In order to be able to tell your customers how much they will pay for shipping, or when to expect delivery, you need a way to calculate the costs and know the options for all shipment sizes.

Getting this right is crucial to recouping your costs while keeping your customers happy – by setting the right expectations and avoiding errors that could cause you to absorb the additional fees.

Here’s how you can calculate the freight charge by rating shipments.

Rating Shipments

Rating is the process of estimating the freight charge associated with any given shipment. Rating capability should be incorporated into your company’s online Transportation Management System (TMS), if it has one, and linked with the order processing system.

This will enable you to inform your customers of shipping charges and estimated arrival times. Many carriers have websites that provide rates to shippers.

Electronic Shipment Bidding (ESB) allows shippers to post shipment details, such as origin and destination, weight and volume, and the required delivery window on an electronic bulletin board.

Carriers monitor this bulletin board and bid for the shipments that appear the most attractive. With ESB, all bids are placed and accepted electronically. For organizations trading internationally, this system can dramatically reduce the time spent obtaining rates.

To gain a realistic understanding of available rates, a shipper should obtain a wide variety of rate quotations for the same export transaction.

The shipper should also undertake an internal costing exercise to obtain a rough estimate of the costs involved, although such an exercise usually requires considerable resources and might be beyond the means of small- and medium-sized shippers and exporters.

Want to learn more about how to decide the best method of transportation based on cost, delivery time, risk, product quality and overall efficiency? Check out the FITTskills International Distribution online workshop!

Weight Break

A shipment’s weight break is the point at which the weight of a shipment is large enough to be assessed at lower freight rates that are applicable to larger shipments, as per the carrier’s tariff.

To calculate the weight break, use the following formula:

(B X D) / C = X

Where:

• X is the weight break, the point when the higher rate is charged based on weight
• A is the weight of the lower rate bracket (example 1M = 1,000)
• B is the weight of the next highest rate bracket (example 2M = 2,000)
• C is the freight rate fee for A
• D is the freight rate fee for B

Example:

1A/ 58.21   2B/ 49.39 translates to:

1000/58.21         2000/49.39 translates to:

A/C       B/D

If (B X D)/ C= X then (2000 x 49.39) /58.21= 1696

This formula provides information for weight-based freight rate calculations. Many companies use volume calculations and will select whichever rate is higher.

As freight charges are calculated automatically using computer programs many companies’ websites allow shippers to input freight dimensions, including weight, which provides the freight charge or a very close estimate of the charge for their shipments automatically.

The post How much will your freight charge be? Here’s how rating shipments works appeared first on Trade Ready.

Julie Nowe, CITP®|FIBP®, CGA, is the Finance and Business Development Manager for Big 8 Beverages, a subsidiary of Sobeys.

She has risen through the organization over the past several years by combining her financial expertise with the international trade skills she gained by taking FITT courses.

Julie has big future plans to develop relationships for the company in new foreign markets.

Julie started the ascent to her current role with Sobeys Atlantic Finance in 2005. After three years in her role there, she was able to use her experience to transfer to Big 8 Beverages—producer of Sobeys Atlantic’s private-label spring water and soft drinks—and earn the position of Finance Manager.

In 2013, however, Big 8 Beverages started producing its own 500ml bottles, which reduced its costs significantly.

With the nearby Halifax port offering an excellent method to distribute its products internationally, and the new competitive pricing, the company saw an opportunity  to make inroads internationally.

While looking into what she could do to help the company learn to export globally, Julie came across FITT’s International Trade Research course and decided to take it. After completing the course and finding it both helpful and beneficial to her work, she decided to take the rest of the courses as well.

Julie was able to apply what she learned along the way and use those skills to export to several countries, including China, Barbados and Aruba.

Her new skills and international trade expertise have also helped her to earn her current title, which reflects her professional growth and expanding responsibilities.

“Becoming export ready has been a journey, as it takes time to understand the target market, logistics, financial, legal and overall knowledge of international trade,” she says.

The FITT courses have given me the skills and confidence to take Big 8 Beverages to the international market.

Julie is continuing to eye global expansion opportunities, and is hoping to develop the company’s relationships further in China and the Caribbean, as well as make inroads in the Middle East.

For Julie, earning her CITP®|FIBP® is an important next step in her career and a source of pride.

Applying for the CITP was a natural progression after completing the courses and getting the international experience.  Having both the CGA and CITP designations is a tremendous professional and personal accomplishment as I am a single mom of two daughters.

The post Julie Nowe, CITP|FIBP, CGA — Finance and Business Development Manager appeared first on Trade Ready.