The basic freight rate will depend on the nature of the shipment. Tractors will cost more to ship than tulips – right? Well, sometimes. A tractor may be heavy but it is also dense, whereas a pallet of tulips might be light yet will take up a relatively large amount of space. It’s not just the weight that matters but also a weight equivalent known as the volumetric weight or dimensional weight, and these calculations vary by transport mode (in other words, air, ocean, road, and rail transportation) and trade lane.
To achieve a better freight rate for everyone, carriers typically consolidate heavy, dense cargo with lighter items and of course use appropriate pallets and packaging to safely stack and protect fragile cargo. For out-of-gauge items that won’t fit into a standard 20’ or 40’ container – for example a vast tractor wheel, a mining rig, the body of an aircraft, print machinery or big glass panels – a specific quote is always required.
Day in and day out, the basic freight rate is impacted by the state the industry as well as many regional and global economic factors. Just one example is the cost of fuel. Two years ago, extra fuel costs were adding about 20% to the overall basic rate; since then the cost of kerosene has tripled. In ocean freight transport, to compensate for the rising oil price, operating vessel companies are now using special fees called the Emergency Bunker Adjustment Factor (EBAF). Similarly, many air carriers are adding fuel surcharges.
Another thing to think about with the basic freight rate is a separate category of charges levied by third parties, such as customs clearance, airline handling, container freight station and other charges. At DHL Global Forwarding, we call these pass-throughs – we simply pass these charges through to our customers without adding any markup.