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Freight — Costing It, Charging It, and Recovering It

In material supply the transport is not overhead, it is close to cost of goods, and it moves. Most shops quote a delivered price, absorb the variation, and never find out which deliveries were profitable.

1. Own a vehicle or hire one

Owning keeps the delivery margin with you and gives you control over timing, which matters when a contractor wants material this afternoon. It also brings a driver's salary, insurance, servicing, fuel and depreciation, all of which continue whether the vehicle runs or not. Hiring costs more per trip and nothing when idle. The honest test is how many loads a week you actually despatch — below a certain number, owning is a decision made on pride rather than arithmetic.

2. Cost a delivery properly

The cost of a trip is not the diesel. It is diesel plus the driver's time plus a share of insurance, servicing and the vehicle wearing out, plus loading and unloading if you pay for it. Work that out once for a typical short trip and a typical long one, and you have a basis for quoting. Shops that cost only fuel consistently underprice long deliveries and wonder why the busy months are not profitable.

3. Charge freight on its own line

Folding transport into the material rate makes your price look higher than a competitor who breaks it out, hides where your margin actually is, and makes every distant delivery a negotiation. On a separate line the customer sees what is material and what is delivery, your rate stays comparable, and you get a monthly figure for freight charged against freight paid. That comparison is the whole point.

4. Recovering what you actually spend

Once both sides are recorded, most shops find a pattern: short deliveries subsidise long ones, and one or two demanding customers are costing more to serve than they contribute. That is not a reason to refuse them, but it is a reason to price them differently. It is also an argument you can have with figures rather than with a feeling.

5. Freight on the buying side too

Inbound freight is part of what your stock cost, and leaving it out means your landed cost is understated and your selling rate is set from the wrong base. Recording freight against a purchase gives you a truer cost, a truer stock valuation and a truer margin. In bulk material the difference between invoice value and landed cost is not small.

6. The paperwork that comes with it

Every load should carry a challan with the vehicle number, driver, destination and the name of whoever received it, kept against the party. Beyond settling disputes, those details are what the e-way bill portal asks for on any consignment over the threshold — so the record you keep for your own protection is also the record that keeps a truck moving at a checkpoint.

Frequently asked questions

Should I buy a delivery vehicle?
Depends on how many loads you despatch weekly. Below a certain number the fixed costs of owning outweigh the per-trip saving.
Should freight be shown separately on the bill?
Yes. It keeps your material price comparable, makes your delivery cost visible, and lets you check whether you are recovering it.
What should a delivery cost include?
Diesel, driver time, a share of insurance, servicing and depreciation, plus loading and unloading if you pay for them.
Why record freight on purchases?
Because it is part of what the stock cost you. Leaving it out understates your landed cost and your selling rate is then set from the wrong base.
All of this is built into MaterialBill — start free and raise your first bill in two minutes.

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