GlossaryEN1 min readUpdated: Jun 23, 2026
Cost-Based Freight Pricing
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.
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Source: https://www.investopedia.com/terms/c/cost-plus-pricing.asp
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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.
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