# Cost-Based Freight Pricing

*Last updated: 2026-06-23*

> Cost-based freight pricing is a rate-setting method in which a carrier or freight forwarder derives its charges from the actual costs of providing the service and adds a predetermined profit margin.

Cost-based freight pricing is a rate-setting method in which a carrier or freight forwarder derives its charges from the actual costs of providing the service and adds a predetermined profit margin. Direct costs—fuel, driver wages, vehicle depreciation—are combined with allocated overheads such as insurance, administration, and infrastructure, and a markup is applied to the total. The approach differs fundamentally from market-based or demand-driven pricing, where rates follow supply and demand fluctuations. It is most prevalent in contract logistics, own-account transport, and long-term shipper–carrier partnerships where both parties value a stable, auditable price structure. The shipper gains planning certainty; the carrier retains exposure to cost increases that cannot be contractually passed on.

**Source:** [https://www.investopedia.com/terms/c/cost-plus-pricing.asp](https://www.investopedia.com/terms/c/cost-plus-pricing.asp)

## Quick Facts

| Property | Value |
|---|---|
| Term | Cost-Based Freight Pricing |
| Language | EN |
| Word count | 111 |
| Last updated | 2026-06-23 |
| Source | https://www.investopedia.com/terms/c/cost-plus-pricing.asp |

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