27 April 2023
Efficient transportation is crucial for businesses to optimize their supply chains and minimize costs. However, recent data from Flock Freight and Drive Research reveals that 45% of shippers used partially empty trucks in 2022, pointing to potential inefficiencies in the industry. Understanding how to calculate shipping volume can play a role in optimizing truckloads and reducing shipping costs.
Why shipment volume is important
Vast diversity in freight types and industries makes estimating shipping volume a challenge. Shipping volume is a key determinant of freight costs and is important for a variety of reasons:
- Capacity: Shipping volume of individual shipments affects how efficiently the space inside of a truck can be used and whether it can incorporate multiple shipments.
- Equipment requirements: Larger shipments may need specialized equipment, such as a larger trailer, which may be more expensive to procure or operate.
- Freight class: Many carriers use a freight class system that considers density and volume, so larger shipping volumes might result in higher shipping costs.
- Accessorial charges: Oversized or over-dimensional shipments may be subject to additional fees or surcharges, which increase the overall shipping cost.
Knowing how to calculate volume weight of shipments is important, but it’s not the only factor that determines freight shipping costs.
What determines full truckload freight rates?
Carriers use several factors to determine full truckload (FTL) freight rates. The most common variables include:
- Travel distance
- Freight weight and volume
- Freight class determined by type, density, value, and handling requirements
- Specialized transportation requirements such as a refrigerated truck
- Market demand
- Fuel costs
- Seasonal factors like holiday peaks or weather-related disruption
- Carrier-specific pricing models
While large organizations generally deal in volume, FTL might not be the best solution for small to midsize businesses (SMB) who don’t always have enough freight to fill a truckload.
Fortunately, there are some tactics you can use to save on freight costs – even if you have smaller shipments. Here are some ideas to help you find the most value in your shipping rates.
Often, carriers are open to negotiation and may be willing to offer discounts based on variables like shipment volume, frequency of shipments, or long-term contracts.
Plan ahead and ship early
Last-minute or urgent shipments are usually more expensive. When you plan ahead to get shipments out the door sooner, it’s easier to consolidate cargo and reduce costs.
Be flexible on pickup and delivery times
Flexible pickup and delivery times can allow carriers to optimize their routes, reduce mileage, and minimize idle time. If you’re not sticky about scheduling, you may be able to avoid wait time fees and take advantage of reduced rates by pooling freight in shared truckloads (STL). As a bonus, carriers may offer discounts during off-peak hours.
Build relationships with carriers
By establishing strong partnerships and working closely with a select group of carriers, you may be able to negotiate better rates and service agreements based on loyalty and mutual benefits.
Optimize shipping lanes and transit times
Longer or less direct routes may result in higher rates due to increased mileage and time, while more direct routes can reduce those expenses.
Use freight technology and tools
Technology like Flock’s Freight’s full-service platform can help you automate freight procurement, optimize routes, and consolidate shipments. Our patented technology finds and fills empty spaces in trucks. With shared truckloads (STL) for smaller shipments, you can save up to 20% compared to FTL by splitting the costs with other shippers. These tools also help freight carriers maximize their trailer space, instead of settling for partial loads – making each load more efficient and reducing carbon emissions.
Understanding freight classes
The National Motor Freight Classification (NMFC) is widely used in the trucking and transportation industry in the United States. The NMFC assigns a specific freight class to each type of commodity or product based on four main characteristics:
- Commodity and Density: Some commodities are automatically assigned to a particular freight class. Other classes are determined by dividing shipment volume by its weight. Lower density equals higher freight class.
- Stowability: Stowability refers to the ease with which freight can be loaded and stowed in a truck. The more difficult it is to load a shipment, the higher its class will be.
- Handling: The level of care and attention required determines a shipment’s class. Freight that’s more difficult to load or carry has a higher class.
- Liability: Cargo more likely to be stolen or damaged, or to damage other freight, will be a higher class.
Freight classes typically range from 60 to 400, with lower numbers representing higher density and simpler-to-handle freight, and higher numbers indicating lower density and more difficult-to-handle freight. Higher freight classes are charged tariffs and higher shipping rates due to the increased complexity or cost of handling and transportation.
Incorrect classification can result in additional charges, billing disputes, and delays in transportation, so selecting the correct class is essential.
Freight brokers know the NMFC system and can help you accurately classify your cargo. With access to a wide network of carriers, they can leverage their connections to find the best carrier for your specific needs and secure the best rates and terms.
How is individual shipment volume calculated?
In order to determine pricing, you need to have an accurate shipping volume measurement. That typically involves the following steps:
- Measure the length, width, and height of the cargo and convert it to cubic units.
- Account for any packaging or pallets, and add this volume to the total.
- Assign a load factor to account for empty spaces or packing inefficiencies.
- Consider any special requirements, such as irregularly shaped cargo which may require different calculation methods.
- Round up to account for tolerances and ensure the cargo will fit within the available space in the truck trailer or container.
Precise volume calculations help determine the correct amount of space the shipment needs, enabling carriers to allocate resources, plan loads, optimize truck space utilization, and estimate operational expenses.
Incorporating weight and distance into the calculation
Weight and distance are also factored into shipping costs. Since heavier shipments require more fuel, more labor, and potentially larger equipment to transport, carriers often incorporate a per-pound fee (or different rates for different weight ranges) into their pricing models. Likewise, since longer distances require more time, fuel, and other resources, pricing may be calculated per mile or kilometer or vary according to distance ranges.
Other factors, such as transportation mode, service level, accessorials, and other specific requirements, are also considered to arrive at a comprehensive and accurate cost estimate for transportation services.
Schedule a shipping consultation with Flock Freight
Accurate calculations mean accurate cost estimates and greater efficiency overall – but shipping volume and freight cost calculations can be complicated.
Want to make sure you know how to calculate shipment volume correctly? Book a call with a member of the Flock team today.