement of longest sides of package including any protruded sides and overhanging while calculating the dimensions of the shipment. 

Density 

Another factor that decides the freight quotes is the density of the shipment. Your shipment’s density is calculated based on the dimensions and weight. It is arrived by dividing the weight by the volume (dimensions) of the shipments. It should also be provided on the bill of lading. In case your LTL shipment is on a pallet, make sure that the pallet’s dimensions are used instead of the package, the combined height of both the package and pallet and the total weight of shipment are used. Once the density is calculated, another factor influencing your LTL freight quote rate is determined- freight class. As discussed, a while ago, if the density is higher, lower will be the freight quote. Since density is more, it will fall into the lower freight class category and hence the price reduction. Apparently, there is one more thing that carrier prefers is that if a freight takes up less space in their truck, they can offer to haul more items within the same truck which optimizes their return on investment as well. In other words, for shippers, it would encourage them to ship small but heavy items at a much lower rate!  

Freight Class 

Freight classification has been a major factor determining the freight cost. As explained above, weight and density are the two major components that decides the freight class. The other factors that go into determining freight class include packaging, stowing capability, value of the items, liability and special handling requirements. Lower freight class implies that your items are dense and the chances for damage are less likely and also helps easy handling. Hence your LTL freight quote would be low. While, higher class denotes that the freight is lighter, higher the freight class, the more would be the rate. Determining the freight class takes in to account a plethora of factors and the liability is one key factor that takes into account the likelihood of goods getting damaged during haulage. 

Pickup and delivery destination  

Apparently, without doubt, your freight quote would be as high as the distance it covers. Infact, your shipping service provider has to consider the cost of resources utilised for the delivery on time such as driver’s wages, equipment expenses and so forth. In addition to this, if your shipment is towards a remote location with limited access, the quote rate will be higher depending upon the level of difficulty in delivery. Above all, LTL service carriers are intended to operate within a specific geographic region. In case the delivery area is outside this specific region, it gets handed over to another carrier for last mile delivery which is known as interlining and adds to the cost of LTL freight shipment. 

Absolute Minimum Charge 

The LTL shipment is always offered at a minimum price which is referred to as absolute minimum charge (AMC). A carrier cannot operate below the AMC because carrier companies incur huge costs compared to heavier shipment. And hence, regardless of the weight or density, the load or the distance covered for shipping the minimum charge gets included in your LTL freight rates. But shippers should realize that the chances of adding more products at the same rate is also possible. This is where minimum order quantities come into play. Having a minimum order quantity with the customers can help shipper optimise the cost expended on AMC. 

Accessorial and Surcharges 

Accessorial charges relate to the additional services provided by the carrier other than the dock to dock or business to business collection and delivery functions. Typical examples of accessorial charges are  

  • Lift gate service 
  • Pickup and delivery from residence 
  • Limited access locations 
  • Long-haul fees 
  • Special equipment needs 
  • Trailer requirements 

Also, fuel surcharge fee is also included in the accessorial charges and adds up to your LTL freight quotes usually to cover the expenses required to haul your freight from the point of origin to the point of destination. These additional costs incurred are included in the shippers’ bill.  

Negotiated Rates 

The basis for arriving at weight breaks freight estimates and accessorial rates vests with carrier companies. As a result, the quotes vary with the service provider you rely on. However, it is not a dead end, if you have a clear grasp on our freight data, it is always possible to work with the carrier for receiving a reasonable tariff according to the various shipping lanes depending how easily your goods gets transported through the route specified. Each shipping lanes has an assigned rate for a particular shipping. Route/delivery difficulty assumes great significance while negotiating with your carriers. This certainly would help shippers to look for a rewarding lane that a difficult one which further helps them in receiving an attractive freight rate which is easy on their pockets. 

LTL shipments service from Ianis Cargo 

Meet all your shipping needs at the leading logistics service providers in Romania– Ianis Cargo. You get the lowest price quotes in LTL freight shipping segment. We keep your goods safe, provides tracking status and offer timely delivery, electronic POD and many more for ensuring last mile delivery solutions. Also, our courier service, Ianis Courier has also taken off from the last quarter of this year and on its way to become the reliable courier and shipping service in Romania through our limitless support for prompt delivery of your parcels.  

Keep your comments posted below. Let us know your concerns in shipping to help you offer feasible solutions.