How to Calculate Shipping Costs for Customers: 6 Delivery Options

In this article, you’ll learn how to charge customers for shipping and how to calculate the cost across six delivery options:

1. your own vehicle;
2. motorcycle couriers;
3. per-distance pricing;
4. postal services (using Brazil’s Correios as an example);
5. freight carriers;
6. Mercado Libre.

Shipping costs are a sensitive part of the buying process. High shipping fees are among the top reasons shoppers abandon their carts, but service quality matters too.

That’s why it pays to understand what goes into the calculation and how each delivery option sets its prices. You’ll be better positioned to negotiate with partners and give customers the best service at the lowest possible cost.

How should you charge customers for shipping?

It’s a common question for anyone starting an online business or improving customer service. How you charge for shipping is a strategic decision that can make the difference between closing a sale and losing a customer at checkout. There are three main approaches.

The company covers shipping

This is the familiar free shipping, a very attractive offer for shoppers. But it needs careful planning: free shipping does little good if delivery takes too long, and missing the promised delivery date hurts your reputation.

Before offering free shipping, make sure your operation is ready for higher demand, both financially and operationally.

In most cases, free shipping applies to higher-margin products or to orders above a minimum amount. Either way, the numbers have to work.

Shipping based on order value

With this approach, the shipping fee varies with the order total. Higher-margin products offset the shipping discount, spreading the cost.

It’s a good way to raise your average order value, since it encourages shoppers to add more items to get a better shipping rate.

The customer pays for shipping

Here, the customer pays the full shipping cost. That’s good for the store, which avoids the expense, but it depends heavily on competitors’ prices and on the quality of the delivery service.

Many shoppers are willing to pay more for faster delivery, such as same-day delivery. In other words, speed has value too.

Now that you know the three ways to charge for shipping, let’s look at how to calculate it.

How to calculate delivery fees for local deliveries

If you run a local business, consider delivering with your own vehicle or through motorcycle couriers.

1. Shipping with your own vehicle

Start by figuring out your delivery cost. Add up every expense tied to the service over a set period, such as a month. The main ones are:

• driver wages and benefits: even if you make the deliveries yourself, put a value on your time;
• fuel: calculate the vehicle’s average fuel efficiency by dividing distance driven by fuel used;
• registration fees and vehicle taxes for the car or motorcycle;
• vehicle insurance;
• average maintenance cost.

Add up all the expenses and divide the total by the number of deliveries made in the same period. The result is your average cost per delivery, the baseline for the fee you charge customers.

2. Shipping with motorcycle couriers

Another common option for local deliveries is hiring third-party motorcycle couriers for the last mile. In that case, pricing depends on the courier company, which sets its rate based on:

• distance traveled;
• package weight;
• package dimensions;
• number of items.

If your business handles a high volume of deliveries, you have more negotiating power. It’s worth talking to courier companies to get better rates, which lowers the shipping fee you charge customers.

3. Per-distance pricing

A simpler way to set your delivery fee is to charge by distance.

Based on your delivery cost, set a rate per kilometer or mile and multiply it by the distance to the customer’s address. Remember to account for the return trip if the vehicle comes back empty.

How to calculate postal shipping costs

For long-distance deliveries, postal services are among the most widely used options. In Brazil, for example, Correios considers not only distance and the chosen service but also the relationship between a package’s weight and size, known as dimensional weight. It’s calculated as follows:

Dimensional weight (kg) = length × width × height (in cm) ÷ 6,000

For Correios’ PAC and SEDEX services, dimensional weight only comes into play above 10 kg. In that case, it’s compared with the actual weight, and the higher of the two is billed. Because rules change and vary by service and country, always check your postal service’s current rate table.

Worked examples

Example 1: a package weighs 12 kg and measures 50 cm long, 45 cm wide, and 40 cm high.

50 × 45 × 40 ÷ 6,000 = 15 kg

Since the dimensional weight (15 kg) is above 10 kg and higher than the actual weight (12 kg), shipping is billed on 15 kg.

Example 2: a box weighs 14 kg and measures 45 cm long, 30 cm wide, and 25 cm high.

45 × 30 × 25 ÷ 6,000 = 5.6 kg

Since the dimensional weight is below 10 kg, shipping is billed on the actual weight of 14 kg.

In practice, you don’t need to do the math by hand: postal services offer rate and delivery-time calculators on their websites.

How to calculate shipping with a freight carrier

Freight carriers are another option for long distances. Like postal services, they usually apply dimensional weight to set the billable weight, but each carrier has its own divisor and rate table.

Many carriers offer online rate calculators; others require a quote. Shipping rate comparison platforms can also help you compare several carriers at once.

In Brazil, road freight hired from carriers or owner-operators is subject to a minimum freight rate, established by Law No. 13,703/2018, with values set by ANTT based on cargo type, distance, and number of vehicle axles.

How to calculate shipping on Mercado Libre

On Mercado Libre, the calculation follows similar logic. The platform uses volumetric weight, calculated with the same formula (height × width × length ÷ 6,000), and compares it with the actual weight to set the billable weight.

Because rules and weight brackets change often and vary by country, check Mercado Libre’s help center before pricing your products.

Calculate shipping accurately and at scale

Understanding how shipping costs are calculated is essential for any business that delivers products. With that knowledge, you can cut costs and negotiate better partnerships.

As your operation grows, though, calculating by hand stops being practical. Maplink Cloud’s Platform automates these calculations in your systems:

• the Freight API calculates the minimum freight rate set by Brazil’s ANTT, based on distance, cargo type, number of axles, and empty return trips, and can be used together with the Trip API;
• the Toll API calculates tolls along the route by vehicle type;
• the Distance Matrix API calculates distances and travel times between multiple origins and destinations, the basis for per-distance pricing.

For online stores, Google Maps Platform helps validate addresses and calculate distances at checkout, preventing delivery errors.

Maplink Cloud has spent more than 25 years bringing together geolocation, cloud, and data intelligence for companies across Latin America. As a Premier Partner for Google Cloud and Google Maps Platform, we integrate these solutions with your e-commerce platform, TMS, or ERP through Maplink Cloud Managed Services.

Talk to a specialist ➜

Enjoyed this article? Share it on social media and subscribe to the Maplink Cloud blog newsletter.