Calculating transport costs in times of boom and economic crisis

Transport costs are the value in a specific currency that is charged by a freight forwarder to a sender for the provision of a transport service. Freight costs are only one component of the total transport costs.

To put it bluntly: There is no standard formula for calculating transport costs. Freight forwarders usually send their offers as PDF documents by email to their customers, the senders. The offers usually differ in the types of services and the calculation logic of the individual items. The offers can often only be prepared by specialist staff in a manual process and “translated” into a comparable form using a standard logic. The quality of the result of this process often depends on the skills of the individual people.

Unfortunately, calculating transport costs with Excel is no different from other manual processes. The process is quite error-prone, as values ​​have to be manually copied from emails and PDF documents and inserted into Excel templates. These templates also have to be manually adjusted to new terms or changed cell references on an ongoing basis. Unfortunately, these errors are often not immediately apparent and as a result calculations are incorrect and, in the worst case, lead to very expensive wrong decisions. Holidays and handovers within a team also cause problems, as the complex manual processes are often carried out by a single person and cannot be understood in detail by colleagues. Especially in critical situations, this can lead to incorrect calculations of transport costs and correspondingly expensive errors.

In many companies, transport costs are not only calculated in shipping and logistics, but also in sales. Here, the share of transport costs in the total cost of a product must be calculated. This not only results in duplicate work in different departments, but the errors already described can also occur again in sales. If product price calculations are incorrect, this can quickly lead to financial losses in the five-figure range for the company. It is therefore worth considering using a system to calculate transport costs for pallets, transport costs by container ship or air freight.

Long-term offers in particular often only offer prices for a specific unit, e.g. costs per shipment, package, kg or container, to name just a few examples. The offer does not directly state how much a specific shipment costs, taking into account the package dimensions and weight. Companies must therefore calculate the shipping costs for each individual shipment transported based on the general offers and compare this value with the costs billed by the shipping company. If the values ​​do not match, companies should have the invoice corrected if necessary and thus secure liquidity for their company. The competitive pressure on companies is now permanently high, but senders should pay attention to securing liquidity, especially in times of economic downturn. They can do this by selecting shipping companies with transport costs that are in line with the market, and by carrying out detailed billing checks. Both measures are based on correctly calculating the transport costs.

Calculating transport costs correctly and at the same time achieving transport costs per pallet, container or shipment that are in line with the market is an absolute necessity for companies. However, this should not be confused with “price gouging” at the expense of transport quality. A high transport quality is important in order to keep the supply chain stable and to keep customers satisfied in the long term. Transport quality and the correct calculation of transport costs are therefore not contradictory, but are linked.