Developing a price list for your courier company is more than essential, it should be ready before your business cards. So when you first enter the market as a new business, what is the plan? How much can I charge and still get the business? Is it enough to make a profit and can I grow the business on that profit margin or just survive? Let’s take a look at some ideas.
Know your market. You should first take a look at the competition. What are your base prices for local deliveries and how much do you charge per mile for a delivery? Do you have different prices for small vehicles and vans? (Trucks have a completely different pricing structure) Do you charge for attempts? Do you charge for waiting time? Do you charge by weight and quantity of packages? What about the extra stops in the same race? Do they include fuel surges, after-hours surcharges, etc.? to your bills and do they add a late fee to your overdue bills? Do a good detective job and get a copy of their price sheets if possible.
Base Price – This is the price you charge for a delivery, usually within a 25-mile radius of your base location. You can go 1 mile or the full 25 miles, but the charge is the same. Many companies simply use the base charge as their home city and use a flat rate for the entire city (depending on size, of course). However, this is a significant price because often more than 50% of your business will. be done here. If you underestimate or overvalue this “You lose”.
Mileage Charge – This one has some potholes. Your charge per mile must be competitive and reflect the market you work in. Some areas get more per mile and others less. It depends on where you live. As of this writing, I see mileage charges of $ 1.35 to $ 2.25 per mile in various areas. What you have to decide is what price your customer can live on, while allowing him to earn a living, maintain maintenance, and pay for gas. If you choose the wrong number “Lose”.
Overloads – There are many different types of overloads. The most common are fuel surcharges, after-hours surcharges, extra man, equipment, airport, vacations, and more.
The fuel surcharge is one of the most important in today’s environment. It’s there to keep your mileage rate stable while you can adjust to the rising cost of fuel. Right now, the average fuel surcharge is 15% to 22%, depending on your market. That is the percentage you add to the base total of each delivery.
Next up is the After Hours overload. It is common for a business to increase its charges by a percentage or a fixed additional fee after normal business hours, such as after 6:00 p.m. to 6:00 a.m.
What about vacation surcharges? The best way to determine which holidays is to use the hours of the world’s largest courier company FedX. If they are not running, a vacation surcharge will be charged. Get a schedule from FedX and list those vacation dates on your list / price sheet. The amount is generally a flat fee, often $ 25 or more.
Airport Surcharges – As a time critical courier, you will often go to the airport for pickup or delivery. The airport can be a bottomless pothole in which drivers get lost. The plane is delayed, the lines are long, the agent is not there, the forms must be completed correctly, all of which require additional time and effort. Therefore, you add a fixed additional fee to your base price each time you travel to the airport. Often it will be $ 5 to $ 25 depending on your situation.
Late Charges – Many companies feel that if they charge a late fee, they will lose their customer. I can’t deny that this can happen, but they better leave you owing $ 100 than $ 5,000. It has happened to me with some of the best, so do what all your other providers do, charge them if they are late, be it 30, 45 or 60 days, you decide what their terms will be.
Attempts: Sometimes you will come to pick up a package and it will not be ready or you will go to deliver a package and you will not be able to sign and receive it. That is an attempt. It takes you as long to do that as it does to finish the job, so you charge a fee for your time and effort. Most companies charge 50% to 100% of the original price for an attempt. Don’t do your customers any favors here unless you feel like you must. Your time must also equal $$$$.
Additional Personnel / Equipment Surcharges – For some deliveries, you may need some special equipment, such as furniture blankets, specialty trolleys, straps, or elevators. All of this comes at a price to you and you must pass it on to your customer. The amounts to be charged here vary a lot so you can add any tips, but cover your cost and add a percentage of profit to it. Also, on some occasions, you may need to send an additional man to help with a load. When you do, develop a reasonable hourly rate and turn on the clock from the moment you get in the vehicle until the job is done and back.
Package Weight and Quantity – When you charge flat rates, you should assume there is a weight limit on that rate before adding to the charge. Also, the same applies to the number of packages. So on your list / price sheet, tell the customer what that limit is. For example, this price is valid for the first 200 pounds. More than $ 00. ?? per additional pound. Or the same with the number of packages. this price is valid for the first 3 packages, after that $ ??. ?? per additional package.
Extra Stops – When you pick up multiple packages at the same location to deliver to the same customer, they usually expect a break in price. Now this applies only if you are within the same city or within a 25 mile radius area, for example. It is common to charge 50% for additional deliveries. If those deliveries are made in other areas, then it is full rate.
Lead time: deliveries don’t always run like clockwork. There are times when a package isn’t ready when it arrives, there are times when you have to wait for someone to sign, or you can’t find the person to sign. That’s when Wait Time comes in. Typically allows the customer 15 minutes per location to affect pickup or delivery. After that, it charges per minute of waiting time. That rate is usually $ 30 to $ 40 per hour divided into minutes.
Price of Vans: All I will say at this point is that all of the above, while intended for small vehicles like cars and small trucks, applies to vans as well. Except, the base charge, mileage charges and various other surcharges need to be adjusted due to the higher cost of operation.
Keep your price list up to date at all times. Make it look clean and professional. Have it ready to hand out FREQUENTLY! Make sure it’s easy to read and gives customers what they need to choose you as their Messenger Service.
All of these surcharges should be on your list / price sheet and the customer should be fully aware of the charges. NO SURPRISES or “Lose”.
Make your courier company the one that will dominate your market.