Understanding Freight Class
Calculating Freight Density
How to get the best rates
Sending out your shipment
List of Freight Carriers
LTL Shipping Guide By Opportunity Buys Inc
When OBI started shipping orders in 2004 we had no idea
how to start shipping or where to get information. Today OBI is shipping out
many pallets per day and we know exactly what to do and how to get the best
rates. This guide is not company specific, we use 5 different freight carries at
any given time. We have found that in the long run is it better to work directly
with carriers then with freight brokers, we will get into that later.
LTL stands for Less-Than-Truckload. Usually the freight is
shipped on pallets. The rate you get is determined by the freight class, the
destination and the weight you are shipping.
The first problem you are going to run into is: What is freight class?
This is the most confusing part so bare with me.
Freight class is standardized classification system to
determine how much your freight should cost to ship based on a number of
factors. It is like a weighted system to compare apples and bricks. The freight
class of an item is determined by many factors such as: Type of Product, Value
of Product, Ease of Handling and Liability. The freight classes go from 50 to
500, 50 is cheapest, 500 is most expensive.
The NMFC (National Motor Freight Classification) system is
what is used to determine your items class. The best way to determine your
freight class is to call an LTL carrier. They are more than happy to help and
they don't charge you for the information. Once you describe your item they will
look it up and give you the NMFC number(s) and freight class. Ask them to fax or
email you the details for the NMFC number(s) they told you. These may come in
handy later on for your reference. Sometimes a given type of freight can be
classified into a general category like "Novelty Merchandise" or a very specific
category like "Framed Art." A shipment we send out may be "Framed Art," but it
has a high density so it may be cheaper to ship it as "Novelty Merchandise."
Here are the NMFC details for Novelty Merchandise -
056290. This is the number
we ship most of our goods under. It is based on density (pounds per cubic foot).
NMFC based on Shipment Density
Novelty Merchandise 056290-XX
Pounds per cubic foot
Less Than 1 01 - Class 400
Between 1 And 2 02 - Class 300
Between 2 And 4 03 - Class 250
Between 4 And 6 04 - Class 150
Between 6 And 8 05 - Class 125
Between 8 And 10 06 - Class 100
Between 10 And 12 07 - Class 92.5
Between 12 And 15 08 - Class 85
Over 15 09 - Class 70
You may be wondering: Why does the density matter?
The answer is: The higher the density, the less space the
shipment takes up.
Look at the two following shipment detail
||Density per cubic foot
||Space used for shipment
||2000 / 5 = 400 cubic feet
||2000 / 15 = 133 cubic feet
You can see both shipments weigh the same but the first
shipment is going to take up over twice the space as the second shipment. The
freight class gives the carrier this information so they can give you a correct
quote on the shipment.
Some NMFC numbers rely on value of the item or are very
straightforward so you don't need to do anymore work to determine to get a
shipping quote from a company.
But if you have and NMFC number and you need to calculate
density, how do you do it? It is pretty simple. Measure the Height, Width and
Depth of each pallet you are shipping in inches (include the wooden pallet in
You can use this tool from R+L Carriers
Do the following math:
|Height x Width
x Depth = Cubic Inches
40x48x80 = 153600 Pallet 2: 40x48x65 = 124800
|Cubic inches /
1728 = Cubic Feet
153600/1728 = 88.9 Pallet 2: 124800/1728 = 72.2
|Add up the
cubic feet for all the pallets
+ 72.2 = 161 cubic feet
|Weight / Cubic
Feet = Density
||2000 lbs / 161
cubic feet = 12.4 lbs/cubic foot
to get the best rates:
If you call a freight company for a quote have the
following information ready: Number of Pallets, Destination Zip Code, Weight,
Freight Class and any shipment details such as Commercial or Residential, or if
a lift gate is needed.
If it is your first time calling they will act very
generous and say "Today I will give you a 40% discount." In truth this is
standard practice and they always give discounts. Generally good discounts are
60%-70% or more. This usually requires an account with the company and speaking
with the local sales rep.
Be careful when getting shipments sent to you freight
collect. If you have an account with that carrier, your account will be used to
calculate the shipping. Even though your supplier may give you a quote it could
be made invalid by your account with the freight carrier.
There are several points to discuss with the rep to
get you a better rate.
- Discount - The percentage off of their "standard" rate.
Usually 60%-70% is good depending on the carrier although sometimes they are as
high as 80%
- Residential Charges - Some carriers are very fair and
others will kill you with this charge, you can negotiate with the rep to get it
into the $20 to $45 range pretty easily. This includes an appointment and
usually delays delivery by 1 day. If the recipient is in a hurry have them call
the local terminal to initiate an appointment and you can save the extra day.
- Lift gate - This one is harder because some carriers
don't have lift gates on many of their trucks. R+L carriers has a lift gate on
all their trucks so for any shipment that requires a lift gate we usually use
them because a lift gate charge alone can be $35 to $95.
- Notification - Commonly this is free or you can get it down to $5 to
$10. This is just the carrier calling the customer to tell them their shipment
is going out today.
- Appointment - This is less commonly free, but you can
get it down to $10 to $20. This is calling and setting up a delivery appointment
with the recipient. An appointment is always included in a residential charge,
so don't let them charge you for both. This can delay delivery for a day.
- Inside Delivery - This is the worst charge and usually
the most expensive $35 to $85. If your recipient is in a mall and they tell the
driver has to use a pallet jack to take it to their shop then you just paid an
Inside Delivery charge. Sometimes on a residential charge the recipient will sit
there while the driver put the freight in their garage. And again you paid and
Inside Delivery charge.
- FAK - This mean Frieght of All Kinds and it can be
very important. This is much harder to get unless you ship with a carrier
This lets you ship all of your merchandise at a specific (usually lower) freight
class than the freight actually is.
An FAK 70 to 125 lets you ship any freight that would normally fall between 70
to 125 as class 70. This can be the biggest overall discount you can get.
An FAK is the reason I stated that you should ship with the carrier and not a
broker. This is not available for broker shipments.
-To get an FAK - Ship with one carrier exclusively for a while, 3 months or
more. Then pound the rep over an FAK stating that you will take your business
elsewhere. You don't need a great FAK to start. Once you get one, you can
contact other carriers and show them that you have one. They will meet or beat
the FAK because they see it as meaning you are a true shipping customer that
they want. You will also get better discounts to start with.
Sending Out Your Shipment
The BOL or Bill of Lading is the document you use to send
your shipment. Below is a sample Bill Of Lading you can use if you like. Hand
written BOLs get charged incorrectly much more often than typed BOLs.
You should also put pallet labels on your shipment as well as instructions for
the recipient. You can see templates below. DO NOT trust the freight carrier's
little stickers they put on the pallet to get your shipment there. The stickers
fall off and at that point your pallet is lost if it is not properly labeled.
Forms - You can fill out the forms online and then
Sample Bill of Lading
Sample Pallet Notice
Sample Pallet Labels
After your BOL is filled out and your pallets are wrapped
and tagged, the last step is to call the carrier for a pickup. Usually 4 hours
is big enough window to get your shipment out unless you live in a rural area or
hard to get to area.
List of Freight
This a list of freight carriers we commonly use. Theses
are good, legitimate carriers that we have worked with for years. There is no
particular order to this list.