What is Multiple Basing-Point Pricing System?
Multiple basing-point pricing system is a pricing strategy used in the transportation industry when shipping goods from one destination to another. It is used to determine the amount of money that a shipper is charged for shipping goods from one point to another. The price is determined by the distance between the two points, the weight of the goods being shipped, and the type of goods being shipped.
How Does Multiple Basing-Point Pricing Work?
Under a multiple basing-point pricing system, a shipper is charged based on the distance between two points. The shipper is charged a base rate for the first point and then additional rates for each additional point. For example, if a shipper is shipping goods from point A to point B, they will be charged a base rate for the distance between point A and point B, and then additional rates for each additional point, such as point C and point D. The additional rates are based on the distance between the two points and the weight of the goods being shipped. For example, if the goods are heavier, then the rate for the additional points will be higher. If the goods are lighter, then the rate for the additional points will be lower.
Benefits of Multiple Basing-Point Pricing System
There are several benefits to using a multiple basing-point pricing system:
- It allows for a more flexible pricing structure, as the base rate and additional rates can be adjusted based on the weight and distance of the goods being shipped.
- It provides more accurate pricing for shippers, as they can get a more accurate estimate of the cost of shipping goods from one point to another.
- It allows shippers to compare prices between different shipping companies more easily.
- It helps to reduce shipping costs, as the additional rates are based on the distance and weight of the goods being shipped.
Conclusion
Multiple basing-point pricing system is a useful pricing strategy for shippers, as it allows them to get a more accurate estimate of the cost of shipping goods from one point to another. It also provides more flexibility in pricing and helps to reduce shipping costs. For more information about the multiple basing-point pricing system, please see the following links: