The Factors That Influence Freight Delivery Prices

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Anybody that has ever hired a trucking company to deliver goods and materials in the United States knows that prices can fluctuate wildly. This price fluctuation is not random by any means. Trucking companies consider many kinds of variables when working out what to charge potential clients.

The Factors That Influence Freight Delivery Prices

The price of sending and receiving goods has an obviously large impact on the ability of any company to make a profit on the goods that need to be moved. Logistics prices regularly impact the consumer prices of products and the value of raw materials. Planning ahead is incredibly important. Companies that fail to plan ahead for fluctuations in logistics prices are truly at the mercy of them. There are several factors that are considered proportionately important in the calculation of freight prices. Here is a very quick guide to these important factors.

Load to Truck Ratio

The load to truck ratio is a number calculated by trucking companies in their efforts to ascertain the relationship between supply and demand. In order to calculate this number, the total number of loads in an area needs to be divided by the number of trucks available to haul loads in the same area. Trucking companies rely upon getting their drivers to efficiently pick up loads on both legs of their journeys to make a profit. If they are delivering to an area with a favorable load to truck ratio (usually around 3:1), then they will need to charge their clients less because they can know with relative certainty that they will get a return load. If the load to truck ratio is poor (when there are more trucks than loads to take), then they will charge a premium delivery fee because of the likelihood that they will not contract their driver for a return load.

A great many factors influence load to truck ratios. Seasonal fluctuations in exports from an area, trade embargoes, energy shortages, or strike action all impact load to truck ratios on a local basis. Areas with no manufacturing industry typically have low load to truck ratios, while areas that contain factories and international ports typically have high ratios.

Type of Cargo

Some types of cargo require special trailers and additional driver training in order to transport safely. Toxic chemicals, for instance, can only be transported in special tanker trucks by drivers with hazard prevention training. This is naturally more expensive for a trucking company to provide. Oversized loads also incur additional costs. Some extreme loads require chase cars to travel alongside the truck carrying them – warning other vehicles not to approach or overtake. The more complex or dangerous a cargo is, the more you can expect to pay for shipping it.

Cargo Weight

The heavier a load is, the more fuel it will take to carry it. Extremely heavy cargo is much more expensive to convey across the land than light cargo. Road transport has a relatively steep increase in price according to weight. Rail and sea transport, on the other hand, is extremely efficient at accommodating heavy weights without causing a massive increase in price. For extremely heavy loads, rail transport is more fuel efficient.

Distance

The distance that a load has to be transported will drastically impact the price for its transportation. The longer a journey has to be, the more fuel a company will have to buy, the more man-hours will have to be funded, and the more wear there will be on commercial motor vehicles. Be prepared to pay large sums of money if you need to transport goods all the way across the United States of America. Some trucking companies specialize in providing drivers for long-distance journeys. Always consult with companies that specialize in delivering the kind of service that you need.

Fuel Price Fluctuations

Global fuel prices are extremely vulnerable to multiple factors that cause them to rise and fall. Even though the United States imports very little fuel from Russia or Ukraine, the ongoing conflict between the two nations has caused increases in fuel prices that will be passed on to trucking company clients. Conflict in the Middle East also regularly impacts fuel prices. Environmental disasters such as oil spills typically drive fuel prices up massively. Some trucking companies have started to try and move away from their dependence on the fossil fuel industry, slowly converting their fleets by purchasing electric vehicles. Even these companies will need to raise their prices if fuel becomes more costly, as there is a knock-on impact on electricity prices when this is the case.

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