Helpful information For LTL (Less Than Truckload) Shippers
LTL shipments typically weigh between 151 and 20,000 lbs.
Carriers collect all the LTL freight and consolidate FTL loads
The rules and regulations of LTL shipping can sometimes seem overwhelming, even to the most seasoned shipper. After all, there’s much to understand to keep things running efficiently.
For instance, you need to know how your product is defined by the trucking industry (referred to as the product or freight’s NMFC), how to properly prepare your shipping documentation and how the freight should be properly packaged or bundled. You’ll also want to evaluate carriers and the variety of options that are available to you for getting your freight to its final destination as quickly, reliably and cost effective as possible.
The NMFC (National Motor Freight Classification)
When it comes to getting your products to your customer, one of the first things you need to consider is how your product is defined by the trucking industry.
In the world of LTL shipping, different types of products – from steel bolts to auto parts to blenders – are defined according to their makeup. Each product definition is called a classification. The class of your freight plays a prominent role in calculating the freight charge for transporting the shipment.
How are freight classes determined? The many classes of freight are catalogued in the National Motor Freight Classification tariff, commonly referred to as the NMFC.
The NMFC is a publication for motor carriers containing rules, descriptions, and ratings of all commodities moving in commerce. The publication is used to classify freight for freight billing and rating purposes.
What do all these different freight classes mean?
As we mentioned, several elements, including density and value, determine the freight classification of a commodity. Take Ping-Pong balls, for example. Ping-Pong balls are class 500 (the most expensive freight class) because of their density, or lack thereof!
A carrier can fill an entire freight trailer full of Ping-Pong balls without having much weight loaded. Since rates are based on weight and density, the rate for transporting Ping-Pong balls is higher than it would be for something like heavy steel parts. However, even with very low-density freight, there are ways to reduce your freight rate charges.
Looking at another example from the NMFC to see how you can lower your freight charges by accepting some of the risk (or limiting the value of your goods in the event of loss or damage). Perfumes in barrels or boxes may be classified under NMFC item 59070, class 85. But NMFC note 60000 states that as the shipper, you may declare a “released value” in writing on the bill of lading. In this case, the released value of the property cannot exceed $2.15 per pound. If you put this released value on the bill of lading at the time of shipment, your barrel of perfume’s class will be reduced to class 70. This means a lower shipping rate. In turn, the carrier has limited its liability to $2.15 per pound should damage or loss happen to the shipment. Therefore, stating the released value of your goods on the bill of lading and accepting the associated protection tradeoffs can adjust your classification and lower your rates.
How Freight Rates Are Calculated
Freight rates are based on many factors, including:
- The distance the shipment is moving
- The shipment’s weight
- The density of the commodity being shipped
- The commodity’s susceptibility to damage
- The value of the commodity
- The commodity’s load ability and handling characteristics
Click one the image to see a full chart
Note in the sample freight matrix how the freight rates increase as the class goes up. Also, note how the freight rates decrease as the weight break increases. There is a similar freight rate table for every origin/designation zip code combination serviced by a LTL carrier.
The last four elements (among other criteria) go into establishing the classification of a commodity. The NMFC, or National Motor Freight Classification tariff, contains all product classifications. There are eighteen possible classes ranging from 50 to 500. The higher the class, the higher the rate for every hundred pounds you ship. Most less-than-truckload rates are stated as a rate per hundred pounds, or per hundredweight. Rates are structured so that as the weight of your shipment increases, the rate per hundred pounds decreases.
For example: a shipment weighing 100 pounds may cost $41.00 per hundredweight, while a heavier shipment–say, 500 pounds–of the same commodity (moving to the same final destination) may only cost $35.00 per hundredweight. But doing the math, we see that the total charges for the 500 pound shipment are higher (5x$35 is greater than 1x$41). Most LTL carriers state a minimum charge for very light shipments.
This sample rate matrix shows how a carrier’s rate table might look for rates between two zip codes. Weight breaks are indicated across the top. The freight classes are listed down the left side.