12 Sep Freight Class and LTL Pricing
Freight Class and LTL Shipping Rates
Have you ever wondered how LTL shipping carriers come up with their rates? There are many factors considered when rating a shipment like the speed of service, the distance that needs to be travelled, and what type of facility it will be picked up and delivered to, but another important factor is the freight class. Freight classes are classification numbers that are assigned to different types of commodities to help carriers identify what they will be shipping. These numbers were created by the National Motor Freight Traffic Association and consist of 18 different classes using numbers ranging from 50 to 500. Now you may ask, how are commodities assigned a class? There are 4 factors that are considered when evaluating a commodity, its density, stowability, handling, and liability.
Density is determined by and item’s weight and dimensions, length, width, and height. Higher density freight has a lower class number, which usually translates into a lower cost per pound to ship. This may seem backwards, but carriers love freight that is heavy but doesn’t take up a lot of space on their truck so they can pack it full of other shipments. Light freight that takes up a lot of space is just the opposite and will ship at a higher class and higher cost per pound.
Stowability refers to how the freight can be arranged into a standard truck. If everything fits nicely on a standard 48” x 40” pallet or skid, a carrier will be able to maximize the truck space by placing everything neatly next to each other, which again leads more shipments per truck for the carrier. If you have irregular shaped freight that the carrier cannot put other freight right next to, that unused space will be calculated into your shipping cost.
Handling considers how easy or difficult it will be to move your freight on and off a truck and through a terminal. An easy shipment would be items fitting on a standard skid that a forklift can quickly pick up and load into a truck. A difficult shipment would be for example something very tall or very fragile that cannot be loaded by a forklift. Tall shipment may have to be laid down to fit into a truck and a fragile shipment may have to be loaded by hand which increases time and cost.
Last is liability, which considers the probability of a shipment of being damaged, stolen, as well as its perishability. Freight that is considered a high liability will be charged accordingly.
All these factors are considered when determining which class will be assigned to freight, but there is another code that can be used to more specifically classify goods called a NMFC number. NMFC umber stands for National Motor Freight Classification. The NMFC number is different from the class as specifies the exact commodity of your shipment, for example electric cords or shoes, whereas the class is a generic classification based on the 4 things previously discussed. Having an official NMFC number from the National Motor Freight Traffic Association can help your freight not get reclassified by carriers during transit, which will often change the rate. If a carrier feels you put the wrong class on the Bill of Lading, they will change it to what they think is correct, so its important that you are using the correct class when moving a shipment if you do not have an NMFC number. If you are interested in learning more about how to get an NMFC number, click here.
As always if you need help with a shipment and knowing which class to use, contact us at Ark and we would be glad to help.