Freight Calculation: Understand How Fleet Pricing is Done

Expenditure on the payment of transport services jeopardizes a large part of the business budget and this is not a secret. The question is what variables make up the freight calculation and how the price formation passed on by the carriers is given.

In today’s article, we will clarify this subject better to send mail to foreign countries (ส่ง จดหมาย ไป ต่าง ประเทศ, which is the term in Thai) and – despite differences in methods and factors considered by each partner – present the main points that influence value. Read on to learn more!

What variables are considered in the freight calculation?

The method used varies among carriers, mainly due to the differences in costs generated by operations. However, in general, it can be stated that the main variables are:

Freight weight

When referring to the weight of a load, gross weight (kg) and cubed weight (m3) are used as reference. The charge is based on the higher value between the two. The aim is to make a fairer charge – avoiding, for example, that very large but light loads are low and take up a lot of space in the vehicle, preventing more goods from being sent on the same transport (causing loss).

Shipping value

It is charged based on a percentage on the invoice amount. It can be noticed that loads that have high added value, for example, generate a charge for a more expensive freight.

Freight per kilometer wheeled

Consider the distance between the point of origin and the destination of the load. Therefore, customers located in more distant regions suffer a higher freight charge.

After all, how is the pricing done?

The carrier also needs to cover the costs of its activities and still generate profit. Thus, issues such as administrative expenses, fleet maintenance and other expenditures should be included in the freight calculation.