Flat-Rate Shipping: A Comparison with Freightera’s Pricing Models

One common approach to freight pricing is flat-rate shipping, which offers a straightforward pricing structure. However, with the rise of more sophisticated shipping platforms such as Freightera, dynamic pricing models have become increasingly popular.

In this article, we’ll explore flat-rate shipping, we’ll compare it to dynamic and standard freight pricing models, and highlight the pros and cons of each approach.

What is Flat Rate Shipping?

Flat rate shipping is a pricing model where a single, fixed shipping rate is applied regardless of the shipment’s weight, size, or destination within a specified range.

The best known example of flat-rate shipping is postal services. They can ship a standard box or envelope at a fixed price, as long as it’s a certain size and weight.

Flat-rate shipping provides a predictable cost, which makes it easy for businesses to calculate shipping expenses upfront. It’s particularly popular with e-commerce businesses since it allows them to offer customers a simple, all-inclusive shipping rate.

Freightera’s Pricing Models: Standard and Dynamic Pricing

While flat-rate shipping offers simplicity, it may only sometimes be the most cost-effective solution, especially for businesses with varying shipping needs. At Freightera, we offer two alternatives to flat-rate pricing that provide flexibility and more often than not, savings. These solutions are dynamic pricing and standard freight pricing.

Standard Freight Pricing

With Freightera you’ll also encounter the (industry) standard pricing model. Standard rates will generally be fixed for a longer period and they’re not nearly as susceptible to fluctuations.

Because standard rates do not adjust to real-time market conditions as sharply as dynamic pricing, they may be higher than their dynamic counterpart when demand is lower.

Standard pricing may not offer the same level of flexibility as dynamic pricing, particularly for businesses with fluctuating shipping volumes or needs.

Dynamic Freight Pricing

Dynamic pricing is a flexible model where shipping rates change fairly frequently based on factors such as demand, capacity, fuel cost, etc. This model allows carriers to offer competitive rates and increase charges when demand is too high.

Dynamic pricing allows our carriers to offer lower rates when business is slow, and to increase prices when they cannot meet demand. This means much better rates for shippers during the off-season.

One of the main drawbacks of dynamic pricing is the shorter validity of quotes, typically ranging from 3 to 5 days. If a shipment is not picked up within this window, there may be a significant price increase, as the original quote is considered expired.

Flat Rate vs. Dynamic vs. Standard Pricing

Here’s a short breakdown of where each of these pricing models shines and what that can mean for your business.

Flat Rates are ideal for businesses that ship either parcels or large businesses that ship by the truckload and do it often. This model gives such businesses simplicity and peace of mind that their rates will not balloon up when demand rises. However, their rates will not decrease either as demand wanes.

Dynamic pricing is ideal for shippers that ship rarely, out of season, or ship to areas that don’t have high demand for pickups or deliveries. This model allows you to always get the best possible rates, as long as you’re not shipping to or from large hubs during the peak of the shipping season.

Finally, standard pricing is the standard for a reason. This pricing model allows for some fluctuation in freight rates, although you shouldn’t expect drastic price hikes unless something unexpected happens within the industry. The rates are very often affordable and compete quite well with either of the other two pricing models mentioned above.

Conclusion

Of course, the best thing to do is to get the feel of the market for yourself. And there’s no better way to do that than to get instant, free freight shipping quotes at Freightera. 

Our rates are some of the best the market has to offer, and if you happen to find a carrier that offers you flat rates that can compete with our pricing, you can always let us know at [email protected] and we’ll make sure to improve our pricing for those lanes. But good luck with that.🙂