Freight Cost & Chargeable Weight
Carriers bill on chargeable weight, not actual weight, and each mode uses a different volumetric divisor. This works out what you will actually be charged on each mode — and adds the pipeline inventory cost, which is what makes slow modes less cheap than they look.
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Chargeable weight, and the divisors
For per-kg quotes, this model uses the greater of actual and volumetric weight. Flat-trip quotes use the quoted shipment price instead. The divisor differs by mode, and getting it wrong is how a quotation turns into a surprise.
Density is the number that decides everything
Work out kg per cubic metre. Below about 167 kg/m³ you are volumetric on air freight and will be billed for space you are not using — the fix is better packing, not a better rate. Above it you are billed on actual weight and packing improvements save you nothing. Knowing which side of that line you are on before opening a rate negotiation is worth more than the negotiation.
Why slow modes cost more than the rate suggests
Sea or rail may be a fifth of the road rate, but the consignment spends far longer as capital you own and cannot sell. On a ₹18.5 lakh consignment at 12% cost of capital, each extra week in transit costs roughly ₹4,270. Over a three-week sea leg against a three-day road move, that is around ₹11,000 of hidden cost — usually still far less than the freight saving, but it should be in the comparison, and it rarely is.
The larger hidden cost is the safety stock a longer, more variable lead time forces you to carry permanently. That is a recurring cost, not a one-off, and it is often bigger than the transit capital — the safety stock calculator will show you by how much.
Common mistakes
- Quoting on actual weight for light, bulky goods. A budget built on actual weight for a volumetric consignment will be wrong by a factor of two or more, every single month.
- Measuring the goods, not the pallet. Carriers measure the outer cube including pallet and overhang. Wrap, then measure.
- Assuming one divisor everywhere. Indian surface carriers vary between 4,500, 4,750 and 5,000, and some use a per-CFT rate instead. Get it in writing in the contract.
- Comparing modes on freight rate alone. Transit time, damage rate, reliability and the safety stock consequence all belong in the comparison.
- Ignoring minimum chargeable weights. Most carriers apply a floor per consignment. On small shipments that floor, not your rate, is what you actually pay.
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