One of the most important cost items in international trade is freight charges. If freight charges are not calculated correctly, unexpected costs may arise in logistics processes. Therefore, it is crucial for exporters, importers, and logistics companies to understand the basic criteria for freight calculation. Factors such as weight, volume, density, and LDM are evaluated differently in each mode of transport to determine the final price.
What is Freight? Its Importance in International Transportation
Freight is the fee paid to the carrier for transporting a load from one point to another. In road, sea, air, and rail transport, freight costs constitute a key element of logistics planning.
The importance of freight:
- Cost Management: It constitutes the largest portion of export and import costs.
- Competitive Advantage: Companies that calculate freight rates accurately gain an advantage in pricing.
- Operational Planning: The right freight ensures the timely and smooth transportation of cargo.
Increases or fluctuations in freight rates in global trade directly affect product costs and profit margins.
Basic Criteria Used in Freight Calculation
The basic criteria considered in freight calculation are as follows:
- Weight: Calculated in gross or metric tons.
- Volume (CBM): The space occupied in a container or cargo area.
- Density Ratio: Weight/volume comparison.
- Distance: The length of the route over which the transport will take place.
- Transportation Mode: Sea, air, road, or rail transport.
- Additional Services: Loading, unloading, insurance, and customs procedures.
Each mode of transport assigns different weights to these criteria. For example, in air transport, weight is generally more decisive than volume, whereas in sea transport, volume is more important.
Weight-Based Freight Calculation Methods
Weight-based calculation is particularly common in air freight. The freight charge is determined based on the total weight of the shipment.
- Actual Weight: The gross weight of the shipment as measured on the scale.
- Volumetric Weight: Weight determined based on the volume of the load and obtained using calculation formulas.
- Comparison: Freight is calculated based on whichever value is higher.
For example, if a load weighs 100 kg but has a large volume, resulting in a higher volumetric weight, freight charges are calculated based on this value. This method ensures efficient use of transport capacity.
Volume-Based Freight Calculation: CBM and Usage Area
CBM (Cubic Meter), or cubic meter calculation, is the basic unit of measurement used particularly in maritime and road transport.
Calculation formula:
CBM = Uzunluk (m) x Genişlik (m) x Yükseklik (m)
1 CBM is generally considered equivalent to 1 ton of gross weight. If the cargo is light but takes up a lot of space, freight is calculated based on CBM.
Areas of use:
- Container shipping,
- Palletized and boxed products,
- Large-volume but lightweight cargo (e.g., textiles, plastic products).
This method plays a critical role in determining container occupancy rates, particularly in imports and exports.
What is LDM (Load Meter)? Calculation in Road Transport
LDM (Load Meter) is a calculation method used in road transport. It expresses the area occupied by the load on the truck trailer in meters.
- Calculation: 1 LDM is considered equivalent to approximately 1.75 CBM.
- Area of Use: Used especially in less-than-truckload (LTL) transportation.
- Advantage: Even if the cargo is light in weight, freight charges are calculated based on the space it occupies.
For example, a 2-meter-long pallet occupies 2 LDM in the truck trailer. Even if the load is light, freight charges are determined based on this occupied space. This system ensures that vehicle capacity is used fairly.
Density Ratio and Its Effect on Freight Rates
One of the most important criteria determining freight rates is the density ratio. The density ratio is obtained by dividing the weight of the cargo by its volume. If the cargo is light but bulky, the freight calculation is based on volume. For heavy cargo that takes up little space, weight is used as the basis.
For example:
- A load weighing 100 kg but occupying a volume of 1 m³ has a density of 100 kg/m³.
- A load weighing 500 kg but with a volume of 0.5 m³ has a density of 1000 kg/m³.
In the first case, freight is calculated based on volume, while in the second case, it is calculated based on weight. This ratio is of critical importance, particularly in air and sea freight.
Differences in Freight Calculation in Air, Sea, and Land Transportation
Freight calculation methods vary depending on the mode of transport:
- Airline: More weight-focused. Volumetric weight is calculated and compared to actual weight. Freight is determined based on whichever is greater.
- Sea freight: Operates on a container basis. CBM (cubic meter) calculation is important. Costs may be high for light but bulky cargo.
- Road transport: LDM (Load Meter) calculation is used. Freight is calculated based on the area occupied by the load on the trailer.
Since calculations differ for each mode of transport, companies must plan accordingly.
The Effects of Miscalculations on Logistics Costs
Incorrect freight calculations can result in significant cost burdens for companies. For example, a container with an incorrectly calculated volume may incur higher freight charges than expected.
Main effects:
- Additional Costs: Penalty freight charges due to incorrectly declared measurements.
- Delays: Postponement of transportation due to faulty planning.
- Customer Dissatisfaction: Delays and extra costs can lead to customer loss.
Accurate freight calculations enable companies to both protect their budgets and manage their operational processes with confidence.
Use of Digital Tools in Freight Calculation
Today, digital tools and software are frequently used in freight calculations.
- Online Freight Calculation Modules: Companies can instantly receive freight quotes by entering their cargo information.
- ERP and Logistics Software: Freight calculations are performed automatically by integrating processes.
- Tracking Systems: The route and weight information of the cargo is tracked via software, and current costs are calculated.
Digital tools minimize human error, enabling accurate and fast freight calculations.
Accurate and Reliable Freight Calculation with Hazar Logistics
Hazar Logistics provides reliable freight calculation support to companies with its experience in international transportation.
Advantages:
- The most suitable freight calculation based on the characteristics of the cargo,
- Alternative cost solutions based on the mode of transport,
- Digital tracking and reporting support,
- Transparency and speed in operational processes.
Hazar Logistics helps its customers stand out in the competition by offering them not only transportation services but also solutions that provide cost advantages.
