Understanding Freight Rates: How is Freight Rate Determined?

Jun

8

Understanding Freight Rates: How is Freight Rate Determined?

Published 8 Jun 2023

As a leading freight forwarder, Willship International recognises that one of the most commonly asked questions in our sector is, "How is the freight rate determined?" The answer is complex, with numerous crucial elements impacting the final price.

The first point to examine is the method of transportation. Each mode of transportation, whether by sea, air, train, or road, has its unique cost structure. Air freight is often the most expensive because of its speed and overall efficiency, although sea freight is sometimes more cost-effective for bigger, heavier goods.

The weight and volume of the items are also important considerations. Freight Forwarders frequently use a measurement known as "chargeable weight," which is determined from both the actual weight and the dimensions weight of the shipment. The bigger of the two is utilised as the charged weight, which affects the freight rate immediately.

Another important consideration is distance. Longer routes are often more expensive owing to greater fuel consumption and time required. Furthermore, if the destination is difficult to reach, the freight fee may rise to reflect the logistical challenges.

Changes in freight prices might also be caused by market demand and current fuel costs. Rates could also rise during particular busy seasons due to increased demand. Similarly, an increase in fuel prices might also result in increased freight charges.

Willship International's exceptional team of freight forwarders work hard to keep these prices as transparent as possible. Understanding how freight rates are established, aids in the development of better connections with clients, building a culture of trust and collaboration.

OUR TRACK RECORD

$1.4B

WORTH

Over $2 Billion worth of cargo is trusted to Willship to be shipped every year

< 0.1 %

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Extremely safe and proven process

125+

TRUSTED NETWORKS

Deep relationships with our trusted network of staff and contractors ensures that your goods arrive safely

Priority service every time

Award Winning Industry Leader

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WINNER

Best International Automotive Cargo Logistics Enterprise - 2021

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WINNER

Award for Innovation in End-to-End Freight Transport - 2021

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FINALIST

Freight Forwarder of the Year Award - 2018

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FINALIST

Young Achievement Award 2018 (Nick Proctor)

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FINALIST

Young Achievement Award 2018 (Mel Mather)

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FINALIST

Freight Forwarder of the Year Award - 2017

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FINALIST

Young Maritime Professional of the Year 2016