83 The process of rate quotation

The process of rate quotation

This is a complex process because millions of different goods that are shipped, but also the numerous origins and destination over which these good might move, as well as alternatives routes might be used.


Factors considered in rating freight

There are many factors available in rate determination for a particular product. The factors are listed below:

1.  Shipping weight per cubic foot

2.  Perishability

3.  Damage liability

4.  Liability for damage to other goods being transported

5.  Excessive weight

6.  Excessive length

7.  Trade conditions

8.  Quantity offered as a single consignment

9.  Susceptibility to theft

10. Difficulty in loading and unloading

11. Care or attention required in loading and transporting

12. Liability for spontaneous explosion

13. Value of service


It is useful for Procurement to understand these factors of rate determination so that Procurement could minimise the transportation cost by choosing the right transportation mode, optimum quantity to be shipped and frequency of shipment.


BLC 304/05 Procurement Management Copyright © 2009 by Wawasan Open University. All Rights Reserved.


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