A courier rate card is a price list by zone and weight slab, plus surcharges. To build one, take what each carrier charges you for every zone and slab, add your margin, and state the rules that change the price: volumetric weight, minimum weight, fuel surcharge, COD, ODA and return charges, and GST.
The parts of a courier rate card
| Part | What it decides |
|---|---|
| Zones | Price by distance: within the city, within the state or region, metro to metro, rest of India, and special or remote areas. |
| Weight slabs | Price by weight, usually a rate for the first slab (such as 500 g) and a rate for each additional slab. See weight slab. |
| Service | Air (express) or surface. Surface is cheaper and slower, and is often priced per kg with a minimum weight. |
| Volumetric rule | The divisor used to turn size into weight, commonly 5000 for express. See the volumetric weight calculator. |
| Surcharges | Fuel surcharge, COD charge, ODA charge, return (RTO) charge, and any handling or docket charge. |
| Tax | GST at 18%, shown separately. See GST on courier services. |
How to build your rate card
- Write down your real cost. For each carrier, zone and slab, note what you pay including fuel surcharge. This is your cost sheet, and clients never see it.
- Pick one carrier per zone as your base. Price from the carrier you will actually use on that lane, not the cheapest one you rarely book.
- Add your margin. Decide the margin you need on the selling price and work back from cost (the formula is below).
- Copy the carrier's rules, or stricter. If your carrier bills on a 5000 divisor and 500 g slabs, your rate card must too. If yours is looser, you pay the difference on every bulky parcel.
- Price every surcharge. Anything the carrier charges you that isn't on your rate card comes out of your margin.
- State the terms. Validity, credit period, and what happens when the carrier revises fuel surcharge.
- Review it every quarter against what carriers actually billed you.
Margin and markup are not the same
Markup is profit as a share of cost. Margin is profit as a share of the selling price. To hit a target margin, divide the cost by one minus the margin:
Selling price = cost ÷ (1 − margin)
If a shipment costs you ₹60 and you want a 25% margin, the price is ₹60 ÷ 0.75 = ₹80. Adding 25% to cost gives ₹75, which is only a 20% margin.
An example layout
The numbers below only show the layout. They are not market rates; use your own costs.
| Zone | First 500 g | Each additional 500 g |
|---|---|---|
| Within city | ₹40 | ₹30 |
| Within state | ₹55 | ₹45 |
| Metro to metro | ₹70 | ₹60 |
| Rest of India | ₹85 | ₹75 |
| Special and remote areas | ₹110 | ₹100 |
On this layout a 1.3 kg parcel going metro to metro is billed as 1.5 kg: ₹70 for the first 500 g plus two more slabs at ₹60, so ₹190 before surcharges and GST.
Mistakes that eat the margin
- Pricing on actual weight only. The carrier bills you on the higher of actual and volumetric weight. If you don't, light bulky parcels lose money.
- Leaving out the return charge. A returned shipment costs freight both ways.
- One flat rate for all of India. It wins the cheap lanes for your competitors and the expensive ones for you.
- Never checking the carrier's bill. Re-weighed parcels are billed to you at a higher weight than you charged the client. See how to catch weight discrepancies.
- Not knowing the margin per client. A big client on a thin rate can be your least profitable.
Hyper Route sends professional quotes in seconds and shows your true margin on every shipment, client and route, so a rate that isn't working shows up in the first month, not at year end.