How Do Delivery Companies Set Their Rates?

There are several factors that go into determining the rates a Chicago delivery service will charge to deliver your package. These factors are the same for every company. That does not mean, however, that every company charges the same rates. It only means that they consider the same factors and go through the same process to come up with a price.

Fuel and labor are the two biggest costs in the delivery business. Fuel charges can vary depending on where in the country a delivery company operates. Large companies that deliver all over the country are able to negotiate fleet rates with some of the multinational fuel companies on order to keep their prices at a manageable and predictable level. Delivery companies also can institute a fuel surcharge when gas prices rise above a certain level so that they can continue to operate profitably. If your company uses these surcharges, they will let you know.

Labor costs include paying the delivery drivers. Drivers are often contractors, and not actual employees of the company. This keeps the delivery company from having to offer certain benefits. These benefits are available to drivers through the truck drivers' union.

The size and shape of a package also help to determine the shipping costs. Size and shape are what is used to assign a freight class to each package. These freight classes are set up by a national agency. The companies then establish rates according to these freight classes. So, the classification of your shipment will greatly affect the price you will be charged for delivery.

The weight of a package also has a bearing on how much a company will charge for delivery. Weight can affect the gas mileage of delivery vehicles. Most vehicles are also limited according to the amount of weight that they are allowed to carry. Heavier items on a vehicle mean that fewer items can be shipped on that vehicle. Reducing the amount of items on a truck reduces the potential profit for the delivery company, so heavier items cost more money to ship.

Although Chicago delivery service companies consider the same things when determining their shipping rates, their prices are not the same. Other factors like company overhead also must be considered in determining shipping rates. It is still important to shop around to make sure you get the best rate available for your shipment. Prices can vary greatly between delivery companies.