Do You Know How Much Your Freight Is Paying?

For most of the freight you haul, answering that question is easy. You receive a fixed amount from your customer to haul a specified amount of freight. This is called a flat rate. However, you may notice that on products like potatoes or onions, your customer may pay you by the number of bags or pounds that you haul, instead of a flat rate. This is normally referred to as a piece rate.

If you are paid for the number of pounds you haul, the rate is usually expressed in carton weight (cwt), which means that for every 100 pounds of freight transported, you will receive a specified amount. The more weight you haul, the more you get paid and visa versa.

When your freight rate is based on cwt, computing your total rate is pretty straight forward. Let's say for example that you are hauling 45,000 lbs of freight and your rate is $5.00 per cwt. Compute your total rate by simply dividing the total weight you are hauling by 100 and multiply that number by your rate per cwt. In this example, 45,000 lbs divided by 100 equals 450 cwt, and when you multiply that number by $5.00, your total rate is computed at $2,250.00.

A bag rate is similar in that if you haul more or less bags, the rate will change accordingly. However, bag rates can become more confusing because you may be hauling a number of difference size bags at the same time. If you have different size bags, remember that bag rates are generally computed using a 50 lb bag equivalent.

Let's say you have a rate of $2.00 for every 50 lb bag you haul. You look at your BOL and see this:

800 — 25 lb bags of red onions 20,000 lbs

450 — 50 lb bags of yellow onions 22,500 lbs

Total: 42,500 lbs

Even though you hauled a total of 1,250 bags of product, your customer is not going to pay you $2.00 for every bag, because the bags are different sizes. If you get $2.00 for every 50 lb bag, then a 25 lb bag is going to pay you half the rate. To get your 50 lb bag equivalent, compute the weight of the total number of bags you are hauling, and divide that number by 50. In the example we just used, the total weight of all bags you hauled is 42,500 lbs, and when that number is divided by 50, you get a 50 lb bag equivalent of 850 bags. 850 bags multiplied by your bag rate will give you $1,700.00, which will be the total amount of money you will receive for moving the load.

Sometimes you'll see odd bag weights and it can get even trickier. However, using the method we just outlined will work every time. Just compute the total weight of all of the bags you hauled and divide that number by 50 to get your 50 lb bag equivalent. If you are confused or in doubt, you can always contact your customer and ask!

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