The Pros and Cons of Using a Freight Calculator
What is a Freight Rate Calculator?
Before the digital age, LTL shippers and carriers relied on paper handbooks filled with mathematical expressions to help calculate and determine freight rates. Rates would be calculated based on the type of freight, the weight, volume, density, the distance it needed to go, and where it traveled to and from. The freight information would be plugged into existing equations to figure out the cost to send the cargo and give shippers and carriers a way to predict freight costs for their shipments.
These days, freight calculators have gotten more intuitive and accessible. Many 3PLs have made digital freight calculators available online for shippers to input information and get instant quotes for their freight rates. This technology has drastically streamlined the process of obtaining a freight quote for an LTL shipment, making what was once a series of hand-done equations into instant online rates where carriers bid for your business. However, there are pros and cons to this system.
Pros of Using a Freight Quote Calculator
There are a lot of advantages to using an online freight calculator to get an estimate for your freight rate, the biggest being how simple and accessible it is for everyone to use. Your online quote is determined by five main factors: the type of freight, the mode of transport (truck, ship, train, aircraft), the weight of your shipment, the size of your shipment, and the distance between the origin and destination locations.
To get an accurate quote from a freight rate calculator using these five factors, you must enter:
You can obtain multiple freight quotes from different carriers for your LTL shipment by inputting this information into an online freight calculator.
Cons of Using a Freight Quote Calculator
While freight rate calculators are invaluable tools for both shippers and carriers to speed up the process of obtaining a quote, they are not perfect. LTL shipping is a complicated process with a variety of factors that can affect the final cost to ship. Some of these factors do not directly translate to a digital tool and can result in additional charges that are not made apparent in the initial estimate. In addition, many of the aspects of an LTL shipment arrangement can be negotiated, depending on how consistently a shipper moves cargo with certain carriers or through specific shipping lanes.
LTL freight shipping relies heavily on building trust and relationships between shippers and carriers. Not all carriers or shippers are created equal, so to speak. Cultivating a mutually beneficial partnership with a trusted carrier goes beyond entering figures into an online calculator and getting a freight quote out the other side.
So while LTL freight rate calculators are a valuable and practical tool for shippers getting into LTL shipping and figuring out their freight budget and the going rates in the marketplace, it does not necessarily account for all contingencies in an LTL carrier-shipper relationship. On the one hand, if your shipment description, its NMFC class, or the origin and destination locations are inaccurate or incomplete, you could get hit with additional charges on your final invoice due to specialty services being required to transport the shipment. On the other hand, if you simply enter the facts and figures into an online tool to get potential freight rates, you may be missing out on negotiable charges that may be available through some carriers. Depending on whether you intend on shipping consistent loads to the same location using the same accessorials or services, you may be able to broker a deal with your carrier that exchanges the consistency and predictability you provide for reduced rates.
The Bottom Line
Freight rate calculators are a helpful tool for first-time LTL shippers or for getting an accurate estimate regarding what your LTL shipment may cost to move. However, relying solely on an online calculator for your rates over time may result in missed opportunities to negotiate and work with your carrier to take advantage of loyalty discounts, preferred shipper status, and accessorial bargains.
The best way to build a relationship with your LTL carriers is to work with a 3PL like Koho. Koho is partnered with an extensive network of trusted carriers and has LTL shipping experts ready to help you secure the best shipping rates with the best carriers in the business. They can offer advice, help build relationships between you and your carrier, and ensure you get the most from your LTL freight budget.