A Shipper's Guide to Freight and Small- Package Services

A Shipper’s Guide to Freight and Small- Package Services

Introduction

It probably came as no surprise when Inbound “Every truck is spoken for every day,” one that travel from certain U.S. locations to the Logistics’ "2018 Trucking Perspectives” survey industry analyst told USA Today, adding that Canadian border with no stops or scheduled found that shippers’ “greatest challenges” 99 percent of trucks nationwide are in use. service interruptions. include reducing transport costs (56 percent), finding capacity (52 percent), and customer But unless a logistics provider offers this service (38 percent). After all, cutting costs service — which most do not — or a shipper and locking in transportation have long been is aware of the possibility, chances are the shipper will not be able to avail itself of this the goals of all logistics and supply chain managers, with high levels of customer dynamic service option. service a top priority. This example underscores the fact that, for

But for many, the process of procuring many shippers, it can be difficult to keep pace of transportation services has gotten a bit more the head-turning changes in logistics capabilities. complicated in recent years. For one thing, a A business that for years relied on regularly serious driver shortage has caused a tightening scheduled less-than-truckload (LTL) service in capacity. As reported by USA Today, a current might, in fact, shave a day or two from its transit shortage of 51,000 drivers is expected to exceed time by using a parcel solution. Or a business 100,000 drivers by 2022, as would-be drivers might be surprised to learn there are differences turn to other less-demanding and better-paying in pricing for service to the same locations. positions in construction and manufacturing. As a result, savvy logistics providers have How then can a supply chain manager keep up rethought many tried-and-true ways of The “historic” driver shortage comes at a time with changing service options and the latest and delivering services in search of greater when a robust economy has fueled a spike in greatest in logistics capabilities? A good place to efficiencies and opportunities. Technology has demand for freight services. Higher levels of start is with a basic understanding of the types been a key enabler in identifying innovative manufacturing, increased consumer spending, of services available. The following pages include solutions, which often result in faster, more and surging eCommerce sales have driven descriptions of core industry services along flexible service than previously thought possible. up 2018 shipment volume by more than 6 with information about the many variables that Direct line-haul service is a good example. percent, according to the Cass Freight Index. affect pricing. This information can help shippers In certain situations, it is now possible for “Demand is exceeding capacity in most modes better understand their logistics options shipments to reach the Canadian border several of transportation by a significant amount,” and ensure that all pluses and minuses are days faster than was previously possible. This considered in finding the most efficient solution. the accompanying Cass analysis noted. is because of the availability of line-haul routes

Understanding Freight Service Capabilities

The process of identifying the right shipping accounts for as much as 75 percent of transportation solution begins with a good the total $740 billion U.S. trucking industry. The understanding of the shipments that need to American Trucking Associations (ATA) reports be processed. A logistics manager must have that there are more than 560,000 for-hire and good information about shipment contents private truckload carriers in the U.S., with the and packaging, knowledge about any special vast majority consisting of individuals with their handling requirements (i.e., temperature own trucks and small firms with fewer than six control), and insight about delivery expectations trucks in their fleet. Most freight travels via for those packages. A company that prioritizes a dry van. fast deliveries and customer satisfaction, for Within the trucking sector, total truck weight example, might select an expedited freight — including product, packaging, fuel, pallets, XX Flatbed trailers are used to haul bulky, service, whereas a more bottom-line focused driver, etc. — must not exceed 80,000 pounds. heavy, and oversized loads that will not company might choose a less-accelerated Once the weight of the truck cabin and trailer easily fit inside a covered dry van. Flatbeds ground solution. The key, though, is for are taken into account, the American Trucking have no sides or roof, which allows for easy individuals making the decisions to understand Associations estimates that a “typical” full loading and loading. their options and the differences between truckload can accommodate shipments weighing XX Refrigerated trucks (also known as “reefers”) service levels. between 40,000–45,000 pounds. are used to transport shipments that require Unlike less-than-truckload (LTL) shipments, temperature control. Refrigerated trucks are Full Truckload (FT) truckload freight is not always palletized. commonly used for perishable food items as Loading is determined based on the unique well as pharmaceuticals, flowers, and certain As the name implies, full truckload refers to needs of each shipment. Within the truckload medical devices. shipments that occupy an entire truck trailer category, three different types of vehicles are with no room to accommodate shipments generally used: Benefits of Full- from other shippers. A full truck will typically XX Dry vans are the most common form of carry freight from a single customer, usually freight transportation and are used to Truckload Service to a single final destination. Truckload freight transport nonperishable items. Dry vans XX Faster Transit Time. Since no additional remains on the same vehicle for the duration generally consist of nonrefrigerated box- of the shipping route. pickups are required, full-truckload sized trailers with doors in the back. shipments generally arrive at their destination faster than they would via According to industry analysis, full-truckload an LTL solution.

XX Cost Efficiency. Full-truckload shipments Potential Downsides are not subject to the freight classification system that affects LTL pricing. This frees to Full Truckload carriers from industry pricing standards. XX Instead, rates are based on factors including Impact of Driver Shortage. The full- the required lane, lead time, and miles truckload segment of the industry has traveled. This tends to benefit shipments been directly impacted by the current headed to cities and other populated areas driver shortage. Bloomberg cites several New “hours of service” since availability of trucks bound for high- reasons for this, including: requirements issued by the volume destinations can help mitigate costs. −− Reluctance of new drivers to sign Federal Motor Carrier Safety on to the harsh lifestyle inherent to Administration (FMCSA) In addition, since freight remains on board the trucking profession, which, for restrict drivers’ time behind the truck for the duration of the transit cycle, truckload drivers, can mean weeks a shipper will not incur costs associated with away from home. the wheel. distribution center or warehouse processing. −− New federal “hours of service” rules that As a result, shippers may face difficulty in finding XX restrict drivers’ time behind the wheel. Less Risk of Damage. Another advantage required capacity. of remaining on the same truck is the “Because drivers can’t work as long,” reduced number of touchpoints. Fewer Bloomberg’s analysis notes, “more of XX Pricing Variances. Full truckloads are not touches mean fewer opportunities for them are needed to cover routes.” regulated by the National Motor Freight Classification damage or theft to occur. −− Stronger economy has resulted in (NMFC), which establishes many would-be drivers opting for pricing standards for less-than-truckload XX Enhanced Backhaul Opportunities. better-paying positions in construction shipments. This allows full-truckload carriers Drivers en route back from a delivery will to set rates based on market conditions. seek opportunities to take on freight for and manufacturing. Thus pricing may fluctuate considerably the return trip. Such backhaul loads can during peak and nonpeak periods. This generally be negotiated at a favorable rate. can make it difficult for a shipper to budget for transportation spend and to lock in an annual rate.

Less than Truckload (LTL) Most LTL shipments are loaded onto pallets, LTL shipments often have access to a wide which helps minimize the risk of in-transit range of special services, including liftgate Shipments that are not large enough to fill damage and allows for easy loading and access, installation, deliveries to remote an entire truck are referred to as “less-than- unloading. Most distribution centers and locations, and inside deliveries. Many carriers truckload,” or “LTL,” shipments and, while not trucking companies follow guidance from the also offer an “expedited” service option, which as prevalent as full-truck shipments, represent Grocery Manufacturers Association (GMA) with offers premium levels of customer service and an important sector of the freight industry. LTL regard to pallet dimensions. GMA guidance guaranteed on-time delivery. shipments generally weigh between 200 and establishes 40” x 48” as an industry standard, 5,000 pounds, and account for up to six pallets. with a capacity to hold up to 4,600 pounds. LTL shipment pricing does not follow the Regardless of the size of pallet used, great same market-based approach as full-truckload LTL shipments are usually combined with care must be exercised to ensure that freight shipments. Instead, LTL pricing is based on shipments from other businesses to create a is loaded correctly and that the pallet is placed a shipment’s “freight classification,” which is full truckload. Through this consolidation of on the truck in such a way that it can be easily determined by the National Motor Freight shipments, multiple shippers share costs, unloaded by a forklift. Classification listing of 18 different classes. usually resulting in significant cost savings. (See below for additional information about LTL service can also be highly flexible since freight classification.) Each class has a drivers generally make multiple stops in the corresponding “standard,” which serves as the course of their routes, stopping to pick up industry standard for determining shipment packages or make deliveries. pricing. The NMFC standard adds predictability to LTL pricing and helps to simplify the price LTL shipping relies on a hub-and-spoke model negotiation process. in which local facilities serve as the spokes and central distribution centers are the hubs. Freight But a shipper must exercise caution in assigning from numerous shippers is gathered at a local a freight class to a particular shipment. An facility and then transported to a distribution Most trucking companies incorrect determination will likely result in a center. At the “hub” distribution center, freight is “reclassification” by the freight carrier. This in either sorted and delivered, or consolidated for follow pallet standards turn will cause an adjustment in pricing along transport to a subsequent facility, depending on established by the Grocery with imposition of a “reclassification fee.” As its final destination. Manufacturers Association. one logistics provider warns: “If you receive a Source: Grocery Manufacturers Association freight rate that seems exceptionally low, it may be because the logistics service provider used a

lower classification number to rate it,” an action XX Special Services. LTL providers offer a referred to as “a deceptive practice.” range of “special” services that full-truckload providers generally do not. These services Potential Drawbacks XX Cost Efficiency. Because freight from can vary by industry — inside deliveries to Less-than-Truckload multiple shippers is consolidated, LTL for pharmaceutical shipments — and can shipments generally benefit from be vital to a successful delivery. But when Shipping reduced rates. it comes to special services, a business XX Increased Transit Times. Since LTL trucks must pay close attention and make sure XX Flexibility. Since LTL line-hauls make usually carry shipments from multiple its potential LTL provider offers the precise multiple stops along their routes, a shipper shippers, several pickup and delivery stops services it needs. Frequently offered can identify a transportation solution that generally occur during the course of an services include: fits its precise pickup and delivery needs. LTL route. This means LTL shipments incur However, since each LTL carrier maintains −− Advance delivery notification longer transit times than full-truckload its own schedule, a shipper would likely shipments. While a shipper can manage −− After-hours pickups/deliveries benefit from the services of a non-asset- this by selecting an LTL solution that based logistics provider, which would have −− Dangerous goods handling incorporates the additional pickup/drop-off comprehensive access to a broad range of −− Inside pickups/deliveries time into its schedule, additional delays can occur if, for example, one delivery stop takes LTL carriers. Non-asset-based 3PLs are able −− Freeze protection services to identify the LTL solution that best meets longer than expected or a truck encounters a specific shipper’s needs and secure the −− Liftgate infrastructure or weather-related delays. required capacity. −− Residential services XX Risk of Damage or Product Loss. Since −− Scheduled pickups XX Inventory Management. LTL services allow LTL shipments incur additional handling, businesses to cost-effectively ship required −− Special handling there is an accompanying increased risk of damage or loss. Freight can be inventory levels across the country with a −− Tailgate high degree of confidence that products reconfigured to accommodate another −− Trailer drop-off will arrive on time. This allows businesses shipper’s pallets or moved to another to better control their inventory needs and −− Two-person delivery truck. This can result in damage to improperly packaged or loaded freight. can help prevent accumulation of excessive −− White-glove services for highly fragile

inventory stockpiles. or valuable shipments

XX Detailed Planning Is Required. Whereas full Although similar to LTL shipments, partial XX Less Freight Handling. Since freight -truckload shipping is a fairly straightforward shipments have some important differences: remains on the same truck, there is a process, LTL shipping requires a fair amount reduced risk of damage or product loss. XX of “legwork.” A shipper must understand Partial-truckload shipments do not require XX the various options offered by different assignment of a freight class. Instead, pricing No Freight Class Is Required. Since partial- carriers and also have an awareness of is determined by market rates with mileage, truckload shipments are exempt from the current shipping rates and capabilities. Many destination, weight, and space required NMFC classification requirements, costs are LTL carriers provide only regional service, serving as key variables. Since partial assessed based on market rates and other for example, which might require multiple shipments often allow carriers to fill extra factors, including shipment density and carriers to reach a certain destination. space on their trucks, pricing is usually space capacity. In addition, there is no risk of very competitive. incurring a reclassification fee, which results from an incorrect class assignment. This is another area in which a non-asset- XX Partial-truckload carriers usually do not based 3PL could be helpful. An experienced stop at distribution terminals while 3PL will have relationships with multiple en route to their destination. This generally Parcel LTL carriers and insight into each carrier’s leads to a higher percentage of on-time capabilities. Because of this, many shippers deliveries, faster transit times, and less Parcel shipments tend to be small, lightweight, enlist a 3PL to manage the process on handling of freight. individual shipments that can be easily handled. their behalf. Shipments usually do not exceed 150 pounds in XX Partial-truckload carriers typically offer weight or 165 inches in length. Shipments are insurance coverage similar to coverage often packed in an envelope, carton, or similar Partial Truckload offered by truckload carriers. This coverage type of container with deliveries typically made often exceeds offerings of LTL carriers. Shipments that exceed LTL limits but will not fill to private residences, retailers, or offices. an entire truck are considered partial-truckload According to FreightQuote.com, benefits of shipments. Partial-truckload shipments often partial-truckload shipping include: range from eight to 18 pallets and occupy X more than 12 feet of linear space in a trailer. X One Truck. Freight generally remains on the Shipments usually weigh between 8,000 and same truck for the duration of transit. 27,500 pounds.

of each customer’s pickup and in handling each package. In addition, since delivery preferences. parcel shipments pass through multiple processing steps, with technology-based As eCommerce giant Amazon.com has redefined scanning implemented at each stage, any consumer expectations for faster and more failure to proceed to the next step would be flexible deliveries, parcel companies have been quickly detected, and steps would be taken critical players in allowing eCommerce retailers to locate the missing package. to keep pace. Innovative technology-based Parcel shipments are small, solutions now ensure optimum route planning, XX Heightened Communication. With parcel individual units that are efficient use of assets, and unprecedented delivery vehicles frequently equipped with levels of tracking and visibility. However, as high-functioning technology systems, drivers usually packed in envelopes these critical "last-mile" services have become can provide regular updates to consumers or cartons. increasingly important and lucrative, parcel about planned and completed deliveries. carriers have faced increased competition from An email or text message can be sent The majority of eCommerce shipments falls into LTL carriers and various disruptors, including just prior to a delivery and again after the parcel shipment category, with deliveries Amazon Logistics and Deliv. the delivery has been made. In addition, direct to consumers’ homes or workplaces. consumers are able to track their shipment’s The Pitney Bowes Parcel Shipping Index found progress online and easily request last- eCommerce growth increased global parcel Benefits of Parcel minute delivery changes. volume by 48 percent during 2017, swelling to more than 65 billion packages. And with no sign Shipping of slowing down, parcel volume is expected to XX Potential Drawbacks of increase by as much as 28 percent annually Cost Efficiency. Parcel shipping is a through 2021. cost-efficient solution. This is largely due Parcel Shipping to the sheer volume of shipments in the A commercial shipper will usually work with parcel pipeline. XX Heightened Risk of Damage/Loss. Because its parcel carrier to establish a schedule for packages are small in size, parcel shipments XX shipment pickups. This often requires a driver Heightened Tracking/Visibility. Since have an increased risk of damage or loss. to enter the businesses on their route and drivers often oversee the loading of their According to Parcel magazine, oversized or engage in dialogue with customers. As a result, own trucks, they will have familiarity with bulky items could be especially at risk since parcel carriers often develop relationships with the types of shipments being transported parcel shipments are often sorted via a their customers and have a good understanding and exercise commensurate levels of care conveyor belt — versus the less-automated

forklift used by LTL providers — and the article notes, L.L. Bean has arranged An industry overview by Market Realist identified can either fall off the belt or undergo with LTL carriers for “white-glove services,” five core courier-service capabilities: extensive jostling. whereby large, bulky items are delivered XX and installed. Standard Courier Services involve collecting, sorting, and transferring parcels to a depot located close to the delivery Courier location. A parcel is then loaded onto a van and delivered. This service takes a few While most courier companies provide a range days and is generally the most cost-efficient of services, they are best known for offering courier solution. fast delivery options along with a high degree of According to Parcel specialized services. Courier services can range XX Overnight Service uses the same logistics magazine, 95 percent of from delivery of a legal document from one processes but ensures guaranteed L.L. Bean’s orders are fulfilled office to another: to same-day fulfillment of a next-day delivery. consumer online order: to guaranteed delivery using parcel services. XX Same-Day Express courier is generally within an international market. In addition, X reserved for more urgent shipments X Limited Special Services. Parcel deliveries courier services can involve a range of transit and is a premium delivery option. generally culminate when the package is modes, including everything from bicycles to left at its end destination. Special services, vans to airplanes. XX International Courier Service delivers including assembly and installation, packages across international borders. Supply Chain 24/7 notes a “disruption” within generally fall outside the scope of a Many courier companies specialize in the industry as many new courier services parcel carrier. service to specific markets and will have have entered the market. This surge in new distribution networks and customs Parcel companies has largely been driven by changing magazine cites the example of retail management resources in place to ensure customer expectations for faster and more giant L.L. Bean, which fulfills 95 percent of seamless, efficient deliveries. A shipper convenient delivery experiences. More notable customer orders using parcel shippers. “But must exercise care, though, to ensure entrants to the courier industry include Amazon. what happens when the consumer wants that any courier under consideration has com, which currently offers same-day and one- a large piece of furniture delivered to the verifiable experience and capabilities in a day delivery to 8,000 U.S. cities and towns, and house?,” the article asked. “The homeowner required market. Deliv, which uses a smartphone app to alert pre- also wants it placed in the living room and unpacked, and he wants the packing qualified drivers to a delivery request. materials to disappear!” For these situations,

XX Pallet courier services are used for XX Customs Management. Couriers that offer delivering shipments that are loaded onto international expertise will generally offer pallets. Typical pallet deliveries include customs management services, whereby all heavy or fragile goods, shipments of regular customs and regulatory paperwork, permit quantities, and shipments of multiple large and license requirements, and duties and items. For example, a shipment of personal fees are handled prior to a shipment’s computers to a high school would be a arrival. In addition, a local courier may be good candidate for courier pallet services. used to personally oversee a shipment’s Pallet services are a highly efficient and movement through customs upon arrival at cost-effective solution, which, according an international destination. to DeliveryQuoteCompare, is why many XX businesses choose this option. Security. An experienced courier will prioritize security by ensuring a rigorous chain of custody for all shipments and Key Benefits of requiring signatures for all shipment transfers and deliveries. Specialized couriers Courier Services offer high levels of security for shipments in need of extra protection, including XX Speed. Shipments generally move directly shipments of jewelry, cash, pharmaceuticals, from point of pickup to their end destination or important documents. with minimal handoffs or touches.

XX Delivery Guarantees. On-time, as-promised

deliveries are core competencies of courier-

service providers.

XX Customer Service. A high level of customer service is another core competency. This can include ready access to dedicated personnel as well as “personal courier services” in which an employee personally oversees the transit process, accompanying a shipment from point of pick up until final delivery.

Shipment Pricing Considerations

Once a shipper understands the differences Motor Freight Classification (NMFC) book. Class between service options and has a general idea designations range from 50 to 500, with lower of its preferred solution, it’s time to consider ranges generally incurring lower rates. Higher cost implications. In doing so, a shipper will classes apply to lighter, less dense freight quickly learn that many variables contribute to that tends to take up more space. Each class shipping costs and that a shipper must do its establishes an industry standard that is used for due diligence to secure a competitive, fair price. pricing. Therefore, freight classification plays a vital role in LTL pricing, and great care must be Factors in determining shipment pricing exercised to assign the correct class. (See below may include: The DIM weight is then matched against the for a more detailed overview of the National shipment’s package weight, and charges are Dimensional Weight. Dimensional weight (DIM Motor Freight Classification process.) assessed based on whichever number is higher. weight) pricing, also referred to as “volumetric Distance Traveled/Shipment Zones. The pricing,” refers to the process in which shipping Packaging Efficiency. Implementation of distance a package needs to travel is another costs are assessed based on a shipment’s size DIM pricing was largely driven by the surge in important consideration in determining pricing. and density rather than solely on its weight. eCommerce shipments. As Logistics Management In general, the farther the distance, the higher With DIM weight pricing in effect, shipping costs notes, carriers found themselves facing a the shipping cost. But rather than assess pricing are based on the higher of two measurements: surge in small-package volume, with a “typical” based on miles, most shipping companies use package size or package weight. package including as much as 40 percent air a “zone” system in which the U.S. is divided into and filler. With traditional weight-based pricing According to Logistics Management, dimensional geographic regions, usually based on zip codes, in effect, there was no incentive for a shipper to weight is calculated by multiplying length x with each region constituting a separate zone. exercise caution in the packing process. width x height and dividing that result by a The U.S. Postal Service, for example, maintains eight zones for the contiguous United States. number referred to as the “DIM factor.” Many Dimensional weight pricing rectifies this situation According to Endicia.com, “zones range from large carriers use 166 as their domestic DIM in two ways: (1) shippers are incentivized to ‘Zone 1,’ which is closest to you, to ‘Zone 8,’ divisor and 139 as their divisor for international avoid higher costs by implementing packing which is typically the furthest from your starting shipments. Many smaller carriers have also efficiencies, and (2) carriers are not “penalized” point. The farther away you ship your package, adopted these practices. The resulting number for shippers’ inattention to packaging details. is then rounded up, and that figure is called the the more zones it must cross and the higher “DIM weight. “ Freight Class. Every LTL shipment must be your delivery cost.” assigned a “freight classification” that is selected Zone designations generally are specific to from the 18 classes that make up the National

a certain type of service. Ground service, for for a shipper to understand the implications Negotiated Rates for LTL Shipping. While each example, would follow a different zone schedule of zone rates and be aware of options to carrier sets base rates for the different services it than next-day air service. manage costs. offers, it is possible for a shipper to negotiate for a lower price. Such negotiations can also extend Within a certain service category, some Lane Availability. FTL and LTL costs will also be to “discounted rates,” which can be awarded shippers will charge a flat rate, whereby all influenced by the availability of service to the based on a shipper’s historical relationship, shipments pay the same price regardless of their desired location. According to FreightCenter, shipment volume, or general goodwill with destination within that zone. A general rule of most carriers establish “lanes” or “routes,” which an established carrier. According to Cerasis, thumb, though, is the greater the number of they routinely service, rather than attempt negotiated discounts can help reduce LTL freight zone crossings, the greater the cost to ship. A to use their finite fleet of vehicles to “serve rates by as much as 18 to 25 percent. shipment of books traveling from Boston to Los everyone everywhere.” Depending on where Angeles, for example, will incur higher shipping a shipment needs to go, it can be difficult to Accessorial Charges. Accessorial charges charges than if that same shipment was moving secure required freight services. While service will also affect pricing for LTL shipments. from Boston to New York City. between major urban areas can usually be easily Accessorial charges refer to additional services procured, a shipper may face higher costs for performed by the carrier that go beyond typical Many shippers choose to “manage” their shipments to less-well-served areas since not as pickups and deliveries. These services may shipping costs by establishing multiple many lanes will be available. include liftgate services, inside deliveries, fulfillment centers and warehouses strategically remote-location pickups, oversized package located to minimize the number of zone Lead Time. Shipping costs will also be handling, waiting charges, storage fees, and crossings. Analysis by ShipBob found that by affected by the amount of advance notice excess fuel costs. locating fulfillment centers in San Francisco, a shipper provides. Dallas, and New York City, it is possible to reach Shipment Consolidation. Smaller shipments a significant portion of the United States without Type of Service Requested. A shipment in need can achieve significant savings when combined exceeding Zone 4. Shipping from a single of expedited or express service will naturally with other small shipments to form a single fulfillment center, on the other hand, would incur higher costs than a shipment traveling unit. This process of consolidation allows the mean the vast majority of the U.S. would fall into via a multiday ground service. Even though larger shipment to qualify for a reduced rate Zone 5 and above. the cost of expedited services may be higher, and can also help facilitate international border many shippers find the benefits of guaranteed clearances. However, while consolidation is As this example makes clear, using strategically deliveries and premium levels of customer integral to LTL shipping, not all providers offer located warehouses can have a dramatic effect service more than outweigh the additional cost. consolidation services, and among those that on reducing shipping costs. It’s important then do, there are broad variances. A shipper would

be well-served to spend time with a potential Commodities are grouped into one of 18 classes service provider to discuss its consolidation — from a low of class 50 to a high of class 500 capabilities and the impact consolidation will — based on an evaluation of four transportation have on its pricing strategy. characteristics: XX Handling — This refers to any special Understanding Freight Classification. LTL carriers are required to assign each shipment a processing requirements due to fragility, temperature needs, hazardous conditions, “freight classification” selected from the National Motor Freight Classification’s (NMFC) Index of or other properties that could affect a shipment. 18 different classes. The NMFC is published by the National Motor Freight Traffic Association, XX Density — Shipment density is determined which is a voluntary industry association that based on actual characteristics, including comprises LTL carriers. NMFC listings are weight, length, and height. Density is an regarded as “industry standards” for determining important consideration since it addresses shipping rates for various commodities. the space a shipment will occupy in relation to its weight.

XX Stowability — This refers to the ease or

difficulty with which a shipment can be

loaded with other freight. Items that are

extra heavy, oddly shaped, or hazardous will

be more difficult to stow on a trailer, which

may result in higher costs.

! XX Liability — This assesses the susceptibility The National Motor of a shipment to theft, damage, or causing damage to a nearby load. Freight Traffic Association oversees publication of Together these characteristics establish a the National Motor Freight shipment’s “transportability.” Classification Index.

Following is a chart prepared by Freight Management Logistics that provides an overview of current classes and is intended to offer guidance in determining the correct code for a comparable shipment:

Weight Range Class Name Cost Notes, Examples per Cubic Foot Class 50 — Clean Freight Lowest Cost Fits on standard shrink-wrapped 4x4 pallet, very durable Over 50 pounds Class 55 Bricks, cement, mortar, hardwood flooring 35–50 pounds Class 60 Car accessories and parts 30–35 pounds Class 65 Car accessories and parts, bottled beverages, books in boxes 22.5–30 pounds Class 70 Car accessories and parts, foot items, automobile engines 15–22.5 pounds Class 77.5 Tires, bathroom fixtures 13.5–15 pounds Class 85 Crated machinery, cast-iron stoves 12–13.5 pounds Class 92.5 Computers, monitors, refrigerators 10.5–12 pounds Class 100 Boat covers, car covers, canvas, wine cases, caskets 9–10.5 pounds Class 110 Cabinets, framed artwork, table saw 8–9 pounds Class 125 Small household appliances 7–8 pounds Class 150 Auto sheet-metal parts, bookcases 6–7 pounds Class 175 Clothing, couches, stuffed furniture 5–6 pounds Class 200 Auto sheet-metal parts, aircraft parts, aluminum table, packaged mattresses 4–5 pounds

Class 250 Bamboo furniture, mattress and box spring, plasma TV 3–4 pounds Class 300 Wood cabinets, tables, chairs, model boats 2–3 pounds Class 400 Deer antlers 1–2 pounds Class 55 — Low Density of High Value Bags of gold dust, ping pong balls Less than 1

Additional guidance offered byFreightRun advises that the NMFC’s 18 freight classifications, “at the end of the day,” serve only as a general guide. “The reality is that there are a range of factors that can influence which class your shipment eventually ends up in,” the analysis noted.

Clearly then the process of selecting the correct freight class can be arbitrary. This is why a shipper must exercise great care in making this determination.

Several resources are available to assist a shipper in making the correct freight class assignment, including:

XX Consult with a logistics provider

XX Contact the manufacturer of the item under consideration

XX Contact the National Motor Freight Traffic Association

An incorrect classification could result in a reclassification by the freight carrier. Once that happens, disputing the reclassification can be difficult, time-consuming, and costly.

Conclusion

Businesses that understand the basic “rules As a business does its due diligence, it will soon of the road” when it comes to shipping options find that most logistics providers use superlatives are generally well positioned to make smart to describe their capabilities. Words like “fastest,” decisions about their critical shipping needs. “most efficient,” and “cost effective” abound. An educated shipper will understand that But drill down a little bit, and a shipper will find sometimes an LTL solution is preferable to a such claims can be overstated. The trick is for parcel solution, while other times, the parcel a business to use its understanding of shipping solution will make better sense. basics to identify its best solution. When it comes to developing the “right” shipping solution, there But beyond understanding the core differences is no one-size-fits-all solution. To use an old between shipping categories and the key analogy, a shipper might have to kiss a few frogs factors in determining pricing, a shipper must along the way, but the right solution is out there. also realize broad differences among shipping companies. Not only do different freight, LTL, and parcel companies have different strengths and capabilities but so too do logistics companies.

Don’t assume, for example, that every logistics company has embraced technology and the innovations and service upgrades that are now possible or that “standard” service offered by one company is replicated throughout the industry. One logistics company, for example, offers direct line-haul service to the Canadian border, which allows shipments to arrive two to four days faster than its competitors. Such capability is not an industry standard but rather the result of one company’s innovative thinking and efficient use of assets.

Purolator. We deliver Canada.

Purolator is the best-kept secret among leading U.S. companies who need reliable, efficient, and cost-effective shipping to Canada. We deliver unsurpassed Canadian expertise because of our Canadian roots, U.S. reach, and exclusive focus on cross-border shipping. For more information:

Every day, Purolator delivers more than 1,000,000 packages. With the largest dedicated air fleet Purolator International and ground network, including hybrid vehicles, and more guaranteed delivery points in Canada 1.888.511.4811 than anyone else, we are part of the fifth-largest postal organization in the world. [email protected]

But size alone doesn’t make Purolator different. We also understand that the needs of no www.purolatorinternational.com two customers are the same. We can design the right mix of proprietary services that will http://blog.purolatorinternational.com make your shipments to Canada hassle-free at every point in the supply chain.

References

“A Guide to GMA Pallet Grades and Specifications,” “Parcel vs. LTL shipping: Understanding the key Prostack, March 15, 2018. differences,” FreightQuote, April 4, 2018.

Black, Thomas, and Haverstock, Eliza, “Why the Trucking Schmidt, Ally, “A Look at the Courier Service Industry in Shortage is Costing You,” Bloomberg News, August 1, 2018. the United States,” Market Realist, July 17, 2015.

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