How to price courier jobs

Written by nicholas katers
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How to price courier jobs
(Photo by ElStruthio (Flickr))

Every courier service and delivery company has to develop the right formula to price courier jobs. Speciality couriers may try to price their jobs low to compete with FedEx, DHL and other carriers without realising the long-term financial consequences. Each courier job has to be priced with a balance of operating costs and customer satisfaction in mind. The best formula for courier job pricing involves a calculation of mileage, labour costs and special circumstances that make deliveries difficult.

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  1. 1

    Determine how much document preparation is needed for delivery. If your company offers printing and binding services, you should add a portion of the cost of paper, ink and binding materials to the job quote.

  2. 2

    Add a mileage charge between 30p and £1.60 per mile to each courier job to account for vehicle wear and tear. Use a tiered system of mileage charges in which businesses within 10 to 15 miles are charged lower rates than clients more than 25 miles from dispatch.

  3. 3

    Insert a fuel surcharge to courier prices if your job requires a truck, car or van. The typical surcharge for gasoline on a courier job is 15 per cent of the entire quote to offset fuel costs.

  4. 4

    Measure each package carried by your couriers and truck drivers and apply additional charges for oversized deliveries. You should charge a per-pound rate above the size of a standard box or envelope to account for space lost in delivery vehicles to large packages.

  5. 5

    Apply an airport surcharge to a job quote; this rewards the patience and time spent at an airport by an air courier. Delivery companies charge between £3.20 and £16 per air courier job depending on job length due to frequent delays, security checks and customs inspections.

  6. 6

    Discount prices on courier jobs for clients with reliable daily, weekly and monthly business. For example, a law firm that relies on your courier service for daily document deliveries should get a discount up to 10 per cent to encourage further delivery requests.

  7. 7

    Charge 50 to 100 per cent on top of standard rates for courier jobs that are expedited or same-day deliveries. The USPS and private delivery services charge more for expedited courier services due to the additional manpower required for delivery.

  8. 8

    Develop a flat fee schedule for delayed deliveries, late payments and after-hour courier jobs. These fees should be high enough to discourage clients from holding up your couriers, forgetting to pay monthly bills and requiring delivery staff to work after hours of operation.

Tips and warnings

  • *Pass a portion of the costs for special equipment use to your courier clients. A parcel delivery requiring a lift, ramp or refrigeration can burn your company's profits without proper pricing. Special equipment charges should include between 10 and 25 per cent of equipment rental costs and labour.
  • *Keep the hourly wages and insurance costs of your delivery personnel in mind when pricing courier jobs. Your daily workload of courier jobs should be sufficient to cover the day's labour, auto insurance and liability insurance costs to keep you in business.

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