LTL FRIEGHT GUIDE
Topics
Understanding Freight Class
Calculating Freight Density
How to get the best rates
Sending out your shipment
Forms
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.

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?
 

Freight class is a standardized classification system used to determine how much your freight should cost to ship based on a number of factors. 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              Freight Class

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 details

Weight        Density per cubic foot Space used for shipment Pallets Required
2000 lbs 5 lbs 2000 / 5 = 400 cubic feet 5
2000 lbs 15 lbs 2000 / 15 = 133 cubic feet 2

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.

Calculating Freight Density

If you have a 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're measurements).

You can use this tool from R+L Carriers http://www.rlcarriers.com/density.asp
OR
Do the following math:

Height x Width x Depth = Cubic Inches Pallet 1: 40x48x80 = 153600   Pallet 2: 40x48x65 = 124800
Cubic inches / 1728 = Cubic Feet Pallet 1: 153600/1728 = 88.9  Pallet 2: 124800/1728 = 72.2
Add up the cubic feet for all the pallets Shipment: 88.9 + 72.2 = 161 cubic feet
Weight / Cubic Feet = Density 2000 lbs / 161 cubic feet = 12.4 lbs/cubic foot

 

How 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, 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 quite often.
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 print them
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 Carriers

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.

Old Dominion       http://www.odfl.com/
Dayton Freight http://www.daytonfreight.com/default.aspx
R+L Carriers http://www.rlcarriers.com/
Estes http://www.estes-express.com/
Roadway http://www.roadway.com
UPS Freight https://www.ltlservices.com/apps/general/index.aspx
FedEx Freight https://www.fedexfreight.fedex.com/myacct.jsp
SAIA http://www.saia.com/
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