What are the factors that decide the transportation charges in India? Do you know?
Businesses need to have clarity on how truck transportation charges in India are calculated. If you understand the factors that influence transportation costs, you’ll be able to make informed decisions. Being aware of what increases costs in south India as well as other parts of India can also help you find ways to control them.
You can even negotiate with transport companies for better rates and even ask them to exclude the service you do not require, so you do not pay for that unnecessarily.
How Trucking Costs Are Calculated?
Companies that offer transport services in Kochi and other cities of South India, calculate the trucking costs by using both fixed and variable expenses each has its own significance in the total cost of cargo transportation. Transport companies use these costs to decide the right prices. Have a look at what comes under fixed and variable expenses.
Fixed Costs
Fixed costs remain constant regardless of how much the truck operates in South India or other parts of the country. These costs include:
- Truck Loan or Value Loss– Truck owners pay a loan every month or lose some value if they own the truck. This can cost ₹20,000 to ₹50,000 per month for a medium truck.
- Insurance Cost – Truck owners also pay some amount to insurance companies to protect their vehicles. The amount for this may be ₹30,000 to ₹80,000 per year. This amount may be different as per the type of truck and its condition.
- Permit and Registration Fees – Trucks if travelling to different states, need to have special permits. The companies that offer truck transportation service spend nearly ₹15,000 to ₹50,000 per year to purchase these licenses.
- Driver’s Income – Drivers also receive wages from truck owners. The amount ranges between ₹15,000 and ₹30,000. Again, this amount can increase or decrease based on their experience and the routes they drive.
Variable Costs
These transportation charges in India change based on how far the truck travels and its condition. These costs include-
- Fuel Cost – Trucks need diesel to run. Fuel takes up most of the money spent, and trucks go about 3-5 km per litre.
- Repair Cost – Trucks need fixing, new tyres, and regular checkups. This costs ₹2-3 for every km they travel.
- Toll Charges – Truck owners pay tolls to use highways or expressways. FASTag makes it easier, but tolls still cost a lot.
- Loading and Unloading – Workers charge money to load goods on the truck and take them off. The cost depends on the type of goods and place.
The standard formula used to estimate trucking costs is:
Total Trucking Cost = Fixed Costs + (Variable Cost per Km × Total Distance)
Apart from these expenses, logistics companies apply a profit margin of almost 10-20%, depending on market conditions and competition. This is how the trucking cost is calculated.
How Is The Cost Per Kg For Transportation Calculated?
If businesses in South India or other regions are not clear about the transportation charges, they will not be able to plan their transportation budget. At the same time, there may be chances of paying for a load they have not sent. Thus, for businesses such as e-commerce companies and manufacturers, it is important to know how transportation cost per kilogram is calculated.
Basic Formula
The standard formula used is:
Cost per Kg = Total Transportation Cost ÷ Total Weight of Shipment (in kg)
But the final transportation charges in India depend on a few important things:
1. Volumetric Weight
Sometimes, transporters charge based on size instead of actual weight. This is common for large but light items. They use this formula:
Volumetric Weight (kg) = (Length × Width × Height in cm) ÷ 6000
Whichever is higher—actual weight or volumetric weight—is used to calculate the cost.
2. Distance Matters
Companies providing transportation service in Kochi calculate the cost per kg based on how far the goods need to go. Generally, prices are:
- Up to 500 km: ₹4-6 per kg
- 501-1000 km: ₹3-5 per kg
- Above 1000 km: ₹2-4 per kg
Shipping between big cities is usually more economical than sending goods to faraway places.
3. Minimum Chargeable Weight
Even for small shipments, a truck transportation service company may set the smallest weight limit. The route and service provider may decide the range, usually between 10 kg and 100 kg,
What Is The Formula For Total Transportation Cost?
The total transportation cost in India depends on many things. We can find it using a simple formula
Total Transportation Cost = Base Freight Charge + Handling Charges + GST + Additional Services
Let’s learn about each part:
Base Freight Charge
This is calculated using either the per-km rate or the per-kg rate. The transporter’s pricing model decides this
Base Freight = (Rate per km × Distance) OR (Rate per kg × Weight)
In India, the average base freight for a full truckload (FTL) ranges from ₹15 to ₹25 per kilometre for standard trucks.
Handling Charges
This includes money for loading and unloading the goods. For normal items, this cost is usually between ₹500 to ₹2,000 per delivery.
GST (Goods and Services Tax)
In India, transport services have a tax. It is 5% if no credit is taken and 12% if credit is used.
Additional Services
- Insurance: Costs 0.3% to 0.5% of the goods’ value.
- Proof of Delivery (POD): ₹50-200 per delivery.
- GPS Tracking: Special tracking may cost ₹200-500 per trip.
- Waiting Charges: If the truck waits too long, ₹1,000-3,000 per day may be charged.
Regional Differences in Transport Costs
Transport charges in India change from place to place due to different roads and truck availability.
- Busy Routes: Roads between big cities like Delhi, Mumbai, Chennai, and Kolkata have good roads and more trucks. This makes transport cheaper, about 10-15% lower than other areas.
- South India: Transport in South India is easier in cities but in hilly areas the charges are high. In some areas, trucks don’t get loads for the return trip, so the transport cost becomes higher.
- Seasonal Changes: The transport budgets may go up by 15-20% because trucks move slower in rainy weather. Also, when we talk about harvesting time, more farmers need trucks, so transport prices increase.
Conclusion
TruckGuru follows these pricing methods to provide accurate and fair transport charges. We help businesses in South India and across the country to minimize transportation costs by:
- Offering competitive pricing based on weight, distance, and route conditions.
- Providing clear pricing without hidden charges.
- Helping businesses reduce costs by avoiding unnecessary services.
- Using smart logistics planning to minimize empty return trips.
Want to transport goods at the best rates? TruckGuru is your best choice! Contact us now!
