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How to Properly Classify LTL Freight Shipments

How to Properly Classify LTL Freight Shipments

Classify LTL Freight

I often have customers ask me how to classify LTL Freight shipments, and I also often have customers who have the wrong class for their shipments.

To properly classify LTL freight can sometimes be difficult and confusing, but it’s really not that bad :) To start, the easiest way to properly classify LTL freight shipments is to subscribe to one of the options available with the National Motor Freight Traffic Association (NMFTA) on their site here: http://www.nmfta.org/Pages/Nmfc.aspx They publish the National Motor Freight Classification (NMFC) which is the standard the industry uses for classing LTL shipments. Most LTL carriers use this standard as well as all brokers and most shippers. Sometimes, carriers setup more simplistic pricing models that aren’t class dependent, depending on the customer, but we will focus on the NMFC system for this discussion.

Basically, the class for all shipments fall into 3 categories: Item Specific, Density Based, or Release Value.

The basis for classification is as follows per the NMFTA’s website, “Commodities are grouped into one of 18 classes—from a low of class 50 to a high of class 500—based on an evaluation of four transportation characteristics: density, stowability, handling and liability. Together, these characteristics establish a commodity’s “transportability.”

Most items in the NMFC are item specific, meaning that specific item has a specific class attributed to it. Sometimes, it can be tricky to find your specific item, and it sometimes requires doing a bit of searching or being a bit creative when searching the NMFC. Since there are so many commodities in the marketplace, the NMFC can’t possibly categorize and class them all. This is kind of considered grey area and sometimes arguments can develop between shippers and carriers if their item isn’t specifically described. It’s important to find the closest match in the publication for your item.

Next, you have items where the class is based on density. For instance, plastic articles, lighting fixtures, and sporting goods are a few categories that are density based. This makes sense because the variety of items and densities these items make up can be so vast it would take thousands of pages to cover every possibility. So instead, they use a simple formula to classify LTL freight in these items. In my opinion, this is the easiest way to class freight and generate consistently accurate pricing. The one important thing with density based items is to remember your rates and class are dependent on exact weight and dimensions of your freight. Small variances here can lead to big and costly changes in freight class for shippers. Make sure to be certain of your dims and weight before shipping.

Finally, you have release value items. Usually, these are commodities that can vary greatly in value even though the commodity description is the same. Think LCD TV’s or cosmetic products. For instance, you can have shampoo that sells at the 99c store or you can have shampoo that costs $50/bottle. The NMFC sets release value to allow carriers to protect themselves from liability and to offer lower costs for shipping if your product isn’t worth a lot or you’re willing to release your goods to a lower amount. However, one major caveat here is in the current climate most carriers offer very low liability insurance, and they are not obligated to indicate that coverage to you since you’re expected to have read and fully understand either your tariff or their general tariff on their website. This means, even though you choose a higher class and higher release value on the bill of lading at time of shipment, their tariff may supersede this higher coverage indicated by the release value in the NMFC that you think you’re getting.

In conclusion, to properly classify LTL freight is very important when shipping. It insures you get accurate pricing and helps make sure your product is being fully covered by the carrier when shipped. A few carriers will classify LTL freight for you, but most don’t or they take too long to respond to requests to be feasible. We’re always glad to help you classify your shipments properly whether or not you’re shipping with us.

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