In logistics, a “tariff” is a list of rates or charges that a carrier applies for transporting goods. It essentially sets out the pricing structure for moving items from one place to another, covering different types of goods, weight categories, and distances. Tariffs ensure that these rates comply with regulatory standards, preventing unfair pricing and promoting transparency.
Components of tariffs
A tariff usually includes various components. The main one is the freight rate, which is the base charge calculated based on weight, volume, distance, and the type of goods being transported. There are also surcharges, which are additional fees that might apply under certain conditions, like fuel surcharges or fees for handling hazardous materials. Accessorial charges cover extra services beyond standard transportation, such as liftgate service or residential delivery. Besides these, tariffs also include rules and regulations on packaging, labeling, and claims procedures.
Examples of a tariff
A logistics company shipping electronics might have a tariff that includes:
- A base rate of $1 per pound for standard shipping within a 500-mile radius
- A fuel surcharge of 5% of the base rate due to fluctuating fuel costs
- An accessorial charge of $50 for residential delivery
Understanding tariffs is crucial for anyone involved in the logistics industry, as it directly impacts the cost and efficiency of moving goods through the supply chain.
