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What Costs are Included in a Freight Quote?

Nov 15, 2010

ship-calc.jpgWhen you take a look at an international freight quote you might think the only thing not included is the kitchen sink – unless of course you've got a load of plumbing supplies on its way abroad.  What costs are included in a freight quote?  The simple answer is that the freight quote covers every detail of shipping your international freight from point A to point B.  Let’s break down the costs so you’ll know what to expect.

It will also be helpful to explain how a freight quote is worked up.  Back in the day, some math whiz with an abacus was doing his thing in the back room to prepare shipping quotes, or it may have seemed.  Today, transportation brokers and forwarding agents use freight calculator software to input the details of the international freight shipment and produce a freight quote that leaves little room for error.  Here are the details.

The obvious costs are the volume of your international freight and distance it is going to travel.  But within this broad explanation are many details that affect this cost.  Will you choose an ocean cargo carrier, a trucking company, rail freight carrier or an air cargo carrier?  Each will affect your freight quote, with truck or rail generally being the most cost effective and air being the priciest, yet fastest.

Once you choose the mode of transport you have options, especially with rail and ocean.  The transportation brokers will determine the volume of your load and then suggest either a full container or containers to handle your cargo if you’ve got enough to completely fill them.  Most transporters use 20’ (approx. 20x8x8) and 40’ (40x8x8) dry containers and many also offer 40’cube containers that are 40x8x9.

Most shipments will not fill an entire container and are known as Ltl (less than truck) or Lcl (less than container) shipments.  If your load isn’t large enough to fill a container then transportation brokers will arrange shipment with Ltl carriers that palletize and consolidate your international freight with other shipments.  The volume and other details of your load will be plugged into the freight calculator and the freight forwarder will contract with ltl carriers to move your goods.  The volume or weight of your shipment may also be subject to a fuel surcharge that reflects the current fuel costs.  This surcharge will be tacked on to the freight quote.

The specific way your goods are priced, beyond volume, is determined by the freight class of your consignment.  Some goods are more expensive to ship than others.  The factors that determine the freight quote starts with the density of the load – a container of metal parts will be more costly to ship than a container of textiles, for example.  Additional criteria include the fragility of the products, special handling requirements, or the presence of hazardous materials.

Insurance is another cost included in your freight quote.  The carrier will accept limited liability but not nearly enough to cover the value of the goods.  Insuring your international freight can be handled through the transportation brokers that set up your shipment.  They will also work with you on the cost of permits and documentation and enter these into the freight calculator.

There are other variable costs which may be included in a freight quote.  Some of these are whether you will need the shipping company to pick up your international freight from you, whether warehousing will be required at any time, and the possibility that your shipment will need to be separated at any point into smaller loads and sent in different directions.  It sounds complex but the process is simplified by freight forwarders.  Many of them even feature a freight calculator on their website so you can explore the costs before you put your shipment of international freight together.