- Rates are determined differently by each mode of intermodal transportation.
- When looking into shipping, be sure to research which mode of transportation is best for the weight and size of your cargo.
- Freight rates will increase and decrease depending on supply and demand.
If you’ve been keeping up with our industry insights, you know that intermodal transportation plays a vital role in global trade. Because of this, it’s important to understand what intermodal freight rates are and how they’re determined.
What are freight rates?
So, you may be asking yourself, “what is a freight rate?”
These rates are the price charged to companies for transporting their cargo from one place to another using any form of shipping transportation. They’re usually determined by a number of fluctuating factors like supply and demand, type of goods, weight and size, distance traveled, and the mode(s) of transportation used.
What affects freight rates?
One of the primary factors that affect intermodal freight rates is supply and demand. This means that in times of high demand and limited capacity, freight rates will begin to reflect this by rising. On the other hand, if there is excess capacity and low demand, the freight rates will mirror this and begin to lower. The distance traveled is another determining factor for intermodal freight rates. This is because the transportation provider needs to offset the higher costs of fuel, labor, and other expenses for longer trips.
Another factor that affects intermodal freight rates is the type of goods being transported. Due to their weight, size, and other unique characteristics, certain goods can be more expensive to transport. For example, hazardous materials require special handling or storage and perishable goods require refrigeration or temperature control, both of which increase the cost of transportation.
The mode of transportation used is also a factor in determining these rates. Intermodal transportation often involves multiple modes of transportation – trucks, trains, and ships – each of which determine their pricing by different means such as weight, per-mile, per-lane, and so on.
By gaining a deeper understanding of these factors, you can determine the best mode of transportation for your cargo, optimizing your bottom line and helping your business remain competitive in the local and global marketplace.
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