A freight carrier is a company or individual that moves cargo for a shipper. Shippers are the companies or individuals that make or have the cargo that needs to be transported.
Freight carriers vary based on modes of transportation offered, field areas covered, types of cargo transported, and more.
A freight carrier moves freight via land, air, sea, and/or rail. Some freight carriers operate internationally, and some specialize in domestic operations. In the freight logistics industry, regulations play an important and influential role. Regardless of the size of the operating field, carriers have to adhere to the strict regulations and legalities established within their respective territories.
Types of Truck Freight
There are many different types of truck freight. Freight selection is usually based on distance, volume of shipment, timing, and pricing.
A full truckload, or TL, freight carrier dedicates an entire truck to one company’s shipment. From the pick up location to the final destination, all of the cargo traveling in the truck is owned by the same, singular company. This means that the cargo can travel directly to the destination without making any stops to drop off other cargo along the way. TL truck freight is a fast and direct shipping method.
Less than truckload, or LTL, refers to shipments in which a company’s cargo does not completely fill the truck. In order for the truckload to reach capacity, cargo from an additional company or companies is added to the load. Typically, all of the cargo is in transit to the same, or a similar, destination. In comparison to TL, LTL is more complex, takes longer, and requires more handling of the cargo. When properly optimized for the most efficient use of time, equipment, and capacity, LTL is a lower cost method of shipment. When LTL is a good fit for a company, it can reduce overhead costs without sacrificing quality or efficiency.
Partial truckload, or PTL, is a combination of TL and LTL. Some carriers also refer to PTL as volume LTL. PTL shipments are larger volumes than LTL, do not require the use of a full truckload trailer, have flexibility in the travel time, and do not involve sensitive cargo. In PTL, cargo stays on one truck for an entire journey, does not require freight class, and is handled less. With PTL, shippers pay for the weight capacity and space filled by the cargo, so for certain types of goods, PTL can be the most cost-effective solution.
How Freight Carrier Rates are Determined
There are several factors that influence carrier rates, and it is important that all parties understand them.
Distance and Destination
The delivery distance and destination influence the carrier rates by determining the amount of fuel and time needed for the shipment. Additionally, shipping costs vary regionally, and if a shipment traverses several regions, the costs will likely increase.
Freight Size, Weight, and Density
The dimensions of the freight describe the amount of space the cargo takes up in a truckload. The larger the freight, the more expensive the shipment. The weight of the shipment is also important. The heavier the freight, the more expensive the shipment. In regards to freight density, a heavier load that is smaller in size is less expensive to transport than freight that weighs the same but is larger in size.
Carriers standardize freight rates based on the type of freight, and every type of freight can be organized into a classification. The freight class is determined by the weight, size, and type of product. Because there are many different types of freight, calculating the correct class can be challenging. Freight brokers play an important role in this process. To learn more about freight brokerage, read this article.
The cost of fuel is determined by the price of diesel as well as taxes and surcharges imposed by different shipping regions. These costs vary greatly from region to region, state to state, and within shipping lanes. In general, when fuel prices rise, the shipping costs increase as well. The opposite is also true.
Supply and Demand
When there is a lot of freight to move and few trucks are available, the demand is high and supply is low. This causes prices to rise. Many factors can influence the supply and demand equation including natural disasters, abundant produce seasons, supply chain disruptions, and more.
There are additional charges for factors that delay the shipment or require the driver to use special equipment. The list of potential miscellaneous charges includes things such as lift gates, forklift unloading, dock unloading, and residential or non-commercial delivery destinations.
How to Choose the Best Freight Carrier
The right freight carrier handles the type of freight you ship at the capacity you require, is reliable, is responsible, and has an excellent safety record. It is best to work with a trusted logistics company.
First Star Logistics is a unique, asset-based global logistics provider with more than 60 years of experience transporting freight. For all of your freight needs, contact First Star Logistics today!