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TAXABLE WEIGHT: NAVIGATING THE CALCULATIONS OF RATIOS
Q: How do you determine the taxable weight based on volume-to-weight ratios in transportation quotes?
A: Both national and international transport offers are based on the “weight/volume” ratio to calculate the correct cost, leading to what we refer to as the taxable weight. The tool that allows for the correct attribution of freight cost is the so-called “ratio.”
Let’s start with a simple principle to better understand the case: a truck full of hay (very bulky) weighs just a few tons compared to the total carrying capacity of the vehicle (24t). In such a case, the actual weight of the goods would not cover the transportation costs incurred.
How then do we determine the correct rate in a similar case? A semi-trailer with a capacity of 24,000 kg has a cargo volume of about 80 m³, a flatbed of 13.60 meters in length, and the capacity to stow 34 pallets (80×120 cm) or 32.64 m² (1 EUR pallet has an area of just under 1m²).
The calculation is as follows:
- 24,000 kg / 80 m³ = 300 kg (1 m³ = 300 kg)
- 24,000 kg / 13.6 m = 1764 kg (1 m of flatbed = 1764 kg)
- 24,000 kg / 34 pallets = 705 kg (1 m² or 1 EUR pallet = 705 kg)
However, there are some offers with a different ratio, such as 1m³ = 200 kg. Quotes like this may seem attractive but often conceal— for the reasons mentioned above—more expensive rates. There are also cases where the ratio per m² or per pallet is not applied, which frequently disadvantages the client, who is billed for the freight cost.
Why pay for 7 linear meters when, after a detailed analysis of the shipment, only 6 linear meters are actually occupied? There’s a saving of one meter that wouldn’t be utilized. In this case, the rate per m² or per pallet is more suitable. It should be noted, to avoid any misunderstanding, that the more ratios are reported in the offer, the greater (in terms of saving) the advantage for the client.
For ‘out of gauge’ goods, which do not present uniformity and standards in terms of packaging, the offers mention “linear meters.” This is based on the simple principle that the space occupied by a particular shipment is compared to the maximum length occupied.
However, it may happen that the package presents a length that generates a linear meter rate, but its width and weight may allow loading other goods placed alongside. This is with the aim of optimizing shipments and, consequently, saving the client money. Even in this case, it is more appropriate to apply the rate per square meter (m²).
For completeness of information, we must emphasize that sometimes packages may present exceptions, due to weight or shape, for example, that necessarily need to be positioned at equal distances on the vehicle to ensure safety during transport (linear meter rate).
In the complex world of shipping, everything has a precise logic between what is transported and the volumetric weight generated. For this reason, ratios must have proportionality between them, where a m³ has a coefficient proportionate to the m², respectively to the linear meter; all compared to the maximum weight allowed by the vehicle.
Using the rate per m² or pallet, or rather the actual space occupied on a vehicle, more targeted taxable weight calculations can be obtained and the saving is tangible compared to a flat rate per meter of flatbed.
Another case is if there are loose cartons that can be stacked on top of each other, where the ratio per m³ would be more competitive.
Last but not least, offers based on actual weight (without ratios) that present risks for both the supplier, who would be forced to increase the price shortly, and for the client, who could pay too much freight when the rate is taxed on actual weight.
Understanding the “ratios” can better comprehend the various cases of generated freight rates.
Ask for information and updates on your rates from one of our specialists; we will be pleased to advise you best!