How do you calculate trucking freight rates?


Quick Answer

Trucking freight rates are calculated according to carrier expenses and revenue projections, type of freight being handled and freight classification. Carriers expect to make a profit to move freight, thus charging more for freight than just expenses. Also, more specialized types of freight, including refrigerated and flatbed, charge a higher freight rate. The National Motor Freight Classification system also increases freight rate for low-density and high-value freight.

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Full Answer

A freight carrier computes a final cost per mile for company expenses. Fixed costs include insurance, permits and company infrastructure. These are added to variable costs such as fuel, vehicle maintenance and taxes. Also added in is the single largest expense, a driver's salary. The resulting combined expense is divided by the projected miles the company's drivers operate, resulting in the base expense per mile to haul any freight. Added to this is a percentage that the company determines makes it profitable without being significantly undercut by competing carriers. This creates the company-side cost per mile of freight.

Additionally, carriers charge depending on the type of freight being hauled. Van freight, consisting of dry foods and consumer items, command the lowest general rate. Specialized freight increases the rate per mile.

The NMFC provides 18 classes of freight ranging from Class 50 to Class 500. Generally, the lower the class number, the cheaper the freight rate. The freight classification depends on factors such as dimensions, density, ease of handling, value and liability.

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