Understanding The Limitations of a Shipping Rate Calculator

Shipping rate is a fundamental part of logistics and eCommerce. Shipping providers have different shipping rates for the services they offer.

The shipping rate can vary depending on the size, weight, destination, estimated delivery time, and the date of goods. One can use a shipping rate calculator for quick estimations in a few clicks.

There are various reasons why shipping costs vary and why customers and businesses need accurate estimated shipping costs. Find out more about shipping rate calculators and their relevance in 2024.

What is a Shipping Rate Calculator?

A Shipping rate calculator is an online tool that provides accurate cost of shipping parcels from one place to another. Online businesses plan their shipping operations based on shipping rates.

This helps them run their supply chain operations successfully. It is a valuable tool that helps create transparency between the customer and the business.

Logistics providers offer competitive shipping prices that can drive sales and suit your budget. Shipping calculations are essential for eCommerce companies to have proper logistical support.

Factors influencing shipping costs

Several factors influence shipping costs. They are individually considered  for the customer, the carrier/logistics provider, and the business. The 5 most relevant factors that influence shipping rates are.

1) Shipment delivery time

Businesses rely on shipment delivery times to maintain their reputation and timely fulfillment.

The distance and the estimated delivery time are critical factors for calculating shipping rates. For example, an overnight urgent parcel delivery can cost more than the standard package delivery rate.

A carrier or logistics company may charge you more or less depending on the urgency of the delivery. There may be additional charges if you are requesting faster deliveries.

2) Weight of the package

The weight of the package is a crucial factor in shipping calculations. Its deadweight is put on a scale to measure.

There is also a dimensional weight that is taken into account. Depending on the ultimate weight of the package, the shipping is calculated.

Calculating shipping rates based on the package weight is a common way of calculation. The weight of the package determines its price.

3) Parcel Insurance

Parcel insurance is another factor in shipping calculations because mistakes are inevitable. It is for customers looking to ship expensive materials. Insuring your shipments against damage and loss is always a smarter choice. 

Couriers charge extra for parcel insurance services. Ideally, it can be around 3% of the package value.

Also, customers can get their shipments insured by third-party insurance providers. Businesses suggest parcel insurance to customers when they are operating with expensive items.

4) Destination of the package

Shipping costs can differ depending on the distance the shipment has covered. There are shipping zones through which the parcel travels and the distance is calculated by the courier. The cost is calculated from the origin to the destination.

Customers have to select the location where they want the parcel shipped and the destination to be delivered. The entire amount is calculated before the shipping process is initiated.

5) Fuel costs

Fuel prices are taken into account by courier companies. This is a crucial factor that changes according to the market and different locations.

Carriers can charge you fuel costs when there are fuel price hikes. There can be added fuel charges applicable for the cross-country deliveries.

For this, fuel surcharge calculations determine the price of fuel from one location to another. It is added to the overall shipping charges and calculated on a shipping rate calculator.

Limitations of shipping rate calculators

Shipping rate calculators help plan extensively and reduce the need to look at each price factor and other considerations separately. However, they can have certain limitations that businesses and customers can face. Let's look at a few of them.

1) Time-consuming for bulk shipments 

Shipping calculation is a no-brainer. You can input the data and figures and have it summed up in just a few clicks. But, this might not be the case when there are bulk shipments and a large volume of data to process.

Shipping rate calculators have shown their inefficiency by lagging or running slow during such tasks. Due to such issues, businesses and customers cannot entirely rely on the calculation tool and need more time with calculations.

2) Variable costs lead to confusion

Shipping calculators can often show different prices compared to the market shipping rates.

This confuses customers and enterprises making them less reliable in shipping operations.

Moreover, there can be issues regarding variable costs without the correct representation of individual costs. 

All the above scenarios can lead to greater confusion and clients can reject the respective courier services.

3) Limited Insurance options

Different enterprises seek different criteria during their logistics partner selection. Some may focus on shipping rates, while others might consider parcel insurance options.

A shipping service provider is also known for their insurance coverage and policies. Businesses feel more confident with shipping calculators that include excellent coverage insurance.

Most carriers have limited shipping options and this is one of the limitations of shipping calculators.

4) Additional Charges may apply

Customers are not ready to pay extra for shipments during shipping calculations. They are not interested in hidden costs and it is a massive red flag for businesses.

However, additional charges may apply in certain situations where there is lack of prior knowledge of the customer or enterprise.

This is another limitation that pushes businesses out of partnerships with logistics services. Additional charges may apply in cases involving dangerous goods transportation or if you are shipping out special items or goods.

5) Non-negotiable prices

Logistics companies may have non-negotiable costs within their shipping rate calculations. These may or may not be hidden, but they can bother businesses and customers.

They may have questions regarding these prices. Some might also feel reluctant to join hands with the logistics services. 

Non-negotiable prices can create confusion among business owners as well as give out a stern image of the shipment provider. One has to be transparent and ready for understanding with companies during partnerships.

Pro-tip💡

ClickPost allows you to compare more than 100 carriers and calculate shipping costs. It helps you look at various costs within the shipping operations of couriers.

Their fulfillment software enables you to calculate shipping costs based on weight, dimension, origin, and destination. You can also select the shipping method you like for the package.

You can look at the surcharges, discounts, and the package type the logistics company is offering. This can help you save money and do easy estimations of shipping costs.

Final Word

Shipping rate calculators, despite their limitations, can help you save time and take your business forward.

Customers can have a chance to calculate shipping and plan their logistics operations efficiently. One has to keep in mind regarding shipping rate calculator limitations before making informed business decisions.

Choosing a trusted shipping partner with an accurate shipping rate calculator can keep your business afloat and logistics in place. A user-friendly shipping rate calculator is a green signal while partnering with a logistics company.

FAQs

1) Do shipping rate calculators consider custom duties for international shipments?

No. Shipping rate calculators do not usually include taxes and customer duties because it is a government fee imposed on your goods. It is the recipient’s responsibility to pay the customs duties and taxes.

Custom duty fees can differ according to the value and type of the package and specific regulations of the recipient’s country.

2) Why do shipping rate calculators sometimes offer inaccurate estimates?

There are several reasons for a shipping rate calculator to provide inaccurate estimates. Inaccuracy can be an issue when it calculates large volumes of data.

Also, shipping calculators may not include various discounts and special promotions.

In many cases, the shipping rate calculator may not have updated information, such as the current pricing structure.