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If You’ve Ever Wondered Why Shipping is so Expensive, You’ve Come to the Right Place

If you’ve ever needed to ship anything larger than a small box, you probably already saw that the number next to the dollar sign can have one or two digits more compared to your usual parcel shipments.

To understand why freight shipping is so expensive, we have to dive into the intricacies of freight pricing, as well as the operational costs faced by freight carriers.

How Freight Pricing is Determined

First, let’s look at freight pricing and how it’s determined. For an in-depth look at freight pricing, feel free to check out our previous article about what goes into freight pricing, and why freight quotes expire.

Freight pricing is a complex process, and the more people are involved, the higher the labor cost and the price is likely to be. Below, you’ll find the most important and most common factors that contribute to the cost of shipping goods.

Distance and Route

The longer the distance, the higher the cost of fuel and the final cost. Lanes with more redistribution required are likely to incur additional fees due to longer travel times and more care required by all staff involved.

The distance traveled doesn’t only mean higher fuel consumption. It also means often much higher driver and warehouse worker work hours, storage, etc.

Weight and Volume

Freight costs are directly affected by the weight and volume of the shipment. Heavier and larger shipments require more resources to transport.

This factor varies in degree from carrier to carrier, but generally, if your shipment is fragile and takes up a lot of space, it’s more likely to cost more to transport as well.

If your shipment is bulky, easy to maneuver, and dense (doesn’t take up too much space relative to the weight), it’s likely to be more reasonably priced.

Mode of Transport

Different modes of transport (such as air, sea, rail, or road) have varying costs associated with them. Air freight is typically the most expensive due to the speed and fuel requirements.

Freightera specializes in B2B ground shipping, so we’ll just mention rail, road, and intermodal as the main examples.

If you’re shipping anything via ground freight, the most affordable (and the greenest!) option will be rail shipping. However, due to various complicated factors, it’s also the slowest mode of transportation in North America. You can read more about it in our train vs. truck shipping article.

Intermodal shipping is a combination of road and rail shipping and offers a good mix of rail and road transportation to make sure you get a faster delivery at a more affordable price.

And lastly, road shipping is the fastest and most expensive way to ship freight on the ground. It means using only trucks to get your cargo from point A to point B.

Fuel Costs

Fluctuations in fuel prices regularly impact freight costs. Higher fuel prices mean higher operational costs for carriers. Unfortunately for most of us, these charges are passed down to the shipper.

Fuel price fluctuations are actually the main reason freight quotes last for only a few days.

Demand and Seasonality

During peak seasons when demand is high, prices tend to increase. This is due to the limited availability of resources and the higher costs of managing logistics during busy times.

Trucks are more difficult to manage and maintain than other modes of road transport. This means that they’re more limited in supply too. Each carrier we work with has a limited number of trucks and drivers, and depending on the location, they may be limited in how often they can service a given area, depending on its demand. This is especially true during the “shipping season” like when wholesalers and retailers are preparing for the summer or winter holidays.

Regulations and Tariffs

Compliance with various regulations and tariffs, especially in international shipping, can add substantial costs to freight operations.

This point is fairly specific and varies greatly from place to place and based on what you need shipped. These price increases don’t only concern import/export and customs brokerage fees. They may also include special permits for using trucks on various roads due to maintenance, or permits for transporting oversize or overweight cargo.

As mentioned, one of the important factors is supply and demand, which is sometimes directly shown through dynamic pricing structures. Dynamic pricing means that freight rates vary from day to day, or even hour to hour depending on demand and fleet capacity.

Next come the operational costs of trucking companies and/or drivers themselves.

The Operational Costs of Trucking Companies and Owner-Operators

For owner-operators in the freight industry, managing a transport business involves far more than just covering the cost of fuel.

Here is a deeper look at the expenses of maintaining a competitive and efficient logistics operation.

Vehicle Purchase and Maintenance

Acquiring a truck or a fleet is a major investment. Depending on the machinery you have in mind, you can expect to pay even hundreds of thousands of dollars.

Then comes the maintenance of your vehicles, especially as they age or endure heavy use, which demands regular expenditure on parts and service. From engine overhauls to tire replacements, these costs can quickly add up, and they’re nothing to scoff at.

Insurance

Transportation over long distances comes with inherent risks, ranging from road accidents to cargo loss, or even theft. To mitigate these risks, comprehensive insurance is mandatory, albeit expensive.

Carriers’ default compensation for lost or damaged goods is usually about $2/lb of cargo. This is the standard amount you can expect to receive from a carrier if your goods are damaged or lost.

Considering the amount of shipments carriers handle on a daily basis, the mandatory carrier insurance packages can be expected to cost a handsome amount.

Licenses and Permits

Operating legally in the freight industry requires adherence to quite a handful of regulations and requirements. Acquiring the necessary licenses and permits (the prices of which can vary significantly from one region to another) can be costly, particularly when crossing international borders.

Each of these licenses comes with a fee, and a lot of the time, they need to be renewed periodically, which means that the carrier will always have these ongoing operational costs.

Employee Salaries

When working alone as an independent contractor, a driver will have only themselves to worry about payment-wise.

However, for operations large enough to require a team, competitive salaries are essential to attract and retain skilled professionals who can operate the trucks safely and reliably. From drivers to dispatchers or warehouse workers, salaries can make a significant part of the operational budget.

Operational Fees

The day-to-day running of a freight operation (or even a single freight truck) involves numerous additional fees. Before we even get to truck maintenance, road tolls, fees at weigh stations, and other charges related to infrastructure use are constant. And yes, freight trucks get weighed to make sure they adhere to road regulations.

These fees vary by route and can significantly affect the cost of a single transport job.

Downtime Costs

Finally, downtime is an often overlooked but still a significant factor for carriers when it comes to losses. When trucks are out of commission for repairs, or when they are idle waiting for the next load, they are not generating revenue.

During these periods, unfortunately, there can still be costs related to vehicle storage and security, which compound the financial strain.

So Why is Shipping so Expensive?

As we’ve seen, shipping is expensive, in large part because it’s very complicated.

Reasons range from factors brought on by the shipper such as the weight, commodity, and dimensions of the freight, all the way to the hefty operational costs such as insurance paid by the trucking companies and owner-operators.

In the sea of high prices and difficult-to-deal-with carriers, it’s difficult to know where to turn. That’s why we recommend reading through what separates Freightera from other freight shipping solutions out there. If you want it done affordably, and more importantly if you want it affordable and right — You’ll ship it with Freightera.

The post Why is Shipping so Expensive? appeared first on Freightera Blog.

Learn how to reduce one of the biggest expenses for small and medium-sized businesses

In this article, we go over some of the often-overlooked practices that can help you and your business save time and money.

Use technology to streamline the shipping process

By using online shipping platforms such as Freightera, you can easily comparee rates from multiple carriers, track shipments in real time, and automate documentation and invoicing, all in one place.

Our user-friendly website and knowledgeable staff can help you save time and resources, and reduce errors while shipping freight.

Use less-than-truckload (LTL) shipping instead of full-truckload (FTL)

If you only have a few pallets or boxes to ship, LTL (less than truckload) shipping is a more cost-effective option. By sharing a truck with other businesses, you share the costs and save money on shipping.

For example, shipping one pallet of 500 lbs via LTL from Toronto to Montreal would cost $146 CAD compared to $1915 CAD to ship it via FTL.

Take advantage of the benefits of rail shipping

Freight shipping by train is often cheaper than shipping by road, and it’s usually more environmentally friendly. It can be a cost-effective and efficient option for your business if you ship heavy or bulky goods over long distances.

Use packaging and shipping optimization techniques

Use smaller and more lightweight packaging to reduce shipping costs, and consolidating shipments from multiple locations can help you optimize shipping routes.

For example, you might want to wait with shipping single boxes until you have enough cargo for a whole pallet. Instead of sending a single pallet, consider waiting until you have a few, which might result in a better freight rate.

Get quotes (for free on Freightera) and see what gets you the best rate-to-volume ratio.

Consider using consolidator carriers

Consolidator carriers do the same thing as warehouses which consolidate their cargo before shopping. Such freight carriers wait until they have enough cargo to fill up an entire truck before sending it out to its destination, thus saving on shipping costs.

You can look for consolidator carriers specifically on Freightera when you get your quote. They’ll generally be the cheapest option and they’ll have a note next to their name specifying that they are a consolidator.

Consider the location of your warehouse

Having a warehouse in a strategic location can make a big difference in shipping costs and times. For example, having a warehouse closer to major shipping hubs can reduce transportation costs and transit times.

Get help from one of Freightera’s experienced freight specialists

Our freight shipping specialists can help your business find the best rates and routes for shipping goods. We have access to a wide range of carriers and we’ll find the most cost-effective and efficient options for your specific needs.

Conclusion

By implementing these tips, you can reduce costs and improve efficiency when shipping freight in Canada. It’s important to note that the best approach will depend on the specifics of your company’s shipping needs and operations, but these tips can be a good starting point for businesses looking to improve their shipping operations.

The post 7 Tips for Reducing Costs While Shipping Freight in Canada appeared first on Freightera Blog.

[Updated June 2023]

If your business ships freight, you likely regularly work with businesses that have docks. That means that, in order to minimize the number of potential issues during pickups or deliveries, you want to know what you’re looking at during preliminary checks.

That is why we’ve prepared some information that we thought might help you keep unwanted issues to a minimum.

The types of loading docks

Loading docks are pretty standard. They are 48 inches tall (standard truck trailer level) and they always serve the purpose of making loading from a truck and unloading as easy as possible.

With that said, there are a few different types of loading docks that differ in some key features.

Flush (Standard) Loading Dock

Standard docks are simple openings in a wall at truck height. Most of the time they have cushioning at the truck entry points to avoid any potential damage to the trailer.

These are the most common types of docks for several reasons. Mainly, they save space as they don’t protrude from the building.They do not provide any additional shelter for the trucks, such as a garage. Along with saving space, they still provide ample protection from the elements for the staff as everyone can be safely inside the building during loading and unloading.

Sawtooth Loading Dock

Sawtooth loading docks can be open or closed (more on that below). That means that this solution regards space management more so than protection from the elements.

These types of loading docks are useful when you need to accommodate multiple trucks, but you have limited space. That doesn’t mean they don’t offer protection from the elements. Only that their primary reason for being is to accommodate more trucks than would be possible otherwise.

For this reason, docks are placed at an angle relative to the building so that more trucks could fit at one time.

Considering that this solution is commonly used for saving space, you may want to check with your shipper/consignee if they require a straight truck before booking your shipment.

Open Loading Dock

Open loading docks are just that, docks that protrude from the building and are in the open, exposed to the elements. Usually, although not always, open docks have a roof to prevent cargo from getting wet during rain.

This type of dock is relatively unpopular, but it does have its advantages. For example, you don’t have to have your open dock protrude from the building. An open dock can be placed farther away from an office building if you’re looking to avoid clutter due to trucks coming and going.

Closed Loading Dock

Closed loading docks are the equivalent of buying a yacht in the shipping industry. They are also relatively rare as far as docks are concerned.

Closed docks allow for an entire truck or trucks to park in a closed garage-like space. That means that they take up the most space possible, but provide the ultimate protection and comfort for all parties involved.

How to spot a loading dock on Google Maps

If your shipper/consignee is not very responsive and you’re having trouble getting confirmation from them on whether they have the means to load/unload, it might be a good idea to check their location on Google Maps.

From an aerial view, you can usually see if a certain location has a dock. For anyone that isn’t as experienced in dock scouting, they may look a little bit like windows.

That is why it’s best to check via street view as well and be 100% sure that what you’re seeing is actually a dock.

Recap

Docks are docks, but not all of them are created equal. Different docks have different pros and cons. If your shipment is in any way sensitive, make sure that your business partner can accommodate your needs.

You will also want to check Google Maps for your partners’ locations and be aware of what their possibilities are. If you are as prepared as possible, very little will be able to surprise you!

And that is all you’d need to know about shipping docks. If you’re in need of freight services, get the best freight shipping rates online, for free, and in 15 seconds!

Happy Shipping!

The post The Types of Docks And The Best Ways to Spot Them appeared first on Freightera Blog.

[Updated in April 2022]

Be it less than truckload (LTL) or full truckload (FTL), we have the shipping solution for you. With our completely automated online quoting system, you can get the best rates available in a matter of minutes.

Ship freight in Canada with our reliable carriers. Our staff of experts is there to help you every step of the way.

Freight solutions

LTL shipping is the most cost-effective option when shipping smaller amounts of freight. At Freightera, we use a multitude of road, rail, consolidator and intermodal carriers which allows us to have the most competitive rates at all times.

Using a multitude of shipping methods and carriers is a big advantage when it comes to shipping rates, and due to our shipping volume, we have discounted rates for you as well.

FTL shipping is the best option for anyone looking to ship in large quantities, and yes, we do offer all-in instant rates with just as many carriers for FTL shipments as well.

Flatbed services are available at Freightera as well, for any oversized or overweight shipments you might need.

Get it all in one place

If you’re looking to ship cross-border, Freightera makes it easier to keep everything in one place. You can get customs brokerage services and rates from our partner directly through our website. [Update: The customs brokerage service through Freightera has been temporarily disabled until July 2022].

Along with instant quotes from multiple carriers in one place, get your freight documents automatically as soon as you book your shipment. A filled-out BOL will be sent to you as soon as you place your pickup request.

Once your pickup has been completed, you will also be able to track your shipment online, automatically without ever having to leave your Freightera dashboard.

Once your delivery has been completed as well, your shipping invoice will be automatically sent to you. It will also be readily available on our website as well.

Like we said, everything in one place.

Differences between USA and Canada: Tomato – Tomahto (not quite)

Tailgate/Liftgate

Shipping differs from state to state just enough to make a difference. It’s still moving cargo from one place to another, but subtleties do exist.

For instance, our US colleagues call a tailgate (tomato) a liftgate (tomahto). One is at the tail of the truck, and the other lifts things.

Freight class

There are some actual differences, however, such as the class system (defined by the NMFTA) being used in the US, and not in Canada.

This classification system is a set of numbers ranging from 50 to 400 assigned to all LTL shipments moving to, from or within the US. This number helps the carrier determine how easy and safe a shipment is to maneuver.

Taxes

Another point where the issue is not quite a simple tomato is taxation. In Canada, shipments are taxed based on the destination province’s tax legislation. In the US, there are no taxes on freight shipping.

Other differences

In general, carriers tend to be a bit more lenient in Canada than in the US. They will not charge for an appointment where a US carrier might, etc.

What Clients Say About Us

“Very useful”

Very useful business freight marketplace with great customer service. Found a great quote to ship a pallet to Canada and I have been very satisfied. Will use the platform again for sure!

“Easy and Seamless”

We’re a small company that ships across Canada occasionally. It’s not something we do often so we don’t have a dedicated shipping department or the knowledge base that comes from repetition. Freightera makes the process so easy and seamless I’m amazed at the simplicity everytime we ship something. Whether it’s once a year like us or weekly, shipping with Freightera is as easy as a phone call or from your desktop through their website.

“We Love Freightera”

We love Freightera and now only use your services for all shipping inside Canada

FAQ

• I requested a quote but the website is asking me to log in. Do I need to pay for a subscription?

No, an account with Freightera is completely free. Once you’ve created your account you’re ready to start booking.

• I quoted but I did not get any results. What should I do?

Our system is great and has millions of rates for millions of lanes. However, it is not perfect (yet) and in the unlikely event that you’re unable to get a rate online, feel free to contact our helpful staff and we’ll get back to you shortly with an all-in rate.

• Are there any hidden charges?

Absolutely not! We believe that transparency is key to building lasting relationships with our clients. As long as you make sure to quote for exactly what you will be shipping, the rate you see on your screen will be the final charge.

Charges tend to increase only if additional services are required that were not included in the original quote request (such as tailgates, shipping to or from residences, etc).

• I forgot to add a request to my order. Can I fix this somehow?

Of course, if you’ve forgotten anything at all you can reach out to us via LiveChat or by phone, and our team of shipping experts will be happy to assist you in any way possible!

• I ship the same shipment every time. Is there a way to avoid entering the same information over and over?

Yes, of course. For all your frequent shipments we have a “Favorite” option that allows you to re-quote in a matter of just a few clicks.

• I booked my shipment. What else do I need to do?

Nothing. You’re good to go. Just make sure you (or your shipper) have the shipping documents ready once the driver arrives to pick up your shipment.

If everything was done correctly, you don’t have to talk to anyone unless you want to. You can quote, book, pay, and track shipments online on your own.

• I’m shipping within Canada. Why is my BOL showing a class?

Some carriers within Canada use a class system that differs from the one generally used in the US. Your shipment can have a class assigned to it based on density. Our system calculates it automatically based on your shipment’s dimensions and weight, so you have nothing to worry about.

• Where can I reach you if I have any questions?

For any additional questions or help you might need, feel free to contact us via Online Chat or by phone at (800) 886-4870, extension 1 for Client Care. Our 5 star staff is always happy and willing to help!

The post Freight Shipping in Canada: A Brief Introduction appeared first on Freightera Blog.

Freightera CEO Eric Beckwitt Receives Sustainability Award at Clean50 Summit in Toronto

Eric Beckwitt was honored for his contribution to advancing the cause of sustainability and clean capitalism in Canada over the past two years

VANCOUVER, British Columbia, Oct. 1, 2018 /PRNewswire/ — Canadian freight digitization startup Freightera is honored to announce that CEO Eric Beckwitt has just won the 2019 Clean50 Award for his outstanding contribution to advancing the cause of sustainability and clean capitalism in Canada over the past two years. The award was presented at the Clean50 Summit in Toronto on Sept. 27, 2018.

The award winners were selected from more than 600 nominees and competed in 16 categories including Manufacturing and Transportation, where Eric Beckwitt won the award along with Mario Plourde, CEO of Cascades, and Sarah Buckle, director of enterprise risk and sustainability at Translink, the greater Vancouver transit authority. Past honorees include Premier Kathleen Wynne of Ontario, who opened the summit, Canadian Minister of Environment and Climate Change Catherine McKenna, Vancouver Mayor Gregor Robertson, and Galen G. Weston of Loblaws.

Clean50 is one of the most important awards for corporate contribution to environmental sustainability in Canada. This means a lot to everyone at Freightera, an online marketplace that brings together businesses that need to ship freight and transport companies that move it. Freightera’s mission is to make freight easy, accessible, and green.

Global freight shipping, at just under $10 trillion a year, is among the largest markets on earth. It is also one of the most wasteful, inefficient, and polluting industries. Freightera is automating and transforming this global market, increasing efficiency and profitability, and sharply cutting shipping costs and emissions from freight. It is Freightera’s company mission and also Eric’s personal mission.

Eric Beckwitt was born in California but had to flee with the family in 2003 to save his son, who suffered severe asthma in the Sierra Nevada foothills where the Beckwitt family lived. Since then they’ve been living in Vancouver, Canada, one of the world’s greenest cities. Their son has been completely healthy.

According to the Center for Disease Control and Prevention, 8.3 percent of children in the U.S. have asthma. It is one of the leading causes of emergency room visits and causes the premature death of 4,000 people per year in the U.S. alone. In 2016, the science publication Nature noted that air pollution from ocean freight shipping, specifically nitrous oxides, sulfur oxides, and particulate matter, was causing the premature deaths of 60,000 people worldwide. Concentrated in the ports, these deaths are coming mostly from cancer and cardiovascular illness. Independently, researchers with the European parliament modeled that under business as usual, emissions from ocean and air freight, currently outside the UN Climate Change emissions reduction negotiations, would grow so fast that by 2050 they would be 20-50 percent of global emissions.

Eric Beckwitt and his wife, Freightera co-founder Zhenya Beck, did not go green over their son’s life-threatening condition. It was their passion and profession long before that. Eric was involved in conservation in the Sierra Nevada from an early age. Zhenya worked as an environmental journalist in Siberia’s Lake Baikal region in the 1990s.

“We were very aware of environmental health impacts from our work and research, but our son’s asthma made something that we knew as a dry fact a very personal visceral experience,” says Eric Beckwitt. “When we founded Freightera, our mission was to transform one of the most polluting industries on the planet, making it highly efficient and low emission. But how could we do it?”

Freightera focused on filling empty trucks. Thirty percent of the freight trucks on the road are empty and 80 percent are booked only one way. The first success came after Freightera covered North America with the first billion less than truckload (LTL) lanes. Now businesses shipping freight in small towns and remote locations could find the best-priced transport companies with trucks already scheduled to be in their locality when they needed them to take the freight consolidated with others across the country. Freightera brought online many companies that were not previously available to freight shippers and helped many smaller transportation companies build complete digital rates and service areas for the first time.

“We make LTL easy and accessible for small businesses. For most manufacturers the cost of shipping can be the difference between staying alive, making a profit, or going out of business,” Eric added, “We’ve got a very important mission here.”

The other answer was in shifting freight to the lowest emission transportation mode. In the vast Canadian landscape, switching from trucks to rail makes a ton of sense. Rail produces 60 percent less emissions. With good advanced planning, it’s also a more beneficial, less expensive way for businesses to ship goods.

In 2016, Freightera was invited to write the thought leadership article A Green Future for Freight for the G7 Summit edition of Climate Change – The New Economy. That work led to Freightera’s invitation to present options for greening freight at the COP22 UN Climate Conference in Marrakesh and collaboration with SmartWay Canada to promote more efficient, lower emission carriers. Ironically high energy efficiency leads to lower costs and lower emissions and it is exactly what carriers and society need. Eric Beckwitt has also been researching, finding, and promoting other climate-friendly solutions.

Freightera has signed all Class 1 rail carriers in Canada and the U.S. and brought online rail rates from CN Rail, one of the long-term supporters of Clean50 Awards and their sustainability mission. Over 80 percent of Freightera bookings are now SmartWay or rail. In recent months, up to 22 percent of lower emission bookings were via CN and CP rail partner carriers alone, with Union Pacific coming online shortly.

Freightera found that shippers will change to lower emission options immediately if these options are lower cost. They believe this fact will encourage transport companies to invest in new lower fuel consumption or zero-emission vehicles that are lower cost to operate, more efficient, and allow them to offer lower-cost services and grow market share. It also encourages more firms to use rail for long-haul freight and not drive partially filled trucks across the continent.

“I would like to thank Delta Management Group and the Clean50 Awards committee for the recognition,” said Eric Beckwitt, “I’m humbled by the honor and excited about the opportunities to expand our network to the Clean50 community and beyond. This is a great opportunity for us to spread the word and invite other companies, carriers, and shippers committed to sustainability and greening their supply chains to work with us.”

“Most people know that climate change and global warming pose serious threats to agriculture, coastal cities, and populations in the near future, but day-to-day economic reality makes it difficult to implement the needed changes in technology and behaviors. But if we focus on increasing efficiency, reducing fuel and energy use, cutting waste, and reducing air pollution, we get all the benefits today and reduced greenhouse gas emissions is a welcome side effect.”

About Freightera

Freightera is creating a unified global marketplace for freight shipping. Starting in North America, Freightera is automating freight transportation and increasing operating margins for carriers and businesses shipping freight. Freightera creates partnerships and systems and promotes new technologies that allow businesses to find the best price and lowest emission transportation options. Over 8,000 manufacturers, distributors, wholesalers and retailers in the U.S. and Canada use Freightera for 24/7 online access to billions of all-inclusive freight rates and instant freight booking. For more information, see freightera.com.

About Clean50

Canada’s Clean50 award program and summit were founded in 2011 by Delta Management Group, Canada’s leading cleantech and sustainability executive search firm, and their CEO Gavin Pitchford. It was established in response to a trend the firm noted when performing executive searches on behalf of clients: While there was growing acknowledgment that climate change was real and that broad solutions were needed, most were working within industry silos and not sharing information with anyone. Having identified the issue, Delta created the Clean50 award to identify leaders from every sector and then hosted the summit to bring those leaders together. Ninety-eight percent of honourees attend each year and numerous past winners come back to continue to play a role in deliberations, learn new things, and get inspired one more time.

Including small teams and Emerging Leaders, The Clean50 now numbers over 500 of Canada’s climate change fighting rock stars, and the summit has led to numerous cross-sector and within-sector collaborations. In addition, the honourees’ stories have inspired hundreds of Canadians to do more and, in many instances, simply copy what the honourees had already proven could be done.

Photo: Eric Beckwitt, Freightera CEO, at the Clean50 Awards ceremony with the other winners in the Manufacturing and Transportation category: Mario Plourde, CEO of Cascades, and Sarah Buckle, Director of Enterprise Risk and Sustainability at Translink. Clean50 CEO Gavin Pitchford presents the awards.

Read more about Freightera’s green freight mission.

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