Freight Shipping Rates in the USA: What to Know

One of the hardest things to cater in the trucking industry is to get a reliable freight shipping quote. It’s not just about finding the lowest number, it’s about understanding what it includes and how it is affected by the market changes. 

Freight shipping cost is rather dramatically driven by fuel price fluctuations to supply chain bottlenecks. There’s a lot to be considered when businesses are relying on affordable logistics. Trucking pricing is not focused only on one or two factors, but it’s focused on timing, demand, capacity, and even economic changes. One week you are within your budget, the next thing you are overpaying with subtle changes in the trend. 

In this blog, we have highlighted how technology affects the freight shipping rates and the factors affecting them. 

How technology is driving down (or up) freight shipping costs

Depending on how it is applied, technology has the potential to either drastically reduce freight shipping costs or subtly increase them. Let’s examine all sides of the IT debate using real-world examples that shippers and brokers are all too familiar with.

Automation to lower costs

Think about a freight broker managing 30 loads. Manual dispatching, updates, and chasing PODs is a hassle for him. But by implementing the right set of tools, like a transportation management software, they can update loads automatically with a real-time tracker. Rate confirmations and invoice automation are only a few clicks away.

With automation, you can save at least 5-10 working hours, accelerate the cash flow, and reduce errors and overhead costs. 

Real-time data for smarter decisions 

What if a manager is quoting a lane from Dallas to Chicago? Pulling the static rate from a manual spreadsheet is not going to cover the real-time data. However, using a smart TMS, you get real-time shipping freight rates from the market. You can identify lane-specific averages, carrier capacity, and regional rate volatility.

This way, you have ample time to view more accurate freight shipping quotes, put in competitive pricing for protecting margins, and retain your customers’ trust. 

Focusing on hidden costs 

On a regular business day, the fleet manager is juggling with load boards, document portals, payment app, and none of them are connected. Manually addressing each task is workable as long as you have one or two fleets to worry about.

But for a medium to large-sized company, you cannot spend hours wasting time on copy-pasting the data, right? When you do not adapt to new advanced tools, productivity levels are reduced immensely, you get slower response times, and carriers easily become frustrated. 

Not only this, but you miss detention claims and late billings are no one’s favorite. Therefore, it is important to integrate different tools using a reliable TMS that offers a single dashboard view for all use cases.

12 Key factors that impact freight shipping costs in the USA

Although this has been a beneficial development for the transportation business, it has also posed several new challenges for most online retailers. The increased demand for online shopping caused a sudden boost in shipping costs, adding to the already existing burden on the global supply chain. 

To help logistics and transportation companies estimate shipping costs, let’s explore some key factors that influence your freight shipping costs. 

1. Freight method

It’s crucial to realize that the freight service you select will dictate the cost of your service, while determining which one is appropriate for your company. The following are the four typical cargo types:

There are benefits and drawbacks to each freight mode, so you should base your decision on your priorities and expectations. The two most popular modes of freight transportation are air and water.

Air travel is more expensive, even though it provides a quicker answer. Sea transportation, on the other hand, is ideal for moving large, heavy items, but it will take longer to get there.

2. The freight class

Loads that fall into a lower class typically have a higher density, are easier to handle, and are less prone to damage. Conversely, loads that are lighter and more delicate are typically assigned to a higher class, which results in higher shipping costs. Additionally, higher-class freight often takes up more space and requires more careful handling.

The standard pricing measurement and categorization used by the shipping industry is your freight class. It was developed by the National Motor Freight Traffic Association and serves as a platform for all LTL shipping companies and carriers. This method streamlines and increases the productivity of negotiations and logistics.

Freight class is determined by these four factors:

• Handling ease
• Density
• Accountability
• The ability to store

3. Accessorial fees

Your shipping charges will also include any additional expenses if your shipment calls for specific driver instructions, such as those for private gate entrances, redelivery requests, or home deliveries. Dock-to-dock shipping is the ideal method for commercial shipping.

Our transporters find it easier as a result, and any variation may cause inconvenience. If problems occur, your final bill may include an accessory charge. Be sure to ask your carrier service or 3PL what they think an assessorial is.

4. Weight and Dimensions 

The cost of shipping a truckload of goods is typically calculated using a per-mile rate, known as a per-hundred-weight charge, and fuel costs. This calculation is straightforward. 

However, if you are shipping less than a truckload (LTL), the cost is based on the dimensions and weight of the freight. Weight rates are designed to be cheaper per 100 pounds for heavier loads. 

Freight density, which is determined by the freight’s weight and cubic feet, is the next factor that affects the shipping cost.

5. Freight Density 

In order to calculate the freight costs, it is important to have knowledge of the freight density. Freight density can be determined by dividing the total cubic feet of the shipment by its total weight. 

If the shipment is on a pallet, use the pallet’s dimensions to calculate the freight density, and make sure to include the weight of the pallet in the total shipment weight. It is recommended to measure the longest side of the shipment, including any overhangs beyond the pallet.

6. Freight Type 

The type of freight transported from one place to another and the type of trailer required to transport the freight also significantly impact the freight shipping costs. Some of the freight types include: 

• Dry van freight: This is the most commonly used trailer for shipping in the US, which does not have temperature control. 
• Reefer freight: Refrigerated freight requires temperature-controlled trailers to keep the goods at the appropriate temperature. 
• Flatbed freight: Flatbed trailers are used for large or bulky cargo that cannot fit inside a dry van and for goods that do not require protection from the weather, such as machinery or lumber. 

6. Shipment destination 

Have you ever wondered what the freight shipping costs would be from state to state? Generally, the rule of thumb is that the greater the distance between the pick-up point and the final destination, the higher the freight shipping cost.

Regional carriers usually operate within a specific geographical area, and when they transport goods beyond their region, they often have to transfer them to another carrier that can deliver to the destination zip code.

This transfer process, known as interlining, can eliminate any discounts that might be available for shipping within a specific area, and additional costs may also be incurred.

7. Traveling distance 

The more your fleet covers the distance on the road, the higher the cost. Whether items are from city to city or across the states, the mileage affects the pricing. 

The company will figure in and account for the cost of the manpower and gasoline needed to bring your shipment to its destination. To get the greatest bargain, it’s still crucial to compare rates and shop around.

8. Fuel costs

Shipping rates increase in regions where fuel costs, especially diesel, are higher due to taxes, market factors, or other regional influences. In instances where fuel prices are unpredictable during shipment, carriers may raise their rates to protect themselves against abrupt fuel price increases.

To estimate these expenses, some truckers use fuel surcharge calculators, which are typically included in shipping costs. Fuel costs can be reduced if companies adopt effective fuel management strategies and increase fuel efficiency, like the use of fuel cards. 

10. Freight demand 

When the availability of truck space is scarce, carriers may charge higher prices for that space. Similarly, when shipping activity slows down, carriers may lower their costs to attract more customers.

Shipping costs are influenced by the demand for shipping services and the number of carriers operating in a particular area. Moreover, shipping rates may differ among various companies.

Besides, the carriers’ and 3PL businesses’ accessibility in your area can also influence the freight shipping cost.

11. Weather 

Whether it is at the starting point or the final destination, unfavorable weather conditions can cause significant delays and complications with an order. 

Retailers are still charged by ports and transportation centers even when there are delays caused by unforeseen circumstances, which can affect customer satisfaction. 

12. Disruptions

Whether it’s due to weather strikes, shortages, or global pandemics, any of these disruptions can affect supply chains, which in turn affect transportation needs and freight shipping costs.

These inefficiencies lead to the need for redirecting deliveries, adjusting shipping needs, and additional challenges for fulfillment centers that are striving to fulfill orders. These disconnections pose difficulties for budgeting and result in higher freight rates at the last minute.

Loadstop got your fleet back!

The freight industry isn’t what it used to be five years ago. Market fluctuations, tighter margins, and changing expectations from customers mean that you need to adopt new technologies.

The good news? You do not need to do this alone.

Quoting lanes, managing loads, or even streamlining the fleets, you can do it all using LoadStop. As an advanced TMS, it helps you dispatch loads faster with full-time visibility. From real-time insights to automated workflow, and keep track of your drivers, compliance, carriers, and brokers can equally benefit from it. Now is the time to take control of the freight shopping cost with fast automation.