What Factors Affect Transportation Rates? A Closer Look

Believe it or not, transportation rates have recently increased by 14% year over year.

Of course, transport costs will vary from state to state and business to business for a number of reasons. Yet good, cost-efficient transportation is critical to the long-term health and strength of your business.

What are the factors that will impact your total transportation cost?

Let’s take a look.

Type of Transportation

Depending upon where you’re delivering your goods and how quickly you need them to be there, you could end up paying extra money for expensive transportation. Air transport, for example, tends to be the most expensive, followed by boats, trains, and autos.

You may be required to use more expensive types of transport if you’re shipping goods overseas. However, it may be possible to cut transportation costs by changing your transportation type.

For example, you may want to have messengers carry out local deliveries on bikes. This can really help to cut down on what your business spends on fuel. In some cases, however, there may not be a way around a more expensive mode of transport.

Distance and Frequency

When it comes to moving goods, you’ll pay more if your vehicle is covering more distance or if you’re transporting goods more often. The current price of fuel costs will make traveling longer distances even more expensive. All of these should factor into your calculating storage and transport rates.

Product Type

The type of goods you’re shipping will also play a role in your total cost. For example, you may have products that require refrigeration or extra care when handling.

Some also require extra equipment for transport, such as forklifts or pallets for stacking. Other products, such as jewelry or flatware, may come with a higher liability if something goes wrong. If you’re doing the shipping you’ll need to take the cost of insurance into account when making your budget.

Market Factors

Every time period comes with unique market characteristics that you need to take into account when shipping. For example, there may be government regulations or weight requirements that you’ve got to comply with. Or you may want to consider traffic imbalances or changing costs at different seasons.

It’s also important to consider what’s going on with your competition. Will you be able to keep the costs down for your consumer if you use certain types of transportation? Will they be able to go somewhere else for a better price?

Urgency often comes into play with the market. Some clients, for example, could be willing to pay a bit more for service if they want something right away. You’ll need to know your customer as well as the current climate.

Calculating Your Transportation Rates

Transportation rates are an important part of your overall cost of doing business. You’ll want to think critically about the type of transportation you’re using, as well as all of the factors in the market. With some careful planning, you could have an efficiently running business in no time.

Don’t stop getting smart about your business and lifestyle now. For more great advice, read our blog today.