Freight classes are designed to standardize different types of cargo across the industry. The NMFTA (National Motor Freight Transportation Association) has developed guidelines to help define specific categories of freight. The parameters specified by the NMFTA are now considered industry standards and are used by all who operate worldwide.
In a nutshell: Freight class is when a cargo has certain characteristics that determine the cost of shipping them. An extremely durable and easy-to-handle material would have a shipping grade different from glass, which is easily damaged in transit.
There are 18 categories in NMFC which can be assigned to a certain kind of goods. Each of these classes has a wide range of characteristics, covering a wide range of different goods, usually using a distribution equation (we’ll discuss this more later). In addition, a corresponding category is usually provided for goods shipped as less than truckload (LTL) freight. In the end, the category assigned to the shipment will determine the tariff, which ultimately consolidates the price of the entire shipment.
By using freight classes, carriers, shippers, freight brokers, freight forwarders, 3PLs and all intermediaries are able to measure shipping costs. From the most expensive class 500 to the cheapest class 50, these classes provide a standardized reference point for shipping costs.
What is freight density?
The density of an LTL shipment is calculated using two metrics: its overall dimensions (height, length, width) and weight. Simply put, the amount of LTL trailer space a cargo uses is related to its weight and equals its cargo density.
Step-by-step instructions for calculating freight density:
Determine the length, width and height of your shipment (including packaging) in inches.
Multiply these three metrics together to calculate shipping dimensions in cubic inches.
To convert to cubic feet, divide it by 1,728 (cubic inches in cubic feet).
Then, divide your cargo weight (in pounds) by the total cubic feet.
This will give you the density of your cargo.
L x W x H = inches 3 # inches 3 / 1,728 = ft 3 lbs/ft 3 = density
How 3PL uses freight classes to reduce shipping costs:
A smart third-party logistics (3PL) may be able to determine the classification of shipments to benefit your bottom line. This may include:
1. “”Bumpy”” Density
Strategic change in packaging
Specify a lower “”publish value””
2. Bump density
“”Bumping”” is the practice of artificially declaring a higher weight on the original bill of lading to qualify for a lower freight classification. There are certain regulations that need to be followed to do so, and the cargo can only be bumped one level.
3. Packaging
Working with a 3PL is beneficial for manufacturers, shippers, and carriers alike who care deeply about you knowing exactly what you’re shipping. Knowing the exact item can inform packaging decisions, which can help influence shipment classification.
In some cases, smart packaging can mean lower, and therefore more cost-effective, freight classes. Such changes may even be more suitable/protecting your cargo, thus keeping you safe from potential damage and thus reducing costs.
Here are seven useful questions to ask when considering cargo packaging:
Is it as dense and compact as possible?
Is it durable?
Can it be handled easily?
Is everything fully protected?
Is this packaging good for storage?
Is this the optimal pallet size for this shipment?
Are these the best types/strengths for each product group?
4. Low “”publish value””
“”Released Value”” may provide the most economical but minimal protection, as it usually charges no additional fees, but limits liability to a value less than the actual value of the goods.
It is advisable to consult an experienced customs professional on your team as this will involve issuing tariffs with published rate provisions and negotiating with your shipper for a formal written agreement. Then, a bill of lading must be drafted to reflect such an agreement.
Deciphering the cargo class
Now that you know what freight classes mean and understand the different classifications, you might be wondering: do I calculate it myself? The answer here is yes, because it is up to the shipper to assign a certain freight classification to its cargo. Having said that, this is why it is critical that shippers understand all freight classifications, how NMFTA calculates them and how they apply to the type of cargo they want to transport.
There is nothing worse than assigning a specific classification to your shipment when in reality it is different. In one case, the shipper will have to spend more money once the invoice is corrected. Another situation is when the shipper pays too much for shipping and it is very difficult to correct once paid (the shipper can use a certain grade for a long time, only to find out that he has made a mistake until after countless shipments go out).
