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Understanding Freight Rates

Freight rates are the prices of shipping goods from one place to another. These rates can vary significantly, but knowing the patterns they follow will help you understand when to ship.

We’ve created a quick guide of some frequently asked questions to help you understand freight rates and how they work. 

How are freight rates determined?

Freight rates are determined by many factors, including when and where the freight is shipped, weight, size, mode of transport, handling characteristics, tariffs, and other fees.  

Supply and demand is one of the biggest factors that influences these rates. For example, we all heard about the supply chain issues that came along with COVID-19. The pandemic decreased the number of people travelling, which reduced the number of flights transporting goods. Shipping demands increased as people were unable to deliver goods in person, especially over the holiday season. 

Many freight companies pivoted towards relying more on ocean and land shipping due to less frequent flights. As a result, land and ocean shipping also increased rates. 

If you’re not sure how this will affect your freight rates, talk to your customs broker. They’ll help you determine exactly how fees will be applied to your goods. 

What are tariffs?

Tariffs are a type of tax implemented on goods that come over the border. When there’s more traffic at the border, or more demand for shipping, countries will increase their tariffs, just like other shipping costs. 

What documentation do you need?

Ask your customs broker to double check that you have all of the documentation for the goods you’re shipping. By ensuring you have the necessary documents and licensing ready before you begin the shipping process, you avoid charged fees for not having them. You should also familiarize yourself with the rules and regulations of the countries on both the receiving and shipping end of your goods to make sure you don’t miss anything. 

Understanding the processes and factors that go into determining your freight rates prepares you for your next shipment and keeps costs low, which is better for your business. If you know the process, you’re not blindsided when prices change and challenges arise during the shipping process. 

Should I hire a customs broker?

Yes! It never hurts to have someone on your side who knows what they’re doing. A customs broker will have all the fine details about freight rates and documentation, so you won’t have to worry about missing anything. When you work with a great customs broker like Welke, we’ll help you determine accurate shipping costs so you can budget for your business and keep costs as low as possible.


Now you know the basics of freight rates. Ready to start shipping? Contact us to get a quote.

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