what is freight cost

Freight cost refers to the expenses incurred when shipping goods or cargo from one location to another. It encompasses the price charged by a carrier for transporting the cargo from the source to the destination location. The cost is influenced by various factors such as the mode of transportation, weight, dimensions, density, stowability, packaging, fragility, destination specifications, and freight class. Freight costs can be affected by fuel costs, freight density, and volume, among other factors. Businesses that ship cargo regularly consider freight expense as a significant cost and must record it appropriately in their financial books. The cost may be incurred when transporting goods from the manufacturer’s warehouse to the company’s warehouse or from the company’s warehouse to the retail or customer site. It is important for businesses to understand the different ways freight costs can be applied and how freight is documented to minimize confusion.