Joint Rate

Tags: Glossary

A shipping rate established by two or more carriers operating together on a particular route.

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What is Joint Rate and How is it Calculated?

In the context of shipping, joint rate refers to a freight rate that is agreed upon by two or more carriers who jointly transport a shipment over a portion of the journey. The joint rate is typically lower than the sum of individual rates charged by each carrier, making it an attractive option for shippers. 

The calculation of joint rate in shipping typically involves dividing the total transportation cost for a shipment by the total weight or volume of the shipment. The resulting rate is then divided between the carriers based on the distance each carrier transports the shipment. This division of the joint rate may be based on a pre-agreed percentage, which takes into account the cost of equipment, fuel, and labor for each carrier. 

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