LTL Freight Classifications Are Frustrating - Loadsmart Can Help!

Identifying the proper freight class for a less-than-truckload (LTL) shipment is essential to determine shipping costs, but it also can be a common source of frustration.

This process requires you to understand a complex set of rules and regulations. Any misclassification can potentially result in unwanted additional costs.

Due to recent volume surges and overall demand, along with a decrease in capacity, carriers have become more sensitive to the freight they handle. In the face of economic uncertainty and the threat of a recession, it has never been more crucial to monitor your expenses and understand the importance of accurate freight classification to minimize unplanned back-end charges.

In this post, we'll explore the challenges of LTL freight classification and how Loadsmart’s freight management software, ShipperGuide, makes it easier for you to get your shipments where they need to go.

What is LTL shipping?

LTL shipping enables you to send goods in a shared truck instead of hiring a dedicated truck for your shipment. LTL is a cost-effective solution when you have limited resources to transport your shipments.

The advantages of utilizing LTL shipping are pretty obvious, but the rates and service agreements are clear as mud -- full of confusing rule applications, rating calculations, and more options than you can count. You’ll need to find the best shipping options every time you move a load to stop leaving money on the table.

Sometimes, less can be more when you book shipments. LTL shipping is a crucial component of supply chain management for businesses of all sizes. But, with LTL comes unique challenges, especially when trying to navigate the world of freight classification.

What are LTL freight classifications?

LTL freight classification is a key component of shipping, and it is important to understand the process to avoid any added and unexpected costs. It involves determining the proper classification code for a shipment, which is used to calculate the shipping cost.

The classification code assigned to a shipment is based on several factors, which include the weight, density, value, and stowability of the cargo. The National Motor Freight Traffic Association (NMFTA)  has established the Freight classification guidelines, which range from Class 50 to Class 500. 

Each code has a corresponding pricing rate, and the code that is assigned to a shipment will determine the final price you'll pay for LTL. The freight classification process helps standardize shipment pricing, making it easier to compare quotes from different carriers and make informed decisions about shipping needs.

Generally, dense items such as steel and machinery have low freight classifications, between 50 and 85. As a result, they tend to have a lower shipping rate. On the other hand, fragile or bulky items typically fall into the higher freight classes, from 125 to 500, and therefore, cost more to ship.

At this time there are two different frameworks in reference to freight classification:

1. National Motor Freight Classification (NMFC) -- this is currently the most commonly used form of obtaining freight classifications, and is calculated using the approach explained above. NMFC is widely perceived as a fair method of shipping cost determination.
   

2. Dimensional rating -- is calculated considering the dimensions (length, width, height, and weight) of a shipment, with pricing expected to increase in the coming years. The dimensional rating framework has not been fully embraced by the business community with many citing it as more expensive and unfair for businesses and shippers.

In many ways, the trust in LTL shipping between shippers and carriers is ancient history. Now, there are many ways that discrepancies in classification are detected by the use of high-tech equipment such as dimensioners and 3D volume measuring devices. This further enforces the importance of ensuring your freight is properly classified every single time.

You expect the price that you’re quoted to be accurate. However, if you happen to misclassify the freight, it can result in additional costs that weren't originally planned for.

Here’s how Loadsmart can help:

We're dedicated to helping you navigate the complex world of LTL shipping. With our expertise in freight classification and our commitment to providing you with the tools you need to succeed -  whether you’re looking to move small LTL shipments or a high volume, we’re here to help you get it done with ease and efficiency. Our software paired with our LTL freight experts will ensure you’ll receive an accurate quote every time. 

If you are a shipper facing the challenges of LTL shipping and freight classification, we invite you to learn more about how you can streamline your LTL shipping operations to save time and money. Talk to a dedicated representative about your shipping process today!