IDEA: Define a minimum delivery charge for your goods shipped to customers (where mileage is overriden by a fixed minimum cost).

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When your firm delivers its goods locally to customers, make certain you establish a minimum freight delivery charge regardless of the miles.  You can charge a competitive mileage rate based upon a sampling of the local rates being charged by other carriers, but you must have a minimum charge because there is a fixed amount of time loading and unloading that you must cover for the driver’s labor and benefits.

As an option, you might drop the minimum charge if you like if the order exceeds a specific dollar threshhold you might establish.

You might also throw out the minimum charge if the value of the customer’s order exceeds a  certain dollar amount.  It is your decision but do carry a nominal fixed minimum for deliveries to cover your actual cost (where mileage billing is minimal relative to your cost).

GPI 110

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