Regardless of how much industry experience you have, determining freight classification and staying in line with the National Motor Freight Traffic Association’s (NMFTA) rules can be frustrating, especially if you get it wrong. However, determining your shipment’s freight class is a critical step to effectively managing your supply chain. Not only does class determine your hard cost, but it’s also a vital factor when it comes to dealing with possible claims or disputes.
Our experts address the most common questions and areas of confusion in this post that relate to freight class and NMFC rules. Although it may seem like Logistics 101, we advise refreshing your knowledge of the ever-changing shipping criteria.
Freight class was created to help create standardized freight pricing for LTL shipments, regardless of warehouse, carrier or broker you use. The class is based on the shipment’s density, stowability, handling, and liability. Together, these characteristics establish your asset’s “transportability.” Class qualifications are determined by the National Motor Freight Traffic Association (NMFTA) and are frequently updated. There are 18 classes that a shipment may fall under, with class 50 being the lowest, to class 500 being the highest. As mentioned above, the class assigned to a shipment is important to the carriers in determining the price charged to you. Likewise, the freight class indicates the type of product you are shipping and affects the overall shipping process. The class also lets the driver know what type of products he is carrying and the processes needed to do so properly.
The National Motor Freight Classification (NMFC) is published and updated by NMFTA up to three times per year. The NMFC number is the specific classification your shipment falls under. When scheduling a shipment, you must have this number ready to complete the process.
Again, the NMFC number is critical to determining not only how your shipment will need to be processed, but ultimately the price. If you do not calculate the NMFCnumber properly, you could run into greater issues with the carrier (who monitors this practice regularly).
As the density of your materials increases, the LTL freight class lowers, leading to lower shipping costs. Some items are only classed based on density, such as aluminum. This is because the less dense the material is, the more fragile it can become, requiring a different shipping process. The key to density-based shipping is to pack the items as compact as possible. The more weight you can get in one area, the lower your freight class will be and potentially lowering your overall cost. Although not all carriers ship by density only, those who do often have better financial results.
When shipping density-based items, it is important to keep in mind that the class will change depending upon the exact weight or dims of the shipment. For example, if you’re shipping pallets of fabric to two different locations, and the weight is different, the two shipments will generally have different classes, which will be reflected in the price.
FAK stands for Freight All Kinds and refers to a consolidated cargo shipment where items of different classes (regardless of weight, bulk or value) are shipped in a single truckload but charged a single rate. FAK was implemented to facilitate easier pricing and billing communications between the carrier and shipper. Negotiating FAKs are a large advantage in securing the lowest shipping rates but are hard to come by.
As a result, we are often questioned why a client’s manufacturer’s FAK cannot be applied to their shipment. The reason is simple, each FAK is created for a particular shipper by a carrier and applied to a pricing contract. These are predetermined agreements on a per request basis. If you believe you could benefit from a FAK, talk to your Ascent Representative for more details.
Who said logistics had to be complicated? We certainly didn’t. Contact our team to learn more.