The Key Factors that Impact Haulage Rates
A lot of time and effort goes into calculating and quoting freight and haulage rates up and down the UK every day. Most transport operators will know obscure distances between random UK towns off by heart, but what factors – beyond mileage – contribute to the calculation of these rates?
Weight and dimensions
The primary factor used in calculating road haulage rates, other than the total mileage between the two end points, is weight. However, it’s not always as straightforward as using the cargo’s actual gross weight. Instead, container haulage firms often use the dimensions of the cargo to calculate what’s usually refer to as either dimensional weight, or volumetric weight.
Imagine a scenario where one shipper is transporting a box of heavy lead bricks, while another is shipping an identically sized box of feathers. If dimensional weight weren’t taken into account, the lead box would be charged a much higher rate than the feather box, despite taking up the same volume – and the problem with this is that transporting boxes of feathers makes for very inefficient use of a given vehicle’s actual weight capacity.
By applying dimensional or volumetric weight calculations, the haulier is able to price more fairly in terms of vehicle capacity; in a situation like the one described above, the lead box shipper might be charged based on gross weight, while the feather box shipper would be charged by dimensional weight.
Gross weight and dimensional weight will apply to most cuboid, easily stackable packages or pallets, but what happens when the object has an irregular shape? The most common approach is to base the pricing on a hypothetical cuboid that would be described by the object’s longest dimensions on each axis. Additionally, irregular or non-stackable objects might be charged at a dimensional weight based on the full height of a shipping container – up to 2.6 metres for a standard intermodal container, or 2.9 metres for a high-cube container.
No “one-rate-fits-all”
For Transmode, in common with many other providers of logistics solutions, it’s important that our haulage rates are clear and transparent to our clients. However, the way those rates are set in the industry isn’t always as straightforward as we might like it to be. Back in 2012 Geoff Dunning, then chief executive of the Road Haulage Association, wrote about potentially industry-damaging low haulage rates in the UK, and that a culture of “one-rate-fits-all”, failed to account for the intricacies of the haulage industry
He pointed out that rate calculations need to take account of: “the time required (wages and overheads) covered by a standard cost per hour; the distance covered at a standard cost per mile (fuel, tyres, repair and maintenance, and lubricants); any job-specific costs, such as subsistence and tolls; plus a margin of profit. These costs mix together in infinitely varying proportions, leading to rates per mile which depend on miles covered in a given period of time.”
When calculating what to charge clients, those “miles covered in a given period of time” can also vary from route to route. The vagaries and conditions of the UK’s motorway and trunk road network means that some routes are simply more prone to delays and congestion than others.
So, those are some of the common key factors that impact the haulage rates that are quoted to clients by logistics operators. If you have any questions about haulage rates, or even if you just want to give your opinion on our blog, we’d love to hear from you. Please get in touch using our online contact form, or give us a call on 01394 675 635.