How is Freight Class Determined?

Written by Neal Willis
     

how_freight_class.jpgPer the National Motor Freight Classification® (NMFC®), which sets the standard for classifying freight based solely on four characteristics (Density, Handling, Stowability, & Liability), commodities are grouped into one of eighteen different freight classes ranging from class 50 – 500. Generally speaking, the lower the class, the lower the cost of shipping, all else equal. The NMFC® also governs claims guidelines and procedures and sets the standards for packaging requirements. Along with origin and destination information and shipment size and weight, freight class is another factor that LTL carriers use to help them determine how much to charge for hauling a shipment.


Density

Density is determined by dividing the mass of an object by its volume. It’s important to note that, in order to accurately calculate shipment density, all packaging and packaging materials must be factored into the calculation. If one side of an item is slightly overhanging a pallet, it can throw off the calculation completely and change the entire shipment’s freight classification.



Stowability

Carriers like hauling freight that fits easily into their trucks. Freight that is oddly shaped can be difficult to handle and it can cause there to be empty space left unfilled, which could otherwise be used to generate revenue. Plus, oddly shaped freight can cause damage problems for other freight on the truck, which can be costly to the carrier.

Handling Requirements

freight_class.jpgEspecially in the event of an accident (i.e. spillage or breakage), LTL carriers need to know what they’re handling. If your commodity requires special care beyond that of a normal shipment, such as hazmat, then the carrier’s cost of handling can be much higher than normal and they’ll need to charge more accordingly. They also take into account handling requirements such as liftgate and inside delivery. For example, it will generally cost carriers more to deliver a shipment going into a residential neighborhood versus one going to a business with a receiving dock located within an industrial park. Turning a truck around in a narrow, residential neighborhood takes more time and residential deliveries aren’t usually equipped with the right tools, such as a forklift or a loading dock, for easy offloading of freight.

Liability Exposure

Carriers incur higher insurance and liability costs as a result of hauling highly valuable and/or dangerous freight, and they pass along the costs of handling those types of shipments with higher rates to those shippers tendering those types of loads. For example, a pallet of gold is much more likely to be stolen than a pallet of coal. A drum of cyanide is much more dangerous than an empty drum on a pallet. Therefore, the pallet of gold and the pallet of cyanide would likely cost a few dollars more to ship, since the carrier is assuming more risks to transport them.

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