Freight Quote

What Is a Freight Quote?

A freight quote is a formal document provided by a transport provider or logistics company to a potential customer. It outlines the estimated cost to move goods from one location to another. In the Australian business context, a freight quote is more than just a price tag. It acts as a formal offer to carry out a specific service for a set price. Unlike an estimate, which is an educated guess that might change, a fixed price quote is generally binding once accepted by the customer.

This document serves as the first step in a commercial relationship. It sets the expectations for both the sender and the receiver regarding the service, the timeline, and the cost. For Australian tradespeople and small business owners, understanding the difference between a quote and an estimate is vital. A quote provides certainty. If a business quotes a fixed price of $500 to deliver a pallet of tiles from Brisbane to Sydney, they generally cannot charge $600 later unless the scope of the job changes or the customer agrees to the variation.

The freight quote typically includes details about the goods, the pickup and delivery addresses, the rate calculation, and any applicable taxes. It is a legal instrument that must comply with the Australian Consumer Law (ACL) regarding accurate pricing. When you issue a quote, you are telling the Australian Taxation Office (ATO) and your client that you intend to supply a taxable service.

For many owner-drivers and logistics startups, the quote is also a safety document. It allows the provider to assess the risks associated with the load before agreeing to the job. By documenting the weight, dimensions, and nature of the goods, the provider ensures they are not taking on illegal loads, such as undeclared dangerous goods, that could put their licence and safety record at risk.

When to Use This Document

You should use a freight quote whenever a customer asks for a price to transport goods. This applies whether you are running a large interstate logistics firm or a sole trader using a utility vehicle to deliver local building supplies.

In the trades and construction sectors, quotes are standard practice. A builder moving scaffolding between sites needs a written record of the transport cost to manage project budgets. Similarly, an e-commerce startup working with a third-party logistics (3PL) provider will need quotes to forecast their shipping costs and set retail prices.

There are specific scenarios where a written quote is essential rather than a verbal agreement. If the job is complex, involves multiple stops, or requires specialised handling, you must document the details. For example, if you are quoting on the delivery of a wide-load excavator that requires pilot vehicles and police permits, a verbal quote is insufficient. The complexity requires a written document to outline the exclusions, permits, and specific traffic management plans.

You should also use this document when establishing long-term contracts. Regular customers might ask for a schedule of rates based on a quote. This serves as a baseline for their ongoing invoicing. However, you must include a validity period on these quotes. In the Australian transport industry, fuel prices and labour costs fluctuate. A quote valid for 30 days protects you from being locked into rates that are no longer profitable due to sudden market changes.

Finally, use a freight quote when you need to verify the details of the cargo. Under the Heavy Vehicle National Law (HVNL), the party arranging the transport has a duty to ensure the load is safe. The quote process allows you to request the specific weight and dimensions of the load. If a client cannot provide these details, you should not provide a fixed quote but rather provide an estimate subject to a final weighbridge check.

Key Sections and Required Elements

A professional freight quote must contain specific elements to be legally valid and useful in Australia. Omitting these details can lead to disputes under the Australian Consumer Law or issues with the ATO.

Business and Client Details

The top of the document must clearly identify your business. You need your business name, address, and contact details. Crucially, if the quote is for a taxable supply and exceeds $82.50 (AUD), you must include your Australian Business Number (ABN). If you do not include your ABN, the client is legally required to withhold 47% of the payment to the ATO. You also need the client's details, including their billing address and the pickup and delivery addresses for the goods.

Basis of Quote

You must explicitly state whether the document is a "Fixed Price Quote" or an "Estimate". Under the ACL, misleading a customer about the nature of the price is a violation. A fixed quote means you cannot change the price without the customer's consent. An estimate means the final price may vary. You should also outline how the price is calculated. Is it per kilogram, per pallet, per cubic meter, or per hour?

Chargeable Weight Calculation

This is a critical section in the logistics industry. You must state if the price is based on "Dead Weight" (actual weight) or "Cubic Weight" (volumetric weight). In Australia, domestic freight carriers often use a conversion factor, commonly 250 or 333 kg per cubic meter. If a large but light item takes up significant space, you charge based on the space it occupies. You must specify this calculation method in the quote to avoid disputes later. For example: "Charges are based on the greater of the actual weight or the cubic weight, calculated at 250kg per cubic meter."

Exclusions and Inclusions

To protect your profit margins, you must list what is not included in the price. Common exclusions in Australian freight include GST, fuel surcharges, tolls, and levies. You should also specify service exclusions, such as "tailgate lift use", "inside delivery", or "waiting time". If the driver has to wait for an hour at the loading dock because the client was not ready, you need to state that waiting time is charged at an hourly rate. This aligns with the Australian Small Business and Family Enterprise Ombudsman's recommendations for fair contract terms.

Validity Period

Quotes must have an expiry date. Due to fuel volatility and regulatory changes in the transport sector, a standard validity period is often 30 days. After this date, you are not obligated to honour the price.

Liability and Insurance

This section outlines who is responsible if the goods are lost or damaged. Standard transport industry contracts often limit liability to a certain amount per kilogram unless the client pays for extra insurance. You must state that "Risk passes to the recipient upon pickup" unless otherwise agreed. This is particularly important for high-value goods.

How to Write a Freight Quote (Step by Step)

Writing a freight quote involves gathering accurate data and presenting it clearly. Here is a step-by-step guide for Australian business owners.

Step 1: Gather Load Information

Contact the client and request precise details about the shipment. You need the weight, dimensions (length, width, height), and the number of items. Ask if the goods are on pallets or loose. Ask if the goods are classified as Dangerous Goods under the Australian Code for the Transport of Dangerous Goods (ADG Code). If they are, you need the UN number and class to ensure compliance and safety.

Step 2: Determine the Calculation Method

Review the information and decide if you will charge on dead weight or cubic weight. Measure the dimensions and apply the conversion factor (e.g., Length x Width x Height x 250). Compare this to the actual weight. The higher figure is your chargeable weight. This prevents you from losing money on large, lightweight shipments.

Step 3: Check Schedules and Routes

Plan the route. Check if there are any tolls or restrictions for heavy vehicles. Verify that the delivery timeline is realistic. Under the Chain of Responsibility (CoR) laws, you must not schedule a pickup or delivery that forces the driver to speed or skip rest breaks to meet the deadline. Ensure the transit time accounts for fatigue management requirements.

Step 4: Calculate Costs

Add up your base rate, fuel surcharge, and any accessorial fees. Determine if you are quoting GST exclusive or inclusive. Most B2B quotes in Australia are exclusive of GST. Ensure the total is clear.

Step 5: Draft the Terms and Conditions

Include clauses regarding the scope of the work. State that variations to the weight or dimensions provided will result in a price adjustment. Include a warranty that the customer has the legal right to transport the goods and that they are not prohibited items.

Step 6: Issue and Track

Send the quote to the client via email or through your document management platform. Record the date sent. If the client accepts the quote, they should sign it or send an email confirmation. Once accepted, the quote forms the basis of your contract and eventually your tax invoice.

Common Mistakes to Avoid

Many disputes in the Australian transport industry arise from poorly prepared quotes. Avoiding these common mistakes will save you time and legal trouble.

Failing to Distinguish Quote from Estimate

The most common error is calling a document a "Quote" when it is actually an "Estimate". Under the Australian Consumer Law, if you provide a fixed price quote, you are bound to that price. If you discover the job is harder than you thought, you generally cannot charge more. If you are unsure about the weight or access issues, provide an "Estimate" clearly marked as such, stating that the final price will be based on actuals.

Ignoring Chain of Responsibility

Do not promise unrealistic delivery times to win the business. If a customer demands a 24-hour delivery from Perth to Adelaide for a standard truck, refusing or quoting a realistic timeframe is a legal obligation under the Heavy Vehicle National Law. If you quote a time that is impossible to meet without speeding, you share the liability if the driver has an accident. Your quote must reflect a safe schedule.

Vague Pricing on Exclusions

Simply writing "plus extras" is not enough. You must be specific. If you do not state that "tailgate lift" is an extra charge, a court or tribunal may find you cannot charge for it later because it was not a prominent term of the contract. Be upfront about fees for waiting time, redelivery, and after-hours service.

Misleading "Free Shipping" Offers

If you are a business selling goods and offering "Free Shipping", the ACCC mandates that the shipping must be genuinely free. You cannot artificially inflate the product price to cover the shipping and call it free. The cost component must be transparent.

Omitting the ABN

Forgetting to include your ABN on quotes over $82.50 is a compliance issue with the ATO. It can lead to payment withholding and administrative headaches for your clients.

Legal Considerations (AU)

Operating a freight service in Australia involves navigating a complex web of federal and state laws. Your freight quote document is often the first piece of evidence that you are complying with these regulations.

Australian Consumer Law (ACL)

As a business owner, you must not engage in misleading or deceptive conduct. This includes your pricing. Your quote must be clear and accurate. If you use standard form contracts, be aware of the "unfair contract terms" laws. If your quote terms are significantly one-sided and create a major imbalance between you and a small business client, a court may declare those terms void. For example, a term that allows you to unilaterally change the price without a valid reason would likely be considered unfair.

Heavy Vehicle National Law (HVNL) and Chain of Responsibility

If you operate trucks over 4.5 tonnes GVM, the HVNL applies. The Chain of Responsibility extends legal duties beyond the driver to everyone in the supply chain, including the person who consigns the goods and the person who schedules the load. When you write a quote, you are scheduling the load. You must ensure that the timeframes and routes in your quote do not encourage or require the driver to breach speed limits or fatigue laws. Safety is a primary consideration, not just a secondary one.

Work Health and Safety (WHS)

Under WHS laws, a Person Conducting a Business or Undertaking (PCBU) must ensure the health and safety of workers. This extends to manual handling. Your quote should reflect the nature of the goods so that the appropriate equipment and manpower are allocated. If you quote for a 500kg item but do not specify that a forklift is required at the pickup point, you may be breaching your duty of care by sending a driver into an unsafe situation.

Privacy Act 1988

Freight quotes collect personal information, such as names, addresses, and phone numbers. If your business has an annual turnover of more than $3 million, or if you trade in personal information, you must comply with the Australian Privacy Principles (APPs). This means you must handle this data securely and only use it for the intended purpose. Including a reference to your Privacy Policy on your quote form is best practice.

Taxation (GST and ABN)

The ATO requires that tax invoices for taxable supplies exceeding $82.50 include an ABN. While a quote is not a tax invoice, it is good practice to include the ABN to avoid the "no ABN withholding" rule applying to any deposits paid upfront. You must also clearly state if GST is included in the quote or if it will be added. Ambiguity here can lead to disputes with business clients who expect to claim GST credits.

Frequently Asked Questions

Is a freight quote legally binding? Yes, if it is clearly stated as a fixed price quote and the client accepts it. Once the customer accepts your offer by saying "yes" or paying a deposit, a binding contract is formed. You are then obligated to perform the service for that price.

Can I charge more than the quoted amount? Generally, no. Under the Australian Consumer Law, a fixed price quote is binding. You can only charge more if the client agrees to a variation in writing, or if the original information provided by the client was incorrect (for example, if they said the pallet weighed 100kg but it actually weighed 500kg). Your quote should include a clause stating that final charges are subject to the actual weight and dimensions.

Do I need to include GST in my freight quote? You do not have to include the GST amount in the listed price, but you must state whether the price includes or excludes GST. If you do not state this, the price must be taken to include GST. For business clients, quoting GST exclusive is standard practice.

How long should a freight quote be valid? The industry standard is usually 30 days. However, you can set the validity period based on your business needs. If fuel prices are unstable, you might shorten this to 14 days. Always print the expiry date clearly on the document.

What is the difference between cubic weight and dead weight? Dead weight is the actual weight of the goods measured on a scale. Cubic weight is a calculation based on the volume the goods occupy. In Australia, road freight carriers typically charge based on whichever is greater. This prevents them from losing money on large, lightweight items that fill up the truck space.

What happens if the goods are damaged during transit? Your liability depends on the terms in your quote and the contract formed. Standard terms often limit liability. If the client wants full coverage for high-value goods, they usually need to pay for marine transit insurance or specific freight insurance. Your quote should clarify that insurance is not included unless specified.