What is a freight rate?
A freight rate is the price charged to move cargo from one place to another. It looks like a single number on the invoice, but it’s built from several layers: a base rate, surcharges, accessorial charges, and sometimes a margin on top.
Understanding how a freight rate is built is the difference between selling transport at a profit and selling it busy.
How a freight rate is typically built
Base rate
+ Fuel surcharge
+ Toll surcharge
+ ADR / equipment surcharge
+ Wait time
+ Other accessorials
= Final freight rateEach line is either contractually fixed or calculated per shipment.
Common pricing models
| Model | How the rate is calculated | Typical use |
|---|---|---|
| Per kilometre | Distance × €/km | Domestic FTL, dedicated transport |
| Per kilogram | Weight × €/kg | Air freight, parcel, some LTL |
| Per cubic metre (m³) | Volume × €/m³ | LTL, groupage |
| Per pallet | Pallet count × €/pallet | LTL, distribution |
| Per shipment / flat rate | Fixed price | Short fixed lanes, e-commerce |
| Zone-based | Origin zone × destination zone | Distribution networks |
| Lane-based | Fixed price A → B | Long-term shipper contracts |
A serious operator usually combines several — e.g. a zone-based base rate plus a fuel surcharge plus accessorials.
Surcharges that matter
- Fuel surcharge (BAF) – tracks diesel price index, often updated monthly.
- Toll surcharge – passes road tolls (LKW-Maut, etc.) to the customer.
- ADR surcharge – for dangerous goods, extra training and equipment.
- Equipment surcharge – reefer, mega-trailer, tail-lift, crane.
- Wait time / demurrage – per hour after a free waiting window.
- Stop charge – per extra pickup or delivery beyond the first.
- Cancellation fee – for orders cancelled too late.
Hiding any of these inside the base rate is a fast way to lose margin without noticing.
Chargeable weight vs actual weight
For light, bulky cargo, carriers charge on chargeable weight = max(actual weight, volumetric weight). The volumetric divisor varies by mode:
- Road LTL: typically 1 m³ = 333 kg.
- Air: typically 1 m³ = 167 kg.
- Sea: 1 m³ = 1000 kg (1 tonne) for some lanes.
Always check which one the contract uses — it’s the most common source of invoice disputes.
How a TMS supports rate management
- Tariffs stored per customer, lane, zone or product.
- Automatic surcharges applied per shipment based on rules.
- Cost vs revenue visible per shipment, so margin is real-time.
- Quote-to-order copy so the agreed rate flows through without re-typing.
In Routix, this lives in Tariffs, Zones, Quotations and Cost & Revenue.
Related concepts
See this in Routix
To see freight pricing applied operationally, start on www.routix.com and then go to Tariffs, Zones, Quotations and Cost & Revenue. That combination in Routix is where rates, surcharges and realised margin meet.
