The cost of international road transport is rarely just the distance between two points, multiplied by a fixed rate per kilometer. It is the result of a specific combination between a route, cars available, cargo demand, reverse course option, season, characteristics of the product, transit time and direct operating costs.
Therefore, the same load between the same addresses may receive a different price in March, August or December. Difference doesn't always mean, that someone has arbitrarily changed the rate. Often the market situation and the real economics of the course are already different.
The factors below are mainly discussed through the example of FTL, where they are most directly visible. With LTL, the same market and route conditions also come into play, but the total cost is distributed among the shipments in the car.
FTL as the basis of pricing
FTL – Full Truck Load means full truck load, where the vehicle is organized for a specific load and route. It doesn't necessarily mean, that the trailer is always filled to the last pallet space, and that the course is planned and priced as a separate transport performance.
With FTL, the price is not calculated linearly per pallet or kilogram. The main question is how much it costs to position the car, loaded, driven to the destination, unloaded and then returned to a working transport cycle.
Cost and market price are not the same thing
Each transport offer contains two main layers:
- actual costs of implementation – fuel, tolls, ferries, driver's work, depreciation, downtime and other operating costs;
- market situation – how many loads and free cars there are in the specific direction at the specific moment.
Even when direct costs are similar, market price may change. If loads are more than free cars, the price goes up. If the available trucks are more, competition between carriers usually lowers it.
However, the decline has an economic minimum. Below it, the course no longer covers the costs and there is no logic to be fulfilled. In such a situation, the carrier may refuse the cargo, to direct the vehicle to another market or wait for a more suitable offer.
Why direction is so important?
International transport does not end at the moment of unloading. After delivery, the car must find the next load, to move to a region with available cargo or back.
If there is no suitable return cargo in the unloading area, there are three main possibilities:
- return without cargo – the truck travels kilometers, consumes fuel and pays tolls without generating income;
- empty positioning next to another region – the vehicle moves to a more active logistics area, before the next paid course starts;
- waiting in place – part of the idle mileage is saved, but the truck and driver remain engaged and work time is lost.
Waiting also has a price. Fixed costs continue, the driver cannot be used for another course, and the car misses out on potential income. Therefore, two destinations at a similar distance can have drastically different shipping cost.
Search, supply and seasonality
The road transport market is constantly changing. Free capacity can be plentiful one week and severely limited the next.
A higher load is often observed at:
- pre-holiday deliveries and loading of the commercial networks;
- seasonal campaigns and agricultural production;
- summer vacation periods and a reduced number of active cars;
- movement restrictions on holidays or on certain routes;
- temporary concentration of loads after production interruptions;
- end of monthly or quarterly deliveries in some sectors.
The latter factor is not universal for all industries. However, with some manufacturers and distributors, planned volumes must be shipped and accounted for before the end of the period. If many companies operate simultaneously, demand for transport temporarily increases.
The timing of the request also affects
A next day load request leaves less time to find a suitable vehicle, route planning and matching with next course. That doesn't mean, that any urgent request is necessarily more expensive, but with limited capacity, the customer has fewer choices.
With advance planning, the freight forwarder can compare more solutions, book a suitable car and reduce the risk of an expensive offer at the last minute.
The route includes more than kilometers
Two routes with the same distance can have different cost. They can participate in the price:
- various national tolls;
- ferries, tunnels and toll bridges;
- border crossings and probability of waiting;
- traffic bans on certain days and hours;
- need for a diversion or a longer permitted route;
- the cost of positioning to the shipping address.
Changes in fuel and tolls may also change the offer, even if the payload and addresses are the same. European rules additionally link part of the HGV charges to the distance traveled, the category and emission characteristics of the vehicle.
How freight affects shipping cost?
With FTL, the price does not increase proportionally with each additional kilogram, because a whole car is organized. However, weight is not irrelevant.
A heavier load increases fuel consumption and can limit the number of cars, who can legally and technically transport it. The nature of the goods and the transport requirements are also important.
Additional costs may occur at:
- ADR and other regulated cargoes;
- temperature regime;
- oversized or non-standard loads;
- high value and increased security requirements;
- special insurance coverage;
- special conditions for strengthening, loading or unloading.
When comparing the same cargo on the same route at different times, these characteristics remain constant. Then the change in price comes mainly from the market, free capacity, the possibility of return cargo, fuel and travel expenses.
The transit period and the regime of the drivers
Desired delivery time must be subject to statutory management and rest restrictions.
In international road transport in the EU, a driver can normally drive up to 9 hours daily, as twice a week the period can be extended to 10 hours. After most 4 hours and 30 minutes management is required rest from at least 45 minutes. Standard daily rest is a minimum 11 hours, with the regulation allowing for certain exceptions and reductions.
This means, that with one driver the route includes mandatory periods, through which the truck does not move.
With a team of two drivers, they can be changed and the car can stay in motion significantly longer. Thus, the transit time is shortened, but the price increases because of the second driver and the additional organization. Two drivers does not mean unrestricted movement - and with team management, mandatory breaks and a daily schedule still apply.
Hang on, time windows and additional addresses
The truck is priced not only for the driving time, and for the entire period, during which he is engaged in the specific task.
Fixed loading time, long ramp wait, delivery on a holiday, several loading or unloading addresses and changing the agreed schedule may extend the course. If the delay prevents the next load, the loss is not just in downtime, and in the missed next income.
Spot price and contract price
The spot offer is formed for a specific load and date according to the current market. It reacts more quickly to a shortage of cars, seasonal peaks, fuel changes and violations along transport corridors.
The contract price usually associated with predictable volumes, certain directions and pre-agreed conditions. It creates more resilience, but may also contain update mechanisms when fuels change, tolls or other significant expenses.
Hence the price, received a few weeks ago, it may not always be automatically applied to a new date.
Three practical examples
1. Same route in different weeks
The cargo, the addresses and the car are the same. In the first week, there are enough free trucks and a good flow of return loads. In the second week, a seasonal campaign begins and many loads are looking for a limited number of cars. The second offer could logically be higher.
2. Two destinations at a similar distance
The first is near an active logistics center with regular return shipments. The second is in a region with few outbound shipments. After the second delivery, the car will probably wait or go an empty distance. Therefore, prices can vary dramatically, despite similar mileage.
3. One route with one or two drivers
The standard term allows for single-driver performance and mandatory breaks. However, the customer requires an earlier delivery. If the route allows acceleration with two drivers, the car can run longer by alternating, but the course will be more expensive.
Why FTL and LTL are not priced the same?
With FTL, the entire independent transport cycle is evaluated. In LTL or groupage transport, shipments to different customers are combined in one car. Market and route factors remain, but the total cost is distributed according to the share of capacity used or blocked by each shipment, as well as according to the processing required.
What information is needed for an accurate shipping quote?
- exact loading and unloading address;
- date and time range for loading;
- desired or required delivery time;
- description of the product;
- total gross weight and dimensions;
- ADR, temperature or other specific requirements;
- number of loading and unloading addresses;
- conditions of access, ramp and estimated processing time;
- need for special security or additional insurance coverage.
The more accurate the initial information, the lower the risk of the offer being changed due to missing parameters.
Conclusion
Whether it is FTL or LTL, the price is not just "miles per rate". In FTL, it reflects the entire independent transport cycle: the positioning of the vehicle, the market balance in the direction, the possibility of return cargo, season, the route, goods, the lead time and the next possible operation of the truck. With LTL, these factors remain, but the cost is apportioned among the participating shipments according to the capacity occupied and the handling required.
Therefore, the exact offer is a momentary assessment of a real transport scenario – not a universal tariff, which remains unchanged throughout the year.
E-Sped organizes international FTL and LTL transport on European routes. Upon specific request, the team can check the available capacity, the applicable route and conditions of performance.
