Road freight is a flexible and widely used mode of transportation for domestic and cross-border shipments. It offers door-to-door service, adaptable routing, and cost efficiency for both short and medium distances. To optimize logistics costs, it is essential to understand how road freight pricing is calculated and what factors influence the final transportation cost.
This article explains the billing basis for road freight, the difference between FTL and LTL shipments, the concept of chargeable weight, and the main surcharges to consider.
1. FTL and LTL Shipments
Understanding the difference between FTL and LTL is crucial when selecting the most cost-effective transport solution.
FTL (Full Truckload)
- One shipper occupies the entire truck
- Faster transit times
- Lower risk of cargo handling and damage
- Ideal for large volumes or urgent shipments
LTL (Less Than Truckload)
- Multiple shippers share the same truck
- Cost-effective for smaller shipments
- Longer transit times due to consolidation and multiple stops
- Pricing based on chargeable weight
Choosing between FTL and LTL depends on shipment size, urgency, and budget considerations.
2. Billing Basis for Road Freight
The billing basis in road freight depends on several operational and commercial factors. Pricing is generally calculated based on:
- Distance between origin and destination
- Shipment type (FTL or LTL)
- Cargo weight and volume
- Type of vehicle required (van, truck, trailer)
- Nature of goods (general, fragile, hazardous)
- Cross-border or domestic transport
FTL Pricing
For FTL shipments, the cost is usually calculated per vehicle or per trip, regardless of the cargo weight, as long as the truck capacity is not exceeded.
LTL Pricing
For LTL shipments, pricing is based on the chargeable weight, which considers both weight and volume.
Road freight tariffs may also vary depending on fuel prices, road conditions, tolls, and regulatory requirements.
3. Road Freight Surcharges to Consider
In addition to the base transport rate, several surcharges may apply in road freight operations:
| Surcharge | Description | |-----------|-------------| | Fuel Surcharge | Adjusted based on fuel price fluctuations | | Toll Charges | Applied for highways and toll roads | | Cross-Border Fee | For international road transport | | Waiting Time / Detention | For delays at loading or unloading | | Overweight / Oversize | For cargo exceeding standard limits | | Hazardous Goods (ADR) | For regulated or dangerous cargo | | Seasonal / Peak Surcharge | During high-demand periods |
These surcharges vary by route, country, and carrier, and should always be clarified in advance to avoid unexpected costs.
4. Chargeable Weight in Road Freight
For LTL road freight, pricing is calculated using the chargeable weight, which compares the actual weight and the volumetric weight.
Volumetric Weight Formula
Volumetric Weight (kg) = (Length × Width × Height in cm) ÷ 3,000
Note: The divisor may vary (3,000 or 4,000) depending on the carrier or country.
Chargeable Weight Rule
The chargeable weight is the higher of:
- Actual gross weight
- Volumetric (dimensional) weight
Example Calculation
- Actual weight: 700 kg
- Dimensions: 200 × 120 × 100 cm
- Volumetric weight = (200 × 120 × 100) ÷ 3,000 = 800 kg
The chargeable weight will be 800 kg.
This calculation encourages efficient packaging and optimal use of truck space.
Conclusion
Road freight remains a key pillar of logistics operations due to its flexibility and accessibility. By understanding the billing basis, choosing the right FTL or LTL option, accurately calculating chargeable weight, and anticipating applicable surcharges, businesses can better control transportation costs and ensure efficient delivery.
Working with a reliable logistics partner ensures transparency, cost optimization, and compliance with road transport regulations.