A Guide For New Couriers - Estimating Your Rate

When you are starting up a courier business or moving into a new area, it can be tricky to know what – or how – to charge your new clients. These straightforward tips will help you start building your business in no time.

Tools of the Trade

There are a few different methods of setting a fee for your courier loads. Whichever one you choose, you must ensure that you have the appropriate technology to help you measure times, weights and distances accurately. This will help you make your calculations and, if you can easily show a client your methods of recording this information, you will quickly build up trusting and profitable relationships.

I would advise investing in a GPS tracker, as this is the simplest way to prove to a client that you took the most efficient route possible. A GPS tracker will also allow you to accurately identify the distance travelled on any particular journey. A watch will do for logging the time, but remember to get your client to corroborate the start and end times on the spot to avoid complications later on.

Checking Out the Competition

Inspecting the rates of your immediate competition is a great way of beginning to think about your own prices. Get a handful of quotes for a certain service and then average them out. This will tell you what the going rates are and ensure that you do not over- or undercharge your own clients.

It is also worth checking out how the competition sets its prices. Are they using minutes, distance travelled or the weight of courier loads to determine payment? Do you think that they are doing something wrong that you could do better?

Weighing Up Your Options

What do you think your rate should be based on? Weight, minutes, miles or a flat fee? Well, the answer is that it is best to factor in a mixture of all of these options. For example, you could charge a flat fee (say £10) for jobs under 15 minutes and then start charging per minute after that. This is a good option for jobs that take 60 minutes or less. Once you start going over an hour, it is better to charge based on the distance travelled.

You may also want to charge extra for overweight courier loads.Start by deciding on a limit (e.g. 5 kilograms), and then impose a small fee of 15 or 20 pence for every kilogram over that.

The Exceptions

No matter how well you have planned your methods for charging clients, as you’ll know if you’re a courier, loads of jobs come in at the last minute or start much later than planned. Frequently a client will want the fastest service possible or ask you to work outside of your normal hours. In this case, an easy option is simply to double the original service charge. You could even triple it if you are asked to hit the roads on the weekend or in the early hours of the morning.

On the other hand, it’s not uncommon for clients to keep drivers waiting when packages and courier loads are not ready to go when the driver turns up. In this case, give a short grace period of five or ten minutes, and then start charging by the minute until the customer is ready.

Keeping these simple tips in mind will help you price your own services in a way that is fair both to you and to your clients. Good luck!

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Norman Dulwich is a correspondent for Courier Exchange, the world's largest neutral trading hub for same day courier loads in the express freight exchange industry. Over 5,000 member companies are networked together through the Exchange to fill empty capacity, get new clients and form long-lasting business relationships.

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