Many businesses find that LTL shipping is a beneficial way of transporting smaller shipments that may not require a full trailer but are too big to be sent as a parcel. However, to determine if this is the most cost-effective method for getting your goods to their destination, you must understand how freight rates are calculated.

Several different factors influence the cost of an LTL shipment, whereas full truckloads generally have a set price. Hoffman Transit Co offers a variety of nationwide shipping options from their home base in Gresham, WI. To help customers better understand where their rates come from, the company explains the guidelines used to establish them below.

5 Common Factors Used to Determine the Cost of Freight Shipments

1. Distance

In most circumstances, the farther the company is hauling your shipment, the higher the price will be by per-hundred weight. If a freight carrier only travels within particular regions, it may be necessary to transfer the load to another shipper to complete the job, which can drive rates up.

2. Type of Shipment

The type of items you’re shipping is a big consideration for carriers when calculating costs. There is a system in place that evaluates how valuable, fragile, and easy to handle the goods are before placing them into a certain class. The easier it is to damage the freight, the more it will cost to ship it.

3. Weight & Density

Your freight will be rated on a specific weight group and category. Density also factors in, so all packaging and pallets should be included in the dimensions and weight of the shipment.

4. Surcharges & Accessorials

Surcharges and accessorial charges refer to any extra services you might request that go above and beyond the company’s standard pickup and delivery agreement. Fees are typically charged for things like fuel, locations that are difficult to access, inside pickups and deliveries, and lift gate service.

5. Minimums & Base Rates

Each carrier will have a pre-determined base rate that depends on freight categorization and is quoted in weight. In addition, companies have a minimum amount they can be expected to charge to haul any shipment.

Knowing how freight rates are estimated will give you the ability to figure out the best value for your shipping requirements. Contact Hoffman Transit Co at (715) 787-3350 or visit their website for more information on all services available.