What is Direct Freight and Freight Rates?

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In business, one of the areas in which companies are consistently trying to control cost in is their transportation and shipping cost. It is imperative to be aware of the different shipping methods available in order to be competitive in today’s market place. Direct Freight is an excellent way to control cost, otherwise known as freight rates or pricing.

In the freight transportation business, the terminology of “Rate” and “Price” basically mean the same thing. Rate is determined by how quantity or weight of the load being shipped, the quality or risk of the load, and negotiated contracts. Obviously, how far and how much a company ships would affect the shipping price; however, with LTL shipping the product being shipped also matters. In LTL loads, if a product is highly fragile or hazardous or requires special attention, the shipping rate will be directly affected. For these reasons, finding a freight company that is best suited to the individual company that is shipping their products is a necessity to keep cost under control. One way to do this is using Direct Freight services.

Direct Freight is a method of matching clients that need their products shipped to drivers and shipping companies willing to transport their materials at very good rates. There are websites designed that will facilitate in matching companies to shippers. The company wishing to move their load can join the site to list their freight. They enter specific details such as what types of goods are being shipped, how much, and the transportation destination. While many trucking companies prefer to carry full truckloads, there are plenty who will do LTL shipping. LTL shipping can save small companies from the expense of filling an entire truck shipment to haul their load.

Drivers and trucking companies looking to pick up loads can also join these match making Direct Freight shipping sites. They pay a minimal fee to gain access to a database which shows the freight available for shipping. They can provide information about their particular company, their equipment, and their drivers. The trucking company then essentially bids or comes to an agreement with the manufacturer on the particulars of shipping their items. The clients needing to ship their load can decide which trucking company offers the services and equipment that they need.

Loads as small as one pallet up to and including 35,000 tons can be posted. This service is very valuable because it encourages competition. When companies compete, then there is often price savings that follow. Another benefit of this service is that a company does not have to pay to ship an entire truckload, if they do not have that much inventory to move. They can also examine the shipping company and decide which company is offering them the services and pricing that they require.

Likewise, trucking companies can manage their loads and optimize their profits by coordinating shipments. With an ever more competitive environment, freight companies are using various methods to stay competitive. Not to mention, higher fuel cost mean that every mile is important to the trucking company.

Understanding freight rates is only half of the battle to making shipping cost effective for any business. The other factor is being able to benefit from competition between the shipping businesses. Clients that need trucking services can easily list their freight and then receive an acceptable offer or lower cost by utilizing LTL shipping. The same service also greatly benefits many trucking companies because they can see which freight is available and where they need to go. Direct Freight services are a valuable asset to help both shippers and truckers reach their goals

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Source by Mike Barone

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