Shipping and freight

Carriers do not sell weight. They sell space that happens to be priced in kilograms. Once you understand that, most surprises on a freight invoice stop being surprises.

Tools in this section

Volumetric Weight Which weight the carrier bills you on — and what it costs.
Pallet Calculator Cartons per pallet, pallets per container, and which limit binds first.
Safety stock and reorder point The stock level that should trigger the order — and how much cushion it needs.

Why your invoice does not match your scales

A truck, an aircraft and a container all run out of room before they run out of payload. A carrier that charged purely by weight would give away most of its capacity to anyone shipping cushions or lampshades, so every carrier converts volume into a notional weight and bills whichever figure is higher.

The conversion factor — the divisor — is not fixed by law. It is a line in your contract, and it is negotiable if your volumes justify it. Moving from 5000 to 6000 lowers the billed weight on every bulky shipment you send by 17%.

Packaging is a pricing decision

For light, bulky goods the box dimensions matter more than anything inside them. Two centimetres trimmed from each side of a carton is a few percent off the chargeable weight of every parcel you send for the rest of the year — usually a larger saving than any rate negotiation you are likely to win.

Each mode of transport measures you differently

There is no single formula, because each mode runs out of a different resource first.

  • Parcel divides length × width × height in centimetres by a divisor set in your contract — commonly 5000, sometimes 4000 or 6000. The lower the divisor, the more you pay for bulk.
  • Air freight conventionally uses 6000, which is the same as saying one cubic metre is treated as 167 kg.
  • European road groupage largely ignores volume and charges for floor space: the loading metre, one metre of trailer length across its full width. A tall narrow pallet and a short narrow pallet cost the same.
  • Sea freight charges by the container once you fill one, and by the greater of cubic metres or tonnes when you do not.

The practical consequence is that the cheapest packing arrangement is different for each mode. Optimising a carton for parcel economics can make it wasteful on a pallet, and stacking for a trailer is not the same problem as stacking for a container. The pallet calculator does the second of those arrangements for you.

The surcharges are where budgets actually break

The negotiated rate per kilogram is the part everyone compares. It is rarely the part that ruins a quarter.

Fuel surcharges float monthly and are applied as a percentage of the base rate, so they scale with everything else. Remote-area and residential-delivery fees are flat amounts that can exceed the shipping cost itself on a light parcel. Oversize and non-conveyable handling fees trigger at thresholds that a single long dimension can breach. Address correction, redelivery and storage each carry their own charge.

None of these appear in the rate card you compared when choosing the carrier, and together they routinely add ten to twenty-five percent. When comparing quotes, ask for the surcharge schedule rather than the headline rate — and check which of your destinations the carrier considers remote, because that list differs sharply between carriers serving the same country.

The levers that are actually yours to pull — the box, the divisor, the rounding boundary, who pays for delivery — are gathered in how to cut shipping costs.

Reading

DDP or DAP The cheaper quote is often the one where somebody else keeps your VAT deduction.
Cutting shipping costs Most of the saving is in the box, not in the rate negotiation.
What holding stock costs The warehouse invoice is the small part. Here is the rest of the bill.
Pallet and container loading The theoretical capacity and the loaded capacity are different numbers, and the gap is where quotes go wrong.

The vocabulary of this section

Incoterms The eleven delivery terms that decide who pays freight and who carries the risk.
Shipping terms How freight is measured and charged, and what the words on the invoice mean.
Inventory terms The numbers behind when to reorder and how much cash is sitting on the shelf.

Frequently asked questions

Because carriers sell space, not weight. They convert the box dimensions into a notional weight and bill whichever is greater, actual or volumetric. For anything light and bulky the volumetric figure wins, and it is the box that decides it rather than the contents.

It is the number that turns centimetres into kilograms: length × width × height divided by the divisor. Parcel contracts commonly use 5000, air freight conventionally 6000. It is not set by law — it is a line in your contract, and it is negotiable once your volumes justify it.

Usually one large one, because most of the fixed charges apply per parcel rather than per kilogram. The exception is when a single dimension pushes the shipment over an oversize threshold, at which point the surcharge can exceed the saving.

Surcharges. Fuel floats monthly as a percentage of the base rate; remote-area, residential, oversize, address-correction and redelivery fees are added on top. Together they routinely add ten to twenty-five percent, and none of them appear in the rate card you compared.

Official sources