Learn how container loading and freight rate calculators can revolutionize your shipping operations. Optimize space utilization, reduce costs, and streamline your logistics process.

 

 

Calculating the container loading capacity is important if you want to assess your total cost and tonnage efficiently. If you’re a logistics provider, freight forwarder, or carrier, you cannot keep your business right on the booking without planning. This part solely includes container loading. You are estimating your cargo shipment more precisely, making your business more efficient considering that the U.S. Department of Transportation said that in 2022, U.S. rail intermodal volume grew from 9 million containers and trailers in 2000 to 14.5 million units in 2018. We might as well say “Well, the numbers speak for themselves.”, and the need for efficient loading should be considered even more.

What does all of this really mean? Simply put, you can expect that the need for efficient container loading will continue to grow even higher. More routes, more containers, and so on. Therefore, to keep outbound processes running smoothly, companies are investing in load planning software with a load calculator that can estimate multiple shipments for various routes and modes of transport. This is how simple it is, and in this article, we explain why it all matters for logistics and the supply chain. Let’s buckle up and jump into more insights we’ve prepared for you based on the most recent figures in the US and EU markets.

 

What is a freight rates calculator? Get your freight shipping costs

A freight rates calculator is a digital tool that estimates shipping costs based on specific shipment details. Logistics companies use it to estimate the cost of shipping based on tonnage, cubic meters, and the type of cargo. Its role is to simplify the process of getting freight quotes as well as eliminate the need for manual calculations and time-consuming quote requests.

 

 

Here are the three factors used for rate calculation:

Distance Travelled While Loaded

This metric measures the percentage of total distance a vehicle covers while carrying cargo. It indicates the vehicle’s utilization efficiency.

It can be calculated by using this formula: Distance traveled while loaded (%) = (Distance traveled with cargo / Total distance traveled) * 100

Load Factor for freight costs

The load factor is a ratio comparing the actual cargo weight to the vehicle’s maximum carrying capacity. It assesses how efficiently the vehicle’s space is utilized.

This factor can be calculated with this formula: Load factor (%) = (Average tonnage / Carrying capacity) * 100

Utilization Rate with freight calculator

This metric combines the distance traveled while loaded and the load factor to provide a comprehensive measure of transport efficiency. It reflects the overall effectiveness of vehicle usage.

This formula can calculate this rate: Utilization rate (%) = Distance traveled while loaded (%) * Load factor (%)

As you may see, we’re talking about software that calculates cost based on the above factors. We may reflect on these elements to outline how they work when we look closer at them.

Typically, freight rates calculator software requires you to input the following information for a rate calculation:

• Shipment dimensions: This includes the length, width, and height of the cargo, often provided in cubic meters.
• Weight: The total weight of the shipment.
• Origin and destination: This simply refers to the shipping address.
• Shipment type: Full truckload (FTL), less-than-truckload (LTL), air freight, ocean freight, etc.
• Additional services: Other services might be necessary to assess high-risk, high-valued goods, which mostly involve factors such as insurance, customs clearance, or expedited delivery.

Different carriers use different rates, but most of them operate on very narrow margins. This means that if you have one destination for a certain shipment, rates can vary around 10 cents or a few dollars, depending on where your business is located. Here, you can see an example of a freight rate charge estimator from DB SCHENKER (data from 2020).

 

 

Nevertheless, it isn’t so easy as freight costs cannot include only dimensions and tonnage. For bigger companies, some other factors and costs affect the entire freight rates. Here are some of them:

Fixed Costs

• Asset-related expenses and total costs
• Insurance
• Interest (for international shipping, domestic, etc.)
• Maintenance

Variable Costs

• Fuel surcharges
• Supplies
• Additional maintenance

Personnel Costs

• Wages
• Benefits

Operational Costs

• Infrastructure usage
• Administration
• Overhead

Some of the annual cost figures (average price) for international and domestic shipments can be calculated by using these formulas:

• Total Annual Cost = Fixed Costs + Variable Costs + Staff Costs + Mode-Specific Costs + General Operating Costs
• Cost per Kilometer = Total Annual Cost / Distance Travelled (km)
• Cost per Tonne-Kilometer = Total Annual Cost / (Distance Travelled (km) * Average Tonnage)

To make it as easy as possible and avoid additional costs, admin clerks often complete this process using software solutions such as a Transportation Management System (TMS). However, this process cannot be completed without utilizing a truckload calculator, which most logisticians refer to as container-loading software.

In similar cases, the load calculator is the sole module of the TMS. However, it works more efficiently if the load planning software works as a separate system that can eventually be integrated with a TMS.

 

How Does Container Load Planning Software Work?

Load planning software is a type of application designed to optimize trailer and container layouts for better cargo utilization. Its primary use is for optimizing shipments within vehicles such as trucks, containers, or in some cases, airplanes. It’s a key tool for logistics and supply chain management when used by outbound clerks as it helps maximize space efficiency and provides other benefits that can influence transportation costs. This is how load planning software affects freight calculation costs. By using it frequently, we can adjust cargo loading times in real time and truly maximize the free space when shipping. Therefore, you experience lower shipping costs for cargo.

 

 

In short, here are the key functions of shipment planning software:

Load planning: Its absolute basic feature allows for creating efficient load plans based on cargo dimensions, weight, and quantity.

Space optimization: This feature maximizes the use of available space within the vehicle, reducing empty space and transportation costs, regardless of the size of the container or trailer.

Weight distribution: Container load planning software ensures proper weight distribution within the vehicle to comply with safety regulations and to prevent damage.

Documentation output: Depending on the type of software, one of its features may be to help create loading plans, packing lists, and other necessary documents. If you have the same cargo for a specific shipment destination, you can also print the container layout and set it on the wall. This will help the packers quickly check how to load the truck or container.

Integration with other systems: Container load planning software can connect with warehouse management systems (WMS), transportation management systems (TMS), and other logistics software to provide the most accurate shipping calculation. Moreover, integrations are crucial for a smooth data exchange.

 

Container load: estimation for various cargo types

As we said earlier, container load planning software can solve the problem of rate calculation by giving more accurate shipping price-oriented results when it comes to filling the container. Along with that, it is best to pay more attention to the mode of transport and the uses of shipping containers. For many transportation companies in logistics and supply chains, the incorrect usage of shipping containers is affecting freight rates.

There are four common types of cargo:

Dry Bulk

Dry bulk cargo refers to unpackaged goods transported in large quantities. Common examples include grains, coal, iron ore, and cement. These materials are typically carried in specialized vessels with large holds and are loaded and unloaded using conveyor systems or cranes. In some cases, dry bulk cargo can also be containerized.

Liquid Bulk

Liquid bulk cargo consists of goods transported in liquid form. Examples include crude oil, chemicals, and vegetable oils. These substances are carried in specialized tankers equipped with large tanks. The loading and unloading process involves the use of pumps and pipelines. In some cases, liquids can be carried within containers of different types of trailers.

Break Bulk

Break bulk cargo comprises items that are too large or irregularly shaped to be containerized. This category includes project cargo such as machinery, industrial equipment, and oversized vehicles. These goods are typically transported on multi-purpose vessels and require labor-intensive handling for loading and unloading containers.

Containerized Cargo

Containerized cargo involves packing goods into standardized containers for efficient transportation. This method is widely used for various products, from electronics and clothing to industrial goods. These items are loaded into various types of containers and are transported by ships, trains, and trucks, offering significant advantages in handling and security.

At this point, it is important to highlight that demand forecasting is an important element for loading. Demand forecasting helps assess the total amount of container or trailer shipments by modeling and evaluating them.

In that case, we can take the example of Lantmännen, one of Nordic’s largest companies in food, energy, and machinery. The company owns 1300 separate ships. It became a subject of research by Frans Kaltea and Joel Odland from the Division of Engineering Logistics, Faculty of Engineering in Lund, Sweden. They outlined that the key factors Influencing Freight Rates are as follows:

Freight rate composition is determined by two main factors:

• Actual Cost: This refers to the expenses incurred by shipowners for providing the shipping service.
• Current Market Situation: This is largely influenced by the balance between supply and demand, which affects shipping companies’ profit margins.

Based on this research, we can refer to container load planning software. This element influences the actual cost of freight. Everything starts with loading containers at the warehouse dock. Utilizing software can help you achieve a lower number of containers being shipped. This is even more important for sea cargo than inland, as ocean freight can be more costly. While we are trying not to be too fast with the conclusion, we may state that overall shipping costs can be lowered by utilizing container load planning software.

 

Container and truck load calculator: why should you use container load planning software?

The E.U. Intermodal Freight Transport 2023 report shows the share of each mode of transport for inland freight. It stated that transport by road, measured in 2020 for the E.U., is over 70% in total. Moreover, the report shows that over the past 10 years, this number has decreased by over 2%, and believe us, this is nothing.

This small shift still means that nearly 3/4 of all freight is moved on wheels inland. Unfortunately for the environment, this is not a trend but a significant and lasting reality.

 

 

Countries around the world are building extensive railway networks like the huge rail hub that was recently built in Venlo, the Netherlands. Countries are also developing new waterways such as the ones being developed in Poland which aim to shift road transport to water barges. Some similar examples are also shown in the U.S., such as the new railway hubs being constructed by BNSF Railway in Phoenix, Arizona. These facts show that companies will continue to use containers.

Maintaining effective loading practices as well as the following reasons are what should be driving your need for container load planning software:

Share market opportunities: Volumes are constantly increasing. This means that the market share is bigger and it should be easier to reach customers who may have an interest in your services. Big logistics companies like UPS and FedEx constantly use contractors and freight forwarders to expand their routes.

COVID-19 impact: The pandemic has significantly impacted consumer behavior, leading to a surge in online shopping and an increased demand for physical goods. While this trend has somewhat flattened or trended downwards as the pandemic subsided, the U.S. Department of Transportation made observations highlighting the growing importance of e-commerce and its impact on freight movement.

Projected growth: Freight demand in the U.S. market is expected to grow 40% by 2045, with air cargo being an 84% increase, multi-modal shipping being a 58% increase, and truck freight being a 42% increase. Truck freight container transport is projected to remain the dominant mode despite the growth in air and multi-modal shipping.

Technological advancements: New technologies hold some promise for improving efficiency. There is no doubt that deploying software for cargo load planning is a leading idea among others for the freight industry. However, the adoption of new systems, as with many others, needs to be carefully managed to avoid rough job displacement and ensure system resilience for seamless integration.

Increased Funding Availability for Intermodal Transport: Focusing on the U.E. market, the programming period from U.E. 2021-2027 introduced more funding opportunities for intermodal freight transport through the continuation of ERDF, C.F., and CEF. This indicates a growing recognition of the importance of intermodal transport in the E.U.’s transport policy.

Container load planning software streamlines cost analysis: Using three main elements, this software allows for a more comprehensive understanding of cost structures specific to inland waterway transport. Here they are:

• Simplifying cost categories: The user-friendly interface of container load planning software allows you to use different layouts, visualize different types of containers, and more, which helps with smart load planning.
• Distinguishing variables and fixed costs: When we use certain types of cargo or vehicles, such as trucks, trailers, and others, it is much easier to set freight costs from the bottom line.
• Providing cost calculation models for certain shipments: if we have a container shipment with the same layout, it is much easier to assess future demand and freight rates.

 

Cargo calculator: Determine Your Container Shipment

Efficient container loading is crucial for optimizing shipping costs and maximizing space utilization. Logistics providers can improve operational efficiency and reduce expenses by accurately calculating load capacity.

 

 

To achieve optimal results for your shipment, you should consider these key factors:

Distance traveled while loaded: Measures vehicle efficiency.

Load factor: Assesses cargo space utilization.

Utilization rate: Combines the distance and the load factor for overall efficiency.

Here is a short list of quick benefits that you can get by investing in container load planning software:

• Improve space utilization
• Reduce transportation costs
• Enhance operational efficiency
• Make data-driven decisions

After reviewing the data above, we suggest that it is time to take the first step toward efficient freight management. Try our freight container load planning system today. Learn how to optimize your shipping operations. Contact us to get a demo and utilize an efficient way to support your freight rate calculator to streamline your processes and reduce costs.

 

FAQs

What factors influence freight rates?

Freight rates are determined by several factors. The most important elements are:

• The characteristics of the shipment: Weight, volume, dimensions, and type of freight.
• The origin and destination: Distance, mode of transportation, and specific locations.
• Current market conditions: Demand and supply dynamics, fuel prices, and economic factors.
• Additional transportation factors: Services such as insurance, customs clearance, or expedited delivery.
• An efficient container loading: Optimal load placement can affect overall shipping costs.

 

How does container loading affect freight costs?

Efficient container loading has a major impact on freight costs. By maximizing space utilization and weight distribution, companies can:

• Reduce transportation costs: Minimize empty space and optimize cargo capacity.
• Prevent cargo damage: Proper loading protects goods in transit and reduces claims.
• Improve delivery times: Efficient loading speeds up the loading and unloading process.
• Improve sustainability: Lower the amount of manual work required and decrease the amount of paperwork at the workplace.

 

What tools can help optimize container shipments and freight rates?

Several tools can help optimize container shipments and freight rates:

• Freight rate calculators: Calculates estimated shipping costs based on shipping data.
• Container load planning software: Helps visualize and optimize load placement in containers.
• Transportation management systems (TMS): Manage freight movements, track shipments, and optimize transportation processes.
• Data analysis: Analyze shipment data to identify cost savings opportunities and improve decision-making.