Factors that Influence Freight Rates In India

Cost of Merchandise

Freight rates largely affect the cost of merchandise that is being transported from one place to another. Importers and exporters have to be oriented about the factors that can influence freight rates in India so they can formulate a better business plan. It is also crucial to be informed that freight rates are regulated by a certain organization that ensures every freight forwarded charges only accordingly. Nevertheless, there could be slight deviations which also are explainable on the part of the freight forwarder. Importers and exports may ask for freight quotes so they can evaluate the overall cost of every shipment. These reports can also help consolidate for better charges.

Fuel Charge

Fuel cost is the primary determinant of freight rates. To move commodities from one place to another, freight forwards needs to fuel up vehicles. Unfortunately, with the high fuel cost fluctuations, prospect freight rates have become difficult to calculate. Freight forwarders must cover the fuel expenses and the maintenance of their vehicles. Additionally, their charges should also swathe the salary of everybody in the company. Huge freight forwarders can still generate revenue even with a small profit margin per package. This is due to the accrued freight charges.

Weight of Merchandise

The weight of the merchandise is another major determinant of the charges that importers and exporters are bound to shell out. Before shipping, the merchandise will be weighed to calculate the accurate freight cost. Most shippers today post a guide on the approximate freight rate for various weight rates. By just visiting their websites, importers and exporters will know the amount they will have to bring out for the shipping. Logically, a heavier shipment means higher freight rates. It will take up more space in the vehicle, and this space should be paid for. Moreover, freight companies need to get the weight of the merchandise that will be transported to know if they had exceeded the limit already. For everybody’s knowledge, trucks, ships, and airplanes have a maximum capacity to follow strictly. Going above their capacity can be dangerous. If the regulatory body finds out they are deviating from the rules, the freight forwarding company might be suspended and required to pay a huge penalty. They must also follow the approved freight rates in India to secure fair competition.

Size of Merchandise

The size of the merchandise or cargo also influences the rates that importers and importers should pay. Some things may need more space, so some freight forwarding companies include the size in the calculation. Freight forwarding companies normally provide a guide. If merchandise or cargo exceeds the maximum size, the client may be asked to divide it. Consequently, they will have to pay for two separate cargos. The distance from point A to point B is another vital factor. Freight forwarding companies will calculate the cost of transporting cargos from one place to another and use its basis for freight charges. Logically, those that will be delivered to farther destinations will use up more fuel. Thus, the transportation rates are higher. In some cases, deliveries that will cover short distances are pricey because the vehicle will have to travel further, including lesser cargo. Freight rates in India may vary due to various conditions.

Delivery Time

The time of arrival is another dynamic to be taken into consideration. Commodities that will not expire or perish quickly can be transported using ships. It will take days before cargos reach their destination if they travel by sea (still depending on the distance, of course). Several freight forwarding companies use enormous ships, which means they can transport more cargo on one trip. They can make the most out of the fuel expenses, handling, and checking, so sea freight charges are often cheaper. But there are restrictions, though. There is a list of goods that should not be stored for a long time. If the cargo needs to be transported right away, clients must opt for air transport. Some types of commodities require being stored in certain conditions during transportation. Perishable goods can be preserved for a certain period of time, given that it will be stored in controlled temperatures. The freight rates of these types of commodities are higher because the freight forwarding companies must utilize refrigerators.

Mode of Shipment

Air shipping prices iThe International Air Transport Association regulates air shipping price side Official Rates Policy for air shippers to follow while considering The Air Cargo Tariff. Air Freight Costs are calculated based on the consultation between International Air Transport Association and Local Contract Price Committees. These are inclined to the inter-governmental pact of various countries. Any air shipping company that wishes to change its prices must get authorization from the International Air Transport Association and the government to which it resides. A set of requirements will have to file before getting approval.

People who wish to transport a certain kind of merchandise must know the things that influence the freight charges in India. It is best to be oriented about these things, especially if they are engaged in a business transporting commodities around and outside the country. Integrating with reputable freight forwarding companies can be an advantage, for it can provide a higher level of customer confidence and better pricing. Furthermore, they can be assured that their cargo will be handled correctly. One such software that allows you to integrate your website with upto 5 courier companies (Fedex, Bluedart, FirstFlight, Aramex, Delhivery) simultaneously and help you process your orders automatically is Shiprocket.


Saahil Goel

Founder & CEO at Shiprocket

Saahil Goel is Co-Founder and CEO of Shiprocket, a data-driven logistics aggregation platform that drives efficiency in India’s eCommerce logistics by connecting online retailers with logistics prov ... Read more

Saahil Goel

CEO and Co-Founder, KartRocket.com

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