Types of Shipping Costs
When shipping a large or heavy item, the cost of shipping can be staggering. It’s important to do your research and find the best way to ship your item to avoid spending too much. In this blog post, we’ll discuss the different ways to ship something and how to find the best deal for you. We’ll also provide some tips on packing your item to avoid getting damaged in transit.
In this article, we will learn about the pros and cons of several shipping methods and their associated cost structures. Of course, each shipper provides its variation on these price structures — but for now, let’s focus on the main factors that determine prices for a given shipment from one country to another.
The world of business is changing. New types of companies are emerging, and the magic of digital transactions is replacing old-fashioned trucking. Sharing economy companies like Uber and Airbnb have exploded in size, becoming multi-billion dollar corporations without any physical assets to their name.
The following list shows you the three different cost structures, with a simple example for each one:
1. Sea Port Cost Model
If your shipment is carried by boat, it is transported via a seaport. Let’s take as an example a 20ft container which can be loaded with ten pallets of boxes weighing 500 kilograms each. Most seaports charge based upon either teu or lcu (teu = twenty-foot equivalent unit; lcu = forty-foot equivalent unit). The price varies for each port but usually round these values are charged per container.
2. Airport Cost Model
If your shipment is carried by plane, it is transported via an airport. Let’s take as an example a 20ft container which can be loaded with 10 pallets of boxes weighing 500 kilograms each. As you know, larger cargo planes are more expensive to fly than smaller ones. For that reason, prices vary depending upon the size of your cargo (and thus its weight). Most airports charge based upon the CIF value of the pallets multiplied by their capacity — usually $15 per kg for international shipments.
3. Road Freight Transport Cost Model
If your shipment is carried by road transport, it is transported via a road freight provider. Let’s take as an example a 20ft container which can be loaded with 10 pallets of boxes weighing 500 kilograms each. Most road freight providers charge based upon the weight of your cargo, but different trucking companies use different scales. For example, some providers have fixed rates for common weights (i.e., 1 tonne), whereas others have special pricing structures depending upon the actual weight of your shipment.
This was just an introduction to the subject — in future articles, I will detail these factors and provide you with concrete number examples for several industries that are carried by sea or air transports.
The supplier determines the shipping cost of a product and varies accordingly. Generally, it is more expensive to deliver goods over great distances than to deliver them across the street. The following information on shipping costs might help you to determine which suppliers can offer you better prices.
Cost of transport per mile:
The cost of transport per mile for each product category is as follows:
- Sewing needles: 17 cents
- Yarn: 26 cents
- Quilting fabric: 36 cents
- Toy cars: 37 cents
- Tinsel Christmas garland (per meter): 38 cents
- Oven mitts (pair): 39 cents
- Plush toys: 40 cents
Customers often have to pay more for shipping than the actual product costs in today’s economy. This is especially true with online retailers who have to pay huge monthly fees for a warehouse location and all the equipment needed to operate it. In order to compete with other businesses, they must pass these additional costs on to their customers.
Attempt at explaining why this exists: To ship products from a central/warehouse location (to save money on labor by only needing a small staff), you need a place for said products as well as products that will be able to safely move your items from place to place without breaking or being exposed to damage as well as the employees who are there for quality control purposes or customer service. In order to make up for the cost of these expenses, companies will often increase their prices.
Due to this practice, customers may face unnecessary costs for products that are already expensive, especially if they plan to ship those items internationally. In response to this issue, a number of prominent online retailers have begun offering individualized rates for international shipping.
Conclusion:
For many companies, shipping is the second highest variable cost after raw materials. Shipping costs can be reduced by consolidating orders and using less expensive carriers to offset fuel surcharges. The best way for you to reduce your shipping expenses is to contact us to help you find ways of saving on this expense without compromising customer service or product availability.
