Shipping Cost Calculated

How is shipping cost calculated? 

This is the question of every starter. Our experts have handled thousands of eCommerce shipping cases in a decade. We share experiences and tips in this guidebook. After this, you calculate shipping costs and save money with valuable tips. 

Keep reading to understand and calculate shipping costs. Easy to negotiate with better understanding. 

What is shipping cost?

In simple words. 

“The cost of shipping inventory from the supplier’s warehouse to yours.”

Here are the major expenses included in the shipping cost

• Packaging
• Customs fees
• Shipping company charges
• Shipping method & transportation charges

First and foremost, your packaging is necessary to protect products during shipping. Now second is your customs clearance fee. It also includes paperwork. After that, your shipping method(Air, sea, or trucking). 

In the end, your shipping company charges who handles all these operations. Some additional costs like warehousing and special handling also add up. 

What factors affect the shipping cost?

Shipping costs are variable and affected by fuel costs and inflation. Some factors affect the most while calculating shipping costs. Here are a few of them. 

1. Shipping size

Larger the shipment, the more space it takes. Big & heavy shipment affects your shipping costs. Package dimensions and weight are the biggest factors while calculating shipping costs. It includes the package’s length, width, & height, along with the actual weight. So better to use light materials for low package weight. 

Pro tip: Use shipment optimization service before shipping. It lowers the weight of the package. Saves money on expensive shipping with the small box size. 

2. Shipping method

Every shipping method has different costs due to labor and infrastructure. Also, different speeds as well. Rail is not a good option for international shipping. Yet, here are the two most important for shipping internationally. 

• Air shipping: It is expensive and the fastest shipping method. Normal Air shipping from China to the US takes 5 to 8 days. They charge based on shipment size and weight. Prefer for medium size urgent shipping with good profit margins. 

• Sea shipping: Cheapest and slow shipping. Two famous routes are from China to the US, with different costs and transit times. They charge based on container size for FCL. LCL charges are according to your space in a shared container. Prefer all items with slow shipping. Not best for time-sensitive products. 

3. Location and distance

Your shipping destination country has a direct link to the shipping charges. Also, distance and shipping zones are a part of this equation. Labor, fuel, and transportation charges differ for every shipping zone. Use short routes to keep shipping costs low. Companies charge customers for every different shipping point. 

4. Extra costs

Packaging, inspection, warehousing, and consolidation are all part of the extra costs. Most shipping companies offer some of these services for free or at good rates. Yet, some non-credible companies charge more for these services. Discuss these services briefly in your agreement to save Hidden fees. 

How to determine shipping costs?

Here is how to determine your exact shipping costs. 

Step 1: Calculate your package’s dimensional weight Use a scale and measuring tapes. Add these values to an online dimensional weight calculator. 

Step 2: Carrier companies have online calculators for ease. Use anyone’s online shipping cost calculator to get ideas. Most of them ask about your dimensional weight and location. 

Step 3: Give your extra details and get the cost calculation. Remember that the final cost differs from the online cost due to many factors. It does not add customs (Expert/import taxes) and fee charges. 

Step 4: Now go to B2B marketplaces or search engines. Search with relevant keywords. Filter out these companies with your requirements. Share your details with them and get a quote. 

Step 5: Now compare different rates and start negotiating. Better to offer them a long-term deal with good trade terms for both sides. If they don’t negotiate well on main services, ask them about extra services. Inspection or repackaging are generally cheap. Negotiate on those services. 

Confirm your shipping costs at the end. Discuss the complete shipping strategy. You get the final shipping rates with all things included. Customs and shipping insurance are separate. Yet, they do custom handling and include it in shipping plans.

How is the shipping cost calculated?

Shipping-related charges depend on various factors (We explained them above in detail). Well, you use many ways to calculate your shipping costs. Here are a few best of  them: 

• Online calculators: Many carriers have shipping calculators. You put your values in them, and they give you instant calculations. Values include package weight, dimensions, location, and shipping options. 

Also available timeline for peak and off seasons. This does not include handling fees or customs taxes. Also, extra prep services. This is an instant way to get an idea about costs. 

• Shipping rate charts: You get shipping charts online. It has cost estimation based on weight and distance. Flat-rate service providers use shipping rate charts. Again this does not include any extra services, and final costs differ. 

Go for updated shipping charts with updated rates. Good to get flat-rate shipping. Confirm these rates with your carriers at the end. Every business owner has simple and cubic pricing charts with fixed costs. It saves time for estimation. 

• Direct quotations and negotiation: Direct contact with any shipping company is more accurate. Use B2B platforms like Alibaba or Google to find shipping companies. Share your shipment details and ask for quotations. 

They entertain special handling. Ask for special parcel handling-related charges. Get customs fee ideas through customs charts. Negotiate your charges with extra services. You get the final cost with different price points. 

Pro tip: Discuss extra services in detail to save from hidden costs at the end. Better to buy Shipping insurance separately. Always go with an agreement and pay through a third-party payment gateway. 

FAQs about How Is Shipping Cost Calculated

What’s Next

Large shipment sizes have more cost. Also, it takes more space for storage and handling. Resulting in high costs for you. Many businesses don’t know how to optimize their shipping process. 

Saves you money in both the short and long term with fast shipping. Only skilled and experienced staff helps you with shipment optimization. 

LEELINE has been helping eCommerce merchants to optimize their supply chain. Contact us to discuss your shipment optimization strategy. Low shipping price and fast delivery times.