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Make sure your freight contracts only cover what you need

| Jan 22, 2020 | Transportation Law |

Once a California business is off the ground, it will probably need help transporting the goods. More than likely, the business will need to work with a freight carrier in order to get that done. When negotiating freight contracts, it is crucial that a company only pay for what it needs, which means understanding what that is.

The company will need to gather some information about the business before sitting down to work out a contract. Asking some questions in order to know what to look for is a good first step. For example, will the shipments remain local, or will they go across country?

Other questions will need answering as well. How much weight will go onto a carrier’s truck? When do the shipments to go out and how often? What type of goods will be shipped?

Once you answer these questions, the rate negotiations with a prospective carrier can begin. The rates will probably be different depending on location. For instance, if the goods only ship throughout Southern California, meaning the local area, then the rates will be different from if the company wants to ship to all of California and/or other states as well. A single-zone rate may work best if the goods remain local, but a multi-zone rate would be better if they need to go beyond the local area.

Considering the fact that trucks have weight limits, the tonnage a company wants shipped will definitely affect the rate it will pay. However, some factors, such as payment records can help in receiving a better rate. Like the business shipping the goods, the carrier wants to know it will be paid as well. Another factor is the type of goods being shipped. Hazardous materials will probably cost more due to the risk assumed by the carrier and the regulations it must follow.

Obviously, there is a lot to consider when looking to work with a freight carrier. The company will want to get the best terms possible in the freight contracts executed in addition to the best possible pricing. For this reason, it would be wise to work with a transportation law attorney in order to protect the rights of the business.