OptimalShip's Helpful Shipping Tips

What Determines Shipping Costs?

Posted by K. Sterrett on May 18, 2019 11:03:17 AM

Shipping costs are determined by numerous complicated factors. We know you probably didn't want to hear that!

While some of the factors can be difficult to predict, with some proper guidance and research, shipping costs can be predicted within reason.

The top three factors that are going to affect shipping are weight, size, and shipping speed. For most people, these three factors determine the bulk of pricing and are also the easiest to predict. With no other factors, most shippers have quote tools that are used to easily determine a rough estimate. All three of these factors are also fairly easy to understand: the higher the weight, the larger the size, and the faster the shipping, the more your package is going to cost to get to its destination.

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There are a few lesser known factors that also contribute to shipping speed costs that should be noted, especially because they do not always have anything to do with the top three factors of size, weight, or speed of delivery). For example, almost all carriers will charge an extra fee for having to deliver to or pick up from what they consider to be a "remote area". These areas and fees are different for all carriers, but the fee itself is almost universal; if you're going to have someone hike out into the middle of a small village in Ukraine, your fee will be higher.

A remote area charge is called a surcharge. Here are some of the most common surcharges you'll see when shipping things internationally and domestically.

Dangerous Goods Remote Area Delivery & Pickup

Remote area and delivery are some of the most common fees you'll see when shipping in and out of the country you're in, but they do appear domestically as well. Some places are so remote or harder to access than others! Expect surcharges of this kind to be affordable, but notable, especially if you do remote area shipping often. These surcharges are typically somewhere between $20 and $30 USD per shipment.

Dangerous Goods

If you deal with dangerous goods, it's likely you're very familiar with these charges. With certain standards and documentation, you can ship some dangerous goods overseas and domestically in certain ways (make sure you've done your research on this, as it can be very difficult to adhere to the policies). There are different fees based on how much of a "dangerous good" you are shipping.

For example, certain types of flammable liquids are considered dangerous goods. If you are only shipping a box of these liquids and you have many other items in the shipment, sometimes this is considered a partial dangerous good shipment and the fee is not as high as it would be if you had an entire shipment of these flammable liquids.

There is also a fee for dangerous goods in "accepted quantities," which varies based on the good and country the items are being shipped in and out of. Often, things like lithium batteries that are currently in the computer or device that is being shipped are allowed in shipments as "accepted quantities" of dangerous goods. Loose or extra lithium batteries meant for resale or individual sale will usually carry an entire shipment dangerous good fee. These fees vary wildly and can be as low as $10 and as high as $150 plus what it costs to maintain and acquire proper shipment paperwork.

Does Your Shipment Contain a Dangerous Good? Read More About Them on Our Blog Post.

Non-Standard Shipments

Non-standard shipments come in two types: non-stackable and oversized. There are different requirements for both of these types of shipments, but if you're shipping a lot of oversized pieces, it's best to know the exact size and weight requirements for these pieces (you can read a bit more in our blog about large and heavy packages here).

Non-stackable shipments are those that cannot be stacked due to shape, contents, or packaging type. You can also request certain items or boxes not be stacked, and these items would also fall into the "non-stackable" category.

Elevated Risk, Exporter Validation, or Restricted Destination

Sometimes a zone in a country is considered restricted or elevated risk.

Restricted Destination refers to an area or entire country is subject to trade restrictions that the UN Security Council has imposed.

Exporter Validation means that similar trade restrictions have been enacted against a certain country or area within a country by OFAC and sometimes EEAS.

Elevated Risk surcharges are applied when a carrier feels that their workers may be in more danger during delivery due to civil unrest, threats of terrorism, or is literally in a state of war.

Surprisingly, these fees are relatively low and usually range between $20 - $50 per shipment.

Surcharges Can Add Up

Unfortunately, while most of these fees are very reasonable and quite affordable, they can add up. Sometimes you are shipping dangerous goods to a country that requires exporter validation. Maybe that dangerous good can also not be stacked. Each time a requirement is met for a surcharge, the surcharge will be applied, regardless if another surcharge has already been charged.

While this doesn't mean you shouldn't ship goods, it is a fee that should be considered when importing and exporting, or even sometimes during domestic shipments.

Duties and Fees

It's possible that duties and fees are the most unpredictable charge of them all, simply because they are not consistent country to country. Some countries receive an item that is labeled a gift or a return - which are typically duty-free - and deem it a commodity to attach a duty anyway. Most countries do have some chart on how much of the item's worth is charged as the duty, but fees can range wildly depending on what happens in Customs when the product is imported and exported.

Predictable but Unpredictable

In the end, shipping costs can be hard to predict entirely. A good shipping company or freight forwarder can give you a decent estimate, but it'll be up to a complicated, ever-changing set of rules and regulations to determine the costs per shipment for you.

Print or Save Our Surcharge Quick Ref!

Topics: Export Basics, International Shipping, Domestic Shipping, Import Basics, Exports